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This put up is a part of a collection sponsored by AgentSync.
The Southwest Airways disaster that rounded out 2022 might have been a nightmare for everybody concerned, however there was one constructive 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The debacle helped begin a bigger dialog on a subject we’ve been speaking about for fairly a while now: the issue with outdated expertise.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 12 months, we anticipate professionals throughout all industries taking a more in-depth have a look at the cracks of their technological infrastructure and legacy programs.
Legacy expertise and the insurance coverage trade typically go hand in hand
The insurance coverage trade isn’t any stranger to outdated expertise. As a legacy trade, legacy tech is par for the course. It wasn’t till the COVID-19 pandemic started inflicting enterprise shutdowns that many insurers had been mainly compelled to replace their processes and softwares with the intention to proceed working underneath new security pointers.
In some ways, the COVID-19 pandemic was the catalyst for the insurance coverage trade’s digital revolution. However, numerous carriers and companies are nonetheless counting on the previous approach of doing issues. Why is that?
The reply isn’t simple. Some could also be frightened about the fee whereas others are extra involved with the problem of changing legacy programs. Some are simply afraid the change can be an excessive amount of for workers and that it’ll trigger extra enterprise disruption than it’s value. Nonetheless, if Southwest’s breakdown taught us something, it’s that no excuse is value risking the harm that outdated expertise could cause to your group, staff, and clients.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(as that’s our experience), however many of those issues apply to companies in any trade that also depend on outdated expertise.
1. Legacy expertise is cost-heavy
One of many extra frequent roadblocks we hear from insurance coverage consultants who’re nonetheless operating their enterprise on outdated programs is {that a} new resolution is simply not within the price range. 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 value of sustaining legacy programs. Selecting to maintain doing issues the best way you’ve at all times accomplished 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 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 be capable to supply the options or ease of use that staff, producers, purchasers, and downstream distribution channel companions are searching for. If these clients, staff, and companions aren’t glad with their experiences, they could take their enterprise (and their expertise) elsewhere, seeking a extra fashionable expertise.
2. Legacy expertise can hurt your popularity
You’re employed laborious to keep up a constructive popularity in your insurance coverage enterprise. A poor popularity may lead your purchasers straight into the arms of your rivals and negatively influence your backside line. We noticed first hand how outdated expertise managed to pull Southwest Airways’ popularity via the mud in a matter of days.
On the subject of insurance coverage, there doesn’t essentially should be an enormous breakdown or error along with your legacy system to negatively influence how present and potential clients and staff view your organization. It can be the day-in-day-out tedium of outdated expertise that lastly will get to individuals. For those who proceed utilizing legacy expertise, staff, prospects, and purchasers might view your organization as being behind the occasions. And in case your technological infrastructure appears prefer it’s caught prior to now you’ll have a tougher time convincing anybody of your future spot out there.
3. Legacy expertise might get you in regulatory hassle
A significant downside of legacy expertise is its incapability to combine with newer software program. Insurance coverage professionals want programs that may talk with one another and paint a whole image of their knowledge with the intention to make knowledgeable enterprise choices. The complexity of the insurance coverage trade’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 vital compliance administration value financial savings and guarantee steady producer and company compliance – with out the guide effort that you just’d want to make sure the identical stage of compliance as we speak.
4. Legacy expertise can inhibit progress at your company, service, or MGA/MGU
Legacy programs are hardly ever scalable. Fashionable issues want fashionable options and legacy expertise is commonly unequipped to handle present wants. Due to this, legacy programs is usually a main barrier to a company’s progress and innovation.
The longer an company waits to replace its legacy programs, the tougher will probably be to handle present market wants and achieve new market share. For those who’re not able to utterly overhaul your group’s legacy programs, there are different choices that may assist you 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 possible your workers is spending an excessive amount of time on guide, 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.
With out up to date insurtech, processes like producer onboarding and compliance administration eat up much more time and assets. Keep in mind earlier after we talked about that legacy programs don’t normally combine simply with different expertise? This lack of communication can create knowledge and workflow silos that block info from flowing between groups and finally decelerate processes.
6. Legacy expertise might make you extra susceptible to cyber assaults
Hackers are consistently discovering new methods to sneak previous a company’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 a giant concern for insurance coverage companies and carriers which frequently retailer huge quantities of delicate shopper info. Outdated software program might make that knowledge extra susceptible to an information breach, bringing you proper again to earlier factors about reputational hurt and laborious 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 trade 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 in case 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.
In the present day’s job-seekers are searching for fashionable firms which are utilizing the most recent expertise to enhance each the shopper and worker expertise. Providing producers a high-tech expertise with much less time spent on guide, repetitive, time-consuming duties might 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 might have beforehand held relating to your legacy programs. 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 expertise can do much more hurt than good in the case of your company, service, or MGA.
Don’t be like Southwest and wait till the harm is already accomplished. The time has come to throw out your legacy programs together with the issues they’re inflicting your insurance coverage enterprise. For those who’re able to declare your independence from outdated tech and processes see how AgentSync might help you attain your full potential.
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