This publish is a part of a collection sponsored by AgentSync.
The Southwest Airways catastrophe that rounded out 2022 could have been a nightmare for everybody concerned, however there was one optimistic that got here out of it. The debacle helped begin a bigger dialog on a subject we’ve been speaking about for fairly a while now: the issue with outdated know-how. As we start the brand new yr, we anticipate professionals throughout all industries taking a better have a look at the cracks of their technological infrastructure and legacy techniques.
Legacy know-how and the insurance coverage business typically go hand in hand
The insurance coverage business isn’t any stranger to outdated know-how. As a legacy business, legacy tech is par for the course. It wasn’t till the COVID-19 pandemic started inflicting enterprise shutdowns that many insurers had been principally compelled to replace their processes and softwares with a view to proceed working below new security tips.
In some ways, the COVID-19 pandemic was the catalyst for the insurance coverage business’s digital revolution. However, numerous carriers and businesses are nonetheless counting on the previous means of doing issues. Why is that?
The reply isn’t easy. Some could also be fearful about the price whereas others are extra involved with the problem of changing legacy techniques. Some are simply afraid the change might be an excessive amount of for workers and that it’ll trigger extra enterprise disruption than it’s price. Nonetheless, if Southwest’s breakdown taught us something, it’s that no excuse is price risking the injury that outdated know-how may cause to your group, workers, and clients.
So, with out additional ado, listed below are seven methods your legacy system could also be inflicting your insurance coverage enterprise extra hurt than good.
**We’ll be exploring these issues from an insurance coverage perspective (as that’s our experience), however many of those issues apply to companies in any business that also depend on outdated know-how.
1. Legacy know-how is cost-heavy
One of many extra frequent roadblocks we hear from insurance coverage consultants who’re nonetheless operating their enterprise on outdated techniques is {that a} new resolution is simply not within the funds. Whereas it’s true that the upfront prices of including extra fashionable instruments to your tech stack could also be substantial, they’re nothing in comparison with the cost of maintaining legacy systems. Selecting to maintain doing issues the way in which you’ve at all times accomplished them as a result of it appears simpler (or cheaper) now is called technical debt. And like most money owed, they ultimately come due.
The older techniques get, the extra they value to take care of. Plus, legacy know-how may very well be consuming away at an organizations’ backside line in different, much less apparent methods. For instance, an outdated company administration system (AMS) or buyer relationship administration system (CRM) won’t have the ability to provide the options or ease of use that workers, producers, shoppers, and downstream distribution channel companions are in search of. If these clients, workers, and companions aren’t happy with their experiences, they might take their enterprise (and their expertise) elsewhere, seeking a extra fashionable expertise.
2. Legacy know-how can hurt your fame
You’re employed onerous to take care of a optimistic fame on your insurance coverage enterprise. A poor fame could lead on your shoppers straight into the fingers of your opponents and negatively influence your backside line. We noticed first hand how outdated know-how managed to tug Southwest Airways’ reputation by way of the mud in a matter of days.
Relating to insurance coverage, there doesn’t essentially have to be a large breakdown or error along with your legacy system to negatively influence how present and potential clients and workers view your organization. It will also be the day-in-day-out tedium of outdated know-how that lastly will get to individuals. If you happen to proceed utilizing legacy know-how, workers, prospects, and shoppers could view your organization as being behind the occasions. And in case your technological infrastructure seems to be prefer it’s caught previously you’ll have a more durable time convincing anybody of your future spot available in the market.
3. Legacy know-how may get you in regulatory hassle
A significant disadvantage of legacy know-how is its lack of ability to combine with newer software program. Insurance coverage professionals want techniques that may talk with one another and paint a whole image of their knowledge with a view to make knowledgeable enterprise choices. The complexity of the insurance coverage business’s state-by-state regulation system means it’s essential for all techniques to be built-in and up to date in actual time to keep away from compliance violations.
Updating to an automatic built-in compliance resolution (like AgentSync) can create important compliance administration value financial savings and guarantee steady producer and company compliance – with out the handbook effort that you simply’d want to make sure the identical stage of compliance at this time.
4. Legacy know-how can inhibit progress at your company, provider, or MGA/MGU
Legacy techniques are hardly ever scalable. Trendy issues want fashionable options and legacy know-how is commonly unequipped to deal with present wants. Due to this, legacy techniques generally is a main barrier to a corporation’s progress and innovation.
The longer an company waits to replace its legacy techniques, the more durable it is going to be to deal with present market wants and acquire new market share. If you happen to’re not able to fully overhaul your group’s legacy techniques, there are different choices that may make it easier to dip your foot within the pool of innovation.
5. Legacy know-how fuels inefficient workflows
Legacy techniques can block your group from realizing its full potential. With outdated know-how, it’s probably your workers is spending an excessive amount of time on handbook, repetitive, and non-revenue-generating duties. Not solely is that this a waste of expertise, nevertheless it additionally will increase the possibility of human error and non-compliance.
With out up to date insurtech, processes like producer onboarding and compliance administration eat up much more time and assets. Bear in mind earlier once we talked about that legacy techniques don’t often combine simply with different know-how? This lack of communication can create data and workflow silos that block info from flowing between groups and finally decelerate processes.
6. Legacy know-how may make you extra weak to cyber assaults
Hackers are continually discovering new methods to sneak previous a corporation’s cyber safety measures and entry its safe knowledge. As software program ages, it could not have the defenses wanted to guard towards newer cyber threats. Cyber safety is an enormous concern for insurance coverage businesses and carriers which frequently retailer huge quantities of delicate consumer info. Outdated software program may make that knowledge extra weak to a knowledge breach, bringing you proper again to earlier factors about reputational hurt and onerous greenback prices.
7. Legacy know-how may negatively influence hiring efforts
We’ve stated it earlier than and we’ll say it once more – the insurance coverage business is within the midst of a hiring disaster. Mass retirement and a shrinking expertise pool means high-quality candidates have extra energy to decide on the place they’d prefer to work. And for those who suppose the possibility to work with software program that predates their grandmother is an effective promoting level then oh boy do now we have information for you.
Right this moment’s job-seekers are in search of fashionable corporations which might be utilizing the most recent know-how to enhance each the client and worker expertise. Providing producers a high-tech expertise with much less time spent on handbook, repetitive, time-consuming duties may assist as you proceed to compete for expertise.
The time to modernize your insurtech is now!
The very best by date in your insurtech has come and gone and it’s time to rethink the “if it ain’t broke, don’t repair it” mindset you’ll have beforehand held relating to your legacy techniques. In actuality, it’s significantly better to repair the issue earlier than a significant malfunction (once more, you simply have to have a look at Southwest Airways for proof). Clearly, outdated know-how can do much more hurt than good on the subject of your company, provider, or MGA.
Don’t be like Southwest and wait till the injury is already accomplished. The time has come to throw out your legacy techniques together with the issues they’re inflicting your insurance coverage enterprise. If you happen to’re able to declare your independence from outdated tech and processes see how AgentSync can assist you attain your full potential.
