By Tom Murray, Head of Product Strategy for LifePlus Solutions at Majesco.
This is no longer going to work in a world that is morphing into an on-demand, 24x7 environment which brooks no delay in terms of service fulfilment.
The bottom line is that life assurance intermediaries, such as agents and brokers, and direct customers are looking for a much higher level of service than is currently provided by existing business processes employed by many carriers. Real-time values and the ability to check their policies at any time of day or night is now regarded as de rigueur. And there is constant pressure to deliver more, such as allowing people to amend their own data and giving them information on their own financial position wherever they are and via whatever medium they choose.
The trouble for many life companies is that they are held back by a huge encumbrance - their legacy systems. Large banks of policies are already residing on these systems and the cost of maintaining the existing level of service is very high. The technologies used are designed to provide the type of batch-style, mass number-crunching processing that suited the industry 20 years ago, not the on-demand, real-time approach that is expected by customers today. Requests for information on the value of investments or pensions frequently take so long to process, that the information is out of date and useless by the time the customer actually gets it.
And it is not just the company’s own systems that can be a problem. If companies are to deliver real-time services to their end customers, they will also need real-time services from their own information suppliers. So, they need to switch to suppliers who are capable to provide this level of service.
Life and pension customers want services delivered on multiple platforms; they want real-time figures and not to always be receiving valuations that are weeks old; they want to be able to access the same service whether they are currently using their smartphone, their tablet or are on their computer; when they make a claim, they want it to be facilitated rapidly without undue delay caused by paper-based bureaucracy.
The only way that this demand from consumers can be met is by the use of flexible, cloud-based services throughout the organisation. Dynamic in-bound services are needed to make sure that the company is receiving information as rapidly as possible, whether it be fund prices, medical responses, or standard information such as credit checks. Without this, it will be impossible for companies to deliver the real-time outbound services their hard-won customers are demanding.
It is not so with the legacy systems. These systems are like a lead weight, dragging down the attempts of companies to be customer centric. Older technologies just can’t perform in this new world that is demanding such high levels of responsive service. As hard as it is to embrace changes, companies need to take a “digital-first” approach, making digital customer journeys the default and only falling back on more traditional approaches for the exceptional cases.
Insurers must examine the extent to which all aspects of their operations could benefit from being digitalised. If one adopts a mind-set of assuming customers want to interact with the company digitally, this will be to the forefront of decision making when insurers are designing their services. And services designed to deliver digitally will be vital to attract business from millennials and generation Z, those younger generations that see their devices not as an addition, but as an extension of their own self.
The key point is that technology is becoming so complicated and evolving so quickly that life and pension companies should concentrate on their expertise – designing the products and services that their customers need – and leave the management of delivery to those who specialise in that. Moving to the cloud is cost-effective, allowing for subscription payments that mean companies are only paying for the services they use, allowing them to experiment with new approaches and run fast-mini projects rather than always being forced to be conservative in their ambitions because of the scale of the cost involved in trying new strategies that have to be supported by cumbersome legacy systems.
Consumers are trusting the cloud with all their personal information, via social media, and increasingly their day-to-day financial information, via online banking. The idea of cloud-based services was once seen as very futuristic but is now a hard reality in most business areas. Online sales and services are becoming an ever-bigger part of the economy. Insurers need to join the digital revolution and move to the cloud if they want a slice of this pie.
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