By Richard Clark, Head of Business Development at Xuber
Twenty twelve is definitely a year to remember, especially if you were lucky enough to be in London. This year saw the Queen’s Diamond Jubilee, the 2012 Summer Olympic and Paralympic Games and, further afield, the French election, the American election and the UEFA European Championships. Closing in on the end of the year, December tends to be a month of reflection, analysing our performance from the past twelve months alongside important industry trends in order to plan for the upcoming year.
As a solutions provider with particular experience in the high-value/low-volume segment of the industry, particularly in the London and US specialty markets, we saw five major trends develop within the insurance technology sector this year, all of which we expect to carry on into 2013.
One area of focus that continued to develop this year is that of companies choosing ‘best of breed’ solutions over end-to-end options. Best of breed can offer tailored fixes to an organisation’s problems, allowing them to target and solve specific issues or weaknesses within their current architecture. Claims in particular have fully embraced the best of breed trend as typically claims software systems have been purely transactional, focusing on single tasks instead of the whole claims case management process. For years, claims managers have been crying out for solutions that cater to their tailored needs – enter best of breed.
In the policy arena, the focus is still very much on the needs of the underwriter. Companies are looking for automation and standardisation in the underwriting room. Up until now front of office underwriters were left using laptop based systems, often functionally very different from one class of business to another. The push towards automation eases the transition from quote to post-bind by eliminating the need to re-key information and by avoiding discrepancies in data duplication caused by human error. It also allows for a better control of exposure, particularly when dealing with multiple channels to market. Better systems for front of office underwriting is a trend we fully expect to continue into 2013.
It is an industry dedicated to managing risk, yet the insurance industry has been putting itself at risk for years. Organisations are completely dependent on their IT systems, but their investment hasn’t matched their speed of growth and most are left using legacy systems. Many of these systems are decades old, with multiple points of failure and are run on out of date programming languages. Twenty twelve saw an increase in awareness of potential legacy issues and many companies are now waking up to that concern as a catalyst for change. Organisations that are growing, flexing and scaling need systems that can keep up with them. Legacy systems are a barrier to growth, and beyond that, they will have difficulty meeting regulatory compliance. The old adage of “if it ain’t broke, don’t fix it” is slowly losing popularity, and instead organisations are pro-actively defending themselves against the ticking time bomb of legacy systems. Companies may still have their head in the sand about the issue, but boardrooms are beginning to see the light, a trend we see continuing well into 2013 and beyond, hopefully until all legacy systems have been replaced.
In twenty twelve, we saw a push towards customer centricity within insurance technology. Where systems have been policy driven in the past, this year organisations began making the move to more holistic, integrated systems. Being able to join the dots between the various lines of the business allows for improved customer service, increased cross selling and up selling opportunities and better fraud detection. This is particularly important for companies operating on a global scale, wanting to give the same experience to all of their customers around the world. Moving forward we expect insurance companies that understand the need for customer centricity to make changes to their policy administration systems and look at how they can better cater for their evolving business.
It wouldn’t be a complete round-up of the top trends of 2012 if we neglected to mention mobile, more specifically tablets. Mobile computing has been in the consumer press for years, more recently it’s made a stir in the American market but we in the London market are only now truly discovering its usefulness within the insurance industry. Beyond apps, companies are looking at how they can actually use their insurance software suite on their tablets and mobile devices. Abandoning fixed desk, PC or even laptop computers in favour of the flexibility offered by tablets is a trend we see gathering pace in 2013, definitely one to watch.
Best of breed solutions, front of office underwriting, the move away from legacy systems and the move towards customer centricity and mobile computing are all trends that show how insurance technology is moving forward, not just in the B2C market but also in commercial and reinsurance. Once viewed as an archaic, out-of-touch industry, insurance companies are embracing modern technologies in order to improve service and evolve the market. Next year we expect to see these five trends become almost industry norms as companies search for new ways to improve processes. One technology trend to watch for the future is the move towards consuming software on demand rather than via the traditional licensing model. Cloud computing and SaaS (software as a service) have already begun to peak interest and in 2013 we should see exactly how they’ll shake up the industry.
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