I know many of you have been in insurance for quite some time. And it might really sound like an amazing statement to say: “Core systems will take a back seat to digital projects.” The other blogs in our “Myth or Reality” series have provided a lot of context and information about the many different initiatives and priorities that are critical for insurance companies to truly transform in this day and age. As we saw happen back in early March, there was a real pivot. And there was a pause to reassess what the priorities truly were. How would core systems need to interact? How would we keep pursuing core systems – either as replacements, enhancements, or roles, etc.? In this digital age, we feel tugs and pulls from the many different priorities that we have. Are we trying to cut back some of our costs? Are we really focused on all of the digital engagement initiatives that we have underway? And where does core sit in all of this? Well, I would suggest that core taking a backseat is a myth: Core systems are not necessarily the drivers of digital projects, but they are the enablers. They are the core – the hub of many of the interactions with data from both internal resources and external resources. The facilitation of transactions connected via APIs are now the critical enablers for digital engagement.
When we look to our internal operations, how effective are our resources, our underwriters, our billing staff, or our claim staff? Is the core system enabling them to move forward with their tasks in the most efficient and effective way? How open and interactive is your core system with bot technologies or RPAs? Moving forward, we must enable the balance between the digital workforce and the human workforce to be the most efficient operation that it can be.
As we look at this through the external lens, there is a plethora of different technologies and initiatives out there focused on external digital projects. We now have digital platforms. We have new UI initiatives. We have a whole new way of looking at our interactions with customers and agents. How does your core system help enable the transactions? Is it open? Does it have access to the APIs? Is it efficient? Can it perform? Can it live in the new world? We know empirically from our research this past year that core, because of the type of expense it is and because of its criticality to organizations, continues to push forward as one of the strong and key initiatives. Whether you're sourcing a new system, in initial deployment, or in rollout, remember that core initiatives do not take place in a short time frame. They are significant investments. We are balancing a new world of digitally engaged platforms with the enterprise core system needs that we have today. There is a fit and purpose for every type of solution out there. Some are meant to expedite new product innovation, and others are meant to handle the thrust and bulk of transactions and the volume of significant blocks of business. The important thing is to make sure your core system is working cohesively within your digital structure and enabling you to move forward with the digital projects that you have underway.
SMA Call to Action:
So, to counteract the myth that core systems will take a backseat to digital projects, my call to action is to really make sure you’re using a core system that has and can expose their capabilities via APIs – because the core system is going to have to live within the new ecosystems in and of itself. It is not the entire ecosystem, and it is not the only solution that you're going to have in play. This digital landscape requires much more from core systems from an interaction standpoint. Core systems must be able to interoperate with other technologies and enable interactions, and they must be as open as they possibly can be. We have to open up these systems to make them much more collaborative, available, and accessible so we can capitalize on the gains made with cloud deployments which will enable improved scalability and versatility.
For more information, watch our 30-minute On-demand Webinar, Myth or Reality: Strategies for Insurers in 2021.
