Innovating on Core Insurance Platforms in the Midst of a Pandemic

With a modern core platform, insurers can distribute current lines of business online and create new digital-first products that allow their customers to self-serve through a mobile device.

(Image credit: StartupStockPhotos.)

When it comes to digital transformation, industries like banking and financial services embraced digital technology years ago to drive efficiencies and fundamentally change how they delivered value to their customers. While there’s been an increase in the adoption of modern technology (true cloud, APIs, microservices) in the insurance industry, COVID-19 and resulting stay-at-home orders have accelerated the need for insurers to leverage technology that enables them to continue operating remotely without compromising innovation. As a result of the current pandemic, digital transformation is no longer a nice-to-have, but a must-have to better serve customers, drive automation, and improve efficiencies.

A dynamic shift in purchasing habits 

Today’s consumers are living a digital lifestyle—grocery shopping, banking, and seeing their friends and family—and they expect nearly every interaction to be a seamless online experience. Engaging with an insurance company should not be the exception, especially as the global pandemic and lockdown requirements have forced consumers to purchase insurance without leaving their homes. To deliver that same digital experience customers are coming to expect, insurers need to adopt modern cloud-native, API-driven core technology. A next-generation technology platform empowers them to continually improve their current offerings or develop new products to maintain business as usual and reduce customer churn.

With a modern core platform, insurers can distribute current lines of business online and create new digital-first products that allow their customers to self-serve through a mobile device. Such core technology must be agnostic to business lines, geography, and distribution channel, enabling insurers to provide their customers with products that meet their needs regardless of where they live or how they choose to purchase it.

The importance of automation

The global pandemic has caused business disruptions for many insurers as stay-at-home orders have limited workers from returning to their offices and call centers from functioning at full capacity. However, this is a crucial time for policyholders to believe they can count on their insurance companies. Automating insurance operations such as claims payouts and policy changes can free up agents from routine tasks so that they can focus on delivering more personalized customer service when and where it matters most.

It’s much harder to achieve automation and orchestration with a legacy core system, but it’s simple with a modern, cloud-native, API-driven platform. For example, when demand is spiking, why should insurers buy and maintain additional servers themselves? This requires teams of people to install, configure, manage, and service them. Cloud-native platforms, such as Salesforce, Slack, and Zendesk can effortlessly handle demand spikes by automatically scaling computing resources to meet demand.

Stop buying pitch decks, start buying proof

At a time when there’s an even greater scrutiny on budgets and return on investment, pitch decks and RFPs are a time-consuming and ineffective way to assess and purchase a core system. After evaluating a platform on paper, do insurers really know if it will work for them? When deciding on core technology, customers should insist on evaluating the platform early in the process and ask for an evaluation license and documentation that they can use on their own—remotely. Then, after getting access to the platform, engineers have an opportunity to build a proof of concept that is functional, integrates new technologies, and can grow into a live deployment.

Removing implementation barriers

The insurance domain is complex. However, the era of implementation war rooms with 12 professionals gathered together configuring complicated legacy systems on servers in the basement has passed in the time of social distancing. Today’s engineer says, “Give me the license, give me the documentation, and leave me alone.” For example, getting started with other popular platforms such as Stripe and Twilio only requires a login and documentation. An insurance core system should function in the same way especially in these times of physical separation. This can be achieved when a core platform is natively architected in the cloud and is radically open with well-documented APIs. Both elements remove implementation barriers as insurers no longer have to maintain physical servers, and insurers and their implementation partners can easily configure and integrate insurance products remotely.

Looking Ahead

COVID-19 has emphasized the insurance industry’s need to adopt innovative technology in order to meet evolving customer needs and, in today’s world, enable business continuity. There is a great challenge to meet the demands of this new world, but an innovation strategy set in place now can have a disproportionate impact on future success.

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Matt Hamilton // Matt Hamilton is Socotra’s Director of Product and is responsible for conceptualizing, designing, and implementing the next wave of product capabilities for Socotra’s technology platform. Hamilton joined  Socotra from Guidewire, where he spent ten years building and leading the company’s product teams, and has experience across the insurance policy lifecycle including underwriting, policy management, claims, billing, and analytics. Hamilton was a submarine officer in the U.S. Navy and has a B.A. in computer science from the University of California, San Diego and an M.B.A. from Stanford University.

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