Any insurance firm is aware of the need to digitise. A digital proposition not only provides a stronger, more integrated offering for customers but also helps insurers secure new business, cross-sell products and gain deeper insights through data analysis.

“The motivation to modernise technology should be business drivers such as launching new products or improving the net promoter score with customers,” says Lautaro Mon, Insurance Modernisation Managing Director at Charles Taylor InsureTech.

An effective digital modernisation program cannot be implemented overnight, however. Insurers need to adapt their core technology – often legacy systems that may have been in place for decades – so they can offer targeted improvements while maintaining operations and evolving at a pace that suits them.

The following steps can help guide your insurance firm on its journey to digital modernisation:

Upgrade legacy systems

Legacy systems can hinder insurance firms from adopting new technology and taking advantage of its potential. However, upgrading them must be done correctly. “Replacing a core legacy system is the business equivalent of open-heart surgery,” says Mon. “To do it, you need to stop the business.

“A better way is to take a more evolutionary approach to the client tech ecosystem as a whole and replace or complement the elements that stop the business from achieving results.”

The key is to understand the main barriers an insurer faces from a technology perspective and then focus on those, developing specific fixes and workarounds to overcome them. “The second point is to map out how everything is working today, which pieces you want to improve for tomorrow and how the tech ecosystem needs to evolve to achieve those goals,” adds Mon.

Build stronger data analytics

Insurers generate a vast amount of data every day. By using advanced data analytics – and machine learning from various sources – they can develop a deeper understanding of their customers, identify new opportunities and improve fraud detection.

Mon emphasises the importance of taking a case-by-case approach rather than embarking on overly ambitious projects. “By picking one business output that you want to achieve, you can capture the data that matters for that problem you’re trying to solve,” he says. “That will give you the data analytics element, and you can then apply machine learning to that.” Once a particular use case is implemented, firms can move on to the next project, he adds.

Enhance the customer experience

An effective digital offering can enhance the quality of customer interactions and lead to better levels of service across multiple channels.

“Customers today experience remarkable services through banking or e-commerce, and they expect the same level of quality from their insurance providers,” says Mon. Beyond meeting today’s customers’ expectations, insurers also need to respond to emerging trends – such as the use of artificial intelligence – as they develop in the future.

This means evaluating and redesigning processes from the customer’s perspective, and understanding the technology involved in bringing that vision to life, says Mon. “It’s all about designing the experience that your customer would love to have,” he adds. While some compromises may be necessary, he admits, the aim should be to get as close as possible to that ambition.

Improve document and process management

Effective document and process management is essential for insurance firms, ensuring that customers, other insurers and third parties can access information when needed. Efficiency is vital for insurers to keep overhead and administration costs down.

From a technological perspective, this requires an effective document management system that is available to those who need it while complying with regulations. “It’s about designing the best possible outcome in relation to the expectations that customers have,” says Mon.

Often, insurers are held back by processes rather than technology, Mon adds, with certain elements not connected to each other. “The challenge is how to evolve the whole spaghetti into something that is flexible and adaptive,” he explains.

Increase process automation

Software and technology can help insurers automate specific business processes without a major overhaul of core systems, improving efficiency, reducing errors and eliminating issues that can cause friction.

This applies both internal processes and more client-facing ones, such as enabling customers to receive quotes or payments through a simple digital process. “The first is important to the insurance firm because it leads to better results or higher profits,” says Mon. “The second could lead to more customers choosing that business, and higher sales.”

For more information on how to modernise your insurance business, download Charles Taylor’s guide here