This put up is a part of a collection sponsored by AgentSync.
The Southwest Airlines disaster 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The debacle helped begin a bigger dialog on a subject we’ve been speaking about for fairly a while now: the issue with outdated expertise. As we start the brand new yr, we anticipate professionals throughout all industries taking a better take a look at the cracks of their technological infrastructure and legacy programs.
Legacy expertise and the insurance coverage business typically go hand in hand
The insurance coverage business is not any stranger to outdated expertise. 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 have been mainly pressured to replace their processes and softwares with a purpose 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. But, numerous carriers and companies are nonetheless counting on the previous approach 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 programs. 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. However, if Southwest’s breakdown taught us something, it’s that no excuse is price risking the injury that outdated expertise could cause to your group, staff, and prospects.
So, with out additional ado, listed here 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(as that’s our experience), however many of those issues apply to companies in any business that also depend on outdated expertise.
1. Legacy expertise is cost-heavy
One of the extra frequent roadblocks we hear from insurance coverage specialists who’re nonetheless operating their enterprise on outdated programs is {that a} new resolution is simply not within the finances. While 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 value of sustaining legacy programs. Choosing to maintain doing issues the best way you’ve at all times completed them as a result of it appears simpler (or cheaper) now is named technical debt. And like most money owed, they ultimately come due.
The older programs get, the extra they value to keep up. Plus, legacy expertise could possibly 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 be capable to supply the options or ease of use that staff, producers, shoppers, and downstream distribution channel companions are on the lookout for. If these prospects, staff, and companions aren’t glad with their experiences, they could take their enterprise (and their expertise) elsewhere, in the hunt for a extra fashionable expertise.
2. Legacy expertise can hurt your fame
You work exhausting to keep up 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 expertise managed to pull Southwest Airlines’ fame via the mud in a matter of days.
When it involves insurance coverage, there doesn’t essentially have to be a large breakdown or error together with your legacy system to negatively influence how present and potential prospects and staff view your organization. It will also be the day-in-day-out tedium of outdated expertise that lastly will get to individuals. If you proceed utilizing legacy expertise, staff, prospects, and shoppers could view your organization as being behind the instances. And in case your technological infrastructure appears to be like prefer it’s caught previously you’ll have a more durable time convincing anybody of your future spot available in the market.
3. Legacy expertise might get you in regulatory bother
A serious disadvantage of legacy expertise is its lack of ability to combine with newer software program. Insurance professionals want programs that may talk with one another and paint a whole image of their information with a purpose to make knowledgeable enterprise choices. The complexity of the insurance coverage business’s state-by-state regulation system means it’s essential for all programs 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 just’d want to make sure the identical degree of compliance at this time.
4. Legacy expertise can inhibit progress at your company, provider, or MGA/MGU
Legacy programs are not often scalable. Modern issues want fashionable options and legacy expertise is commonly unequipped to deal with present wants. Because of this, legacy programs generally is a main barrier to a company’s progress and innovation.
The longer an company waits to replace its legacy programs, the more durable will probably be to deal with present market wants and acquire new market share. If you’re not able to fully overhaul your group’s legacy programs, there are different choices that may make it easier to dip your foot within the pool of innovation.
5. Legacy expertise fuels inefficient workflows
Legacy programs can block your group from realizing its full potential. With outdated expertise, it’s doubtless your employees is spending an excessive amount of time on handbook, repetitive, and non-revenue-generating duties. Not solely is that this a waste of expertise, but it surely additionally will increase the possibility of human error and non-compliance.
Without up to date insurtech, processes like producer onboarding and compliance administration eat up much more time and sources. Remember earlier once we talked about that legacy programs don’t normally combine simply with different expertise? This lack of communication can create information and workflow silos that block data from flowing between groups and finally decelerate processes.
6. Legacy expertise might make you extra susceptible to cyber assaults
Hackers are always discovering new methods to sneak previous a company’s cyber safety measures and entry its safe information. As software program ages, it might not have the defenses wanted to guard towards newer cyber threats. Cyber safety is an enormous concern for insurance coverage companies and carriers which frequently retailer huge quantities of delicate consumer data. Outdated software program might make that information extra susceptible to an information breach, bringing you proper again to earlier factors about reputational hurt and exhausting greenback prices.
7. Legacy expertise might 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 wish to work. And should you suppose the possibility to work with software program that predates their grandmother is an effective promoting level then oh boy do we’ve got information for you.
Today’s job-seekers are on the lookout for fashionable firms which can be utilizing the newest expertise to enhance each the client and worker expertise. Offering producers a high-tech expertise with much less time spent on handbook, repetitive, time-consuming duties might assist as you proceed to compete for expertise.
The time to modernize your insurtech is now!
The finest by date in your insurtech has come and gone and it’s time to rethink the “if it ain’t broke, don’t fix it” mindset you might have beforehand held relating to your legacy programs. In actuality, it’s a lot better to repair the issue earlier than a serious malfunction (once more, you simply have to have a look at Southwest Airlines for proof). Clearly, outdated expertise can do much more hurt than good relating to your company, provider, or MGA.
Don’t be like Southwest and wait till the injury is already completed. The time has come to throw out your legacy programs together with the issues they’re inflicting your insurance coverage enterprise. If you’re able to declare your independence from outdated tech and processes see how AgentSync might help you attain your full potential.