New data released by Unqork, an enterprise startup with a transformational no-code platform for insurance and financial services companies, finds that integration with legacy systems is the biggest technology challenge for almost half of insurers. The survey, which polled senior executives from the largest insurers at LIMRA 2018, revealed that 49 percent view integration with legacy systems as the greatest technology pain point, far ahead of speed to market (21 percent) and misalignment between business requirements and IT delivery (20 percent), respectively.
Despite these technology challenges, 60 percent of insurers forecast digitization to be the key innovation that will drive their business going forward (as it pertains to the reduction of paper in onboarding, claims processes, etc.). Digitization was chosen ahead of big data (44 percent), artificial intelligence (40 percent), robotic process automation (RPA) (25 percent) and blockchain (six percent).
“This survey qualitatively confirms what we’ve seen throughout our careers, that insurers perceive legacy systems as a hurdle to growth and despite the disruptive power of innovations such as AI and blockchain, they are far away from leveraging their potential,” said Gary Hoberman, CEO and founder of Unqork. “However, pointing to legacy technologies as a barrier is a myth, based mostly on the fear of accepting sunk costs. Insurers can still progress by refocusing on their competitive advantage – whether that is product design, underwriting, risk management or claims servicing – and grow their business.”
Clear industry opportunity for digitization to optimize client onboarding
Insurers are steadily recognizing the different areas where digital transformation could enhance their business. Over two-thirds (67 percent) see the greatest opportunity for digital transformation in client onboarding, leading the pack ahead of product development (36 percent), claims (32 percent) and risk management (22 percent). In fact, eight in 10 insurers are confident that digitization of the business and the elimination of paper in the onboarding process will help their company, at a time when 43 percent of respondents say that at least half of applications contain errors or are missing information.
Also, the survey found that only 40 percent of insurers feel current technology spend at their company is significantly improving its operations (i.e. boosting sales, lowering costs, etc.).
Gary added: “While today’s insurers continue to allocate money and resources to hard-code and build the legacy systems of the future, we have created a platform that avoids this entirely by developing a drag-and-drop, no-code platform that digitizes the client lifecycle. We can build a complete client onboarding process across multiple business verticals in weeks versus months or years, while eliminating errors (NIGO). This empowers our clients and their IT teams to get back to what they do best.”
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