Discover the right digital solution for your insurance firm
In this digital age, it shouldn't come as a surprise that most, if not all insurance companies are still using traditional, on-premises management systems. Yet, it does.
The insurance industry has been operating for decades and has systems in place that work; as a result, the thought of changing can seem overwhelming -- so why both? Well, because this logic is problematic. In particular, the idea that surrounding events and societal changes will not impact how insurance brokers operate -- which, as we saw with the COVID-19 pandemic, is simply not the case.
It's no doubt time for the insurance sector to catch up and undergo a digital transformation, but while the thought of transformation is relatively easy and the ideation stage of transformation is relatively straightforward, the execution is hard. Not only do you need to think about internal practises and current system costs, but you'll also need to think about your customer, their journey and what that means for your business.
The main question remains, what is the best way to evolve? Should you head straight for an off-the-shelf product or invest time in a bespoke build?
This is the second blog of the series, within which we are breaking down insights from the virtual roundtable session, ‘The Need for Speed: How can insurers win the digital race to stay competitive in the 'next normal' post-Covid-19’, hosted by our partner OutSystems. In this blog, we'll be covering the age-old question of build vs. buy.
This is the second blog of the series, within which we are breaking down insights from the virtual roundtable session, 'The Need for Speed: How can insurers win the digital race to stay competitive in the 'next normal' post-Covid-19', hosted by our partner Outsystems.
Build – the cost of differentiating yourself in the industry.
The idea of a bespoke product is tempting; you'll get and pay for exactly what you need. While true, you'll also pay significantly more to do so. We've broken down the pros and cons of bespoke builds in more detail below:
PRO: Customised and designed specifically for you and your clients
Centred around your way of working, bespoke builds offer a level of customisation that out-of-the-box solutions traditionally cannot offer.
A well-thought-out bespoke build can differentiate your insurance business in the market, by catering to what your customer’s looking for and comparing you against.
Whether it’s the direct market, intermediate or the broker market – your system will be able to drive their journey and their experience.
CON: It's expensive
To get the best system, you need the right experts. When you select the bespoke option, you won't just have the cost of one developer, but many. Building a management system requires a wealth of knowledge and expertise that one person simply cannot offer.
PRO: Increased agility and responsiveness
In the insurance sector particularly, speed is the priority. Any digital infrastructure needs to be agile and responsive to both social and environmental changes.
Having a bespoke option allows you to ensure your system is up-to-date and can adapt to the changes your business will face in the future -- whether that be new compliance regulations or customer preferences. Being agile in your response to change is a powerful advantage that a bespoke option can offer your business.
CON: Speed of development is only limited by cost
As the saying goes, "Practise makes perfect" and to get the perfect solution with the right functionality will take time.
You'll need to account for testing, development and adaption periods before you'll see any benefits of a bespoke system. However, with that in mind, you decide the pace of development and can control what you'll get when. If budget allows then a bespoke build could be for you.
Buy – It's ready to go, but is it right?
Buying an out-of-the-box solution simplifies the entire process of implementing a new system. You'll not only get a ready-to-use and a proven solution but a team of experts that are available for consultations as you need.
While new features are released frequently, will they steer your business in a direction you didn’t want it to go, resulting in your process or customer journey having to change?
Here's what you need to know:
PRO: Better buying experience
It's ready when you are; an out-of-the-box solution means you'll get a tested system, implementation help, and more. Making the experience definitely worthwhile.
CON: Designed for problems that have been, not those that are coming
An out-of-the-box solution is designed to help common past and recurring problems. While many of these will apply to your business, some may not -- meaning you'll be paying for a system that only partly resolves your problems. In addition to this, the accessibility that comes with out-of-the-box solutions means your competitor could be running the same system, which could impact your competitive point of difference.
PRO: Tried and tested
Out-of-the-box solutions are tested profusely before they're launched, meaning you'll implement a system that works as promised without delay. Unlike that of a bespoke solution, you won’t have to waste precious time testing, once you have implemented your new system, you're good to go. With that said, migration of legacy data into a system you cannot alter is typically problematic.
CON: Stock standard solutions leave little room for agility
Amidst the COVID-19 pandemic, we saw many businesses across a variety of sectors struggle to adapt quickly to the immediate changes the pandemic brought. Mainly because their off-the-shelf solutions were designed for business as usual, not for the unusual and fast change experienced. They did not have the agility or the speed for change and development built into them to be able to adapt.
The hybrid approach: offering traditional insurance systems with the flexibility to adapt at pace
The conclusion reached by the panel indicates that most insurance organisations prefer a combined, hybrid approach, where they retain their traditional core platforms a certain way, but then have an ‘adaption layer’, or a flexible application development layer over the top. This approach allows them to react faster and bring different experiences to both their customers and their employees.
OutSystems has helped insurers around the globe deliver next-generation digital insurance solutions. It gives you the flexibility to integrate, move away from products and focus on customer journeys. It provides you with the ability to do all of that in the box with a full-stack environment that can cover everything from UI through to managing processes and if necessary, data.
Your customers expect some core things from your company like data security, privacy and claim systems that are available 24/7. OutSystems gives you those capabilities in a faster, reliable and controlled way, to deliver the ultimate customer experience.
It allows you to integrate and extend because you're never going to replace all of your legacy infrastructures (nor should you try). But you do need to be able to both integrate into and extend when and where needed to get the best results. Considering a digital transformation for your own business? Read our comprehensive guide to low code development and how it can help you.
Harness technology that adapts, grows and moves with you to offer better services to your customers. Innovative services will win market share in what is already a very busy and congested market.
If you’d like to discuss how we leverage OutSystems to meet the digital transformation challenges of the insurance industry, get in touch with us.