7 Methods Legacy Insurance coverage Know-how Might Be Holding you Again

This publish is a part of a sequence sponsored by AgentSync.

The Southwest Airways catastrophe that rounded out 2022 could 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The debacle helped begin a bigger dialog on a subject we’ve been speaking about for fairly a while now: the issue with outdated know-how. As we start the brand new yr, 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 know-how and the insurance coverage trade usually go hand in hand

The insurance coverage trade is not any stranger to outdated know-how. 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 principally pressured to replace their processes and softwares with a purpose to proceed working underneath new security tips.

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 However, numerous carriers and companies are nonetheless counting on the outdated means of doing issues. Why is that?

The reply isn’t easy. Some could also be frightened about the associated fee whereas others are extra involved with the problem of changing legacy programs. Some are simply afraid the change will likely 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 Nonetheless, if Southwest’s breakdown taught us something, it’s that no excuse is value risking the injury that outdated know-how may cause to your group, staff, and clients.

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(as that’s our experience), however many of those issues apply to companies in any trade that also depend on outdated know-how.

1. Legacy know-how is cost-heavy

One of many extra widespread roadblocks we hear from insurance coverage consultants who’re nonetheless operating their enterprise on outdated programs is {that a} new resolution is simply not within the funds. 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 cost of maintaining legacy systems. Selecting to maintain doing issues the best way you’ve all the time completed them as a result of it appears simpler (or cheaper) now is called technical debt. And like most money owed, they finally come due.

The older programs get, the extra they value to keep up. Plus, legacy know-how 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, purchasers, and downstream distribution channel companions are in search of. If these clients, staff, and companions aren’t happy with their experiences, they might take their enterprise (and their expertise) elsewhere, looking for a extra fashionable expertise.

2. Legacy know-how can hurt your status

You’re employed arduous to keep up a constructive status to your insurance coverage enterprise. A poor status could lead on your purchasers straight into the palms of your rivals and negatively influence your backside line. We noticed first hand how outdated know-how managed to pull Southwest Airways’ reputation via the mud in a matter of days.

In the case of insurance coverage, there doesn’t essentially should be an enormous breakdown or error together with your legacy system to negatively influence how present and potential clients and staff view your organization. It may also be the day-in-day-out tedium of outdated know-how that lastly will get to folks. Should you proceed utilizing legacy know-how, staff, prospects, and purchasers could view your organization as being behind the occasions. 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 out there.

3. Legacy know-how might get you in regulatory bother

A serious downside of legacy know-how is its incapability to combine with newer software program. Insurance coverage professionals want programs that may talk with one another and paint an entire image of their information with a purpose to make knowledgeable enterprise selections. 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 important compliance administration value financial savings and guarantee steady producer and company compliance – with out the handbook effort that you simply’d want to make sure the identical stage of compliance immediately.

4. Legacy know-how can inhibit progress at your company, service, or MGA/MGU

Legacy programs are not often scalable. Fashionable issues want fashionable options and legacy know-how is usually unequipped to deal with present wants. Due to this, legacy programs generally is a main barrier to a corporation’s progress and innovation.

The longer an company waits to replace its legacy programs, the more durable it is going to be to deal with present market wants and acquire new market share. Should you’re not able to fully overhaul your group’s legacy programs, there are different choices that may aid you dip your foot within the pool of innovation.

5. Legacy know-how fuels inefficient workflows

Legacy programs can block your group from realizing its full potential. With outdated know-how, it’s seemingly your workers is spending an excessive amount of time on handbook, repetitive, and non-revenue-generating duties. Not solely is that this a waste of expertise, nevertheless it additionally will increase the prospect 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 sources. Keep in mind earlier after we talked about that legacy programs don’t often combine simply with different know-how? This lack of communication can create data and workflow silos that block data from flowing between groups and in the end decelerate processes.

6. Legacy know-how might make you extra susceptible to cyber assaults

Hackers are continually discovering new methods to sneak previous a corporation’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 regularly retailer huge quantities of delicate shopper data. Outdated software program might make that information extra susceptible to a knowledge breach, bringing you proper again to earlier factors about reputational hurt and arduous greenback prices.

7. Legacy know-how 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 prefer to work. And for those who suppose the prospect to work with software program that predates their grandmother is an efficient promoting level then oh boy do now we have information for you.

At present’s job-seekers are in search of fashionable firms which might be utilizing the newest know-how to enhance each the client and worker expertise. Providing 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!

One of the 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 will 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 Airways for proof). Clearly, outdated know-how can do much more hurt than good relating to your company, service, 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. Should you’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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