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January 09 2014 | Karen Furtado

Without a doubt, I see 2014 as the year when there is real evidence that investments in core are delivering more. There is no debate about the fact that modern policy, billing, and claims systems provide the foundation that is needed to optimize and innovate. In 2014, we’ll see optimized systems extending capabilities well beyond the duplication or replacement of the function of older legacy systems – empowering insurers with flexibility and new efficiency levels, giving them the ability to leverage next-gen technologies. Leading insurers will be using the power of modern core systems and enhanced business processes to jump start and fuel transformation for the entire enterprise.

SMA research indicates that the time has come. For the past 5 years, investments in core systems have hit records highs. Insurers are clear in their understanding that in order to optimize their business, a modernized foundation is absolutely critical. One third of insurance companies have already modernized their platforms and another third are now in the process of modernization or making plans to start.

More than ever before, there is a commitment to remain current. Advances in solutions and architectures have paved the way for an orchestrated approach to modernization tied to strategic initiatives – aligning people, process, and technology along the way. It is this organized and orchestrated approach that will deliver visible benefits this year. The stage is being set for optimizing every aspect of the business and establishing an effective base for real transformation and innovation.

Insurers will fully embrace the transformation power of core in 2014. Those that are well along the journey to modernization will achieve new milestones in product development, underwriting, claims, and customer service excellence – setting new bars for their competitors. Those insurers that are in the middle of the journey will sense a pressure to step up their focus and efforts. The urgency will become unmistakable, especially for those who have not yet embarked on the journey. We’ll begin to see shifts in share, the impact on profit margins, and an amplification of loss cost differentials. 

Core does mean more in 2014. It is going to be an interesting year for watching the progress that is being made, as well the solution choices and successes. Hang on for the ride – we’re in the fast lane now. 

Please contact me for any additional information about SMA’s research, findings, and insights in the core systems space. I can be reached at kfurtado@strategymeetsaction.com or 978.239.2741.     

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To learn more, please contact:
Karen Furtado
Strategy Meets Action, a ReSource Pro company