The property & casualty (P&C) insurance industry stands at a pivotal moment, facing crucial decisions and opportunities for growth. A fast-changing risk landscape has created a number of opportunities for insurers, but technological adoption has been lagging overall.
To stay ahead in today's competitive landscape means adopting digital transformation for P&C insurance. Insurance companies must embrace technology to meet evolving customer demands and adapt to the ever-changing market dynamics.
One of the main challenges with digital transformation for insurance policy administration is that most technology does not provide a good one-size-fits-all solution. Instead, insurance businesses must evaluate current and future needs and create a unique solution that supports success.
Learn more about different policy administration options for your business in our video below.
They are fast, simple, and cost-effective. Their team is an extremely reasonable group of people who care, really care, about your success. Every launch has some bumps - they worked above and beyond to make sure those bumps didn't disrupt our launch or our ability to write new business. Without Solartis, I wouldn't be projecting a 30% increase in topline growth.
– Cameron Linder, CEO, Western Bowling Proprietors Insurance (WBPI), Rednil Insurance Brokers, Inc.
Digital transformation can benefit P&C insurance businesses in a number of ways:
Improving innovation and agility
Increasing employee productivity
Unlock additional revenue
Companies that commit to technological adoption can realize cost controls, improve customer experiences, and manage sustainable growth.
According to research from McKinsey, technology comprises a larger percentage of operating costs than in previous years. On average, the portion of operating expenses attributed to technology for P&C insurers rose by 36% over the past ten years.
The key driver is increasing digitalization—at both the front end, where technology enhances the customer experience, and the back end, where digital drives productivity gains and operational performance.1
With the numerous advantages of embracing insurance digital transformation, it begs the question: why have P&C insurers been hesitant to adopt these changes? The answer lies in the multitude of challenges that digital transformation presents in the insurance industry.
Unless your company is a startup, you already have at least one software program – and process – in place to manage your insurance policy administration system. These systems are considered' legacy' when they are outdated and critical to core business functions.
Legacy systems pose a significant obstacle to the digital transformation of P&C insurers. Integrating new technologies into outdated systems is a complex and costly endeavor, and developing custom APIs can be both challenging and expensive.
Despite the high costs associated with maintaining legacy policy administration systems, the expense of changing them poses a significant challenge for insurance companies looking to undergo digital transformation. This dilemma puts these companies in a precarious position as they strive to modernize their operations and stay competitive in the ever-evolving insurance landscape.
One way to future-proof your insurance system is with modern, microservice-enabled, and market-tested policy administration software.
Digital transformation requires insurance companies to commit to a number of investments: in money, as well as time invested in strategy, implementation, and user training. Moreover, as recently noted in the Harvard Business Review2, digital transformation is about more than just technology; it's about building skills and bridging a talent gap – another expensive proposition.
"Technology is always about doing more with less, yet that combination is effective only if you pair technology with the right human skills."
Adopting new technologies requires IT expertise that may be difficult for an insurance company to acquire. In fact, a recent survey3 found that 81% of insurance executives are concerned about the availability of talent with key skills.
Insurers’ most immediate priority is recruiting or developing systems specialists who can design, build and maintain elements of these emerging technologies.
It’s not all about a candidate’s technology skills either – fit requires an employee to have a number of characteristics to contribute fully to the job. Finding a candidate with the right combination of technical skills, soft skills, and experience can be incredibly challenging – and competition for ideal candidates is high.
Digital transformation isn’t just about buying an insurance technology solution and implementing it. It involves managing the change to processes, procedures, and daily activities of employees impacted by that solution.
Maximizing the return on investment in technological advancements requires companies to ensure that employees not only receive training but also actively utilize technology. By optimizing user adoption and fostering a culture of applying technology in daily activities, P&C insurance companies can fully leverage the benefits of digital transformation and enhance their overall success.
The exponential growth of data has created a number of opportunities for P&C insurance companies: providing valuable insights into customers, markets, and trends. However, managing high volumes of data – and using analytics tools to garner insights – is expensive and complicated.
While there may be several obstacles to overcome in the process of digital transformation for P&C insurance, the immense benefits it brings make it absolutely essential for the success of businesses.
One way that P&C insurance companies are beginning their digital transformation journey is by adopting a insurance microservices architecture: breaking down large, monolithic processes into smaller, agile parts that can be managed independently of one another.
A microservices partner can not only help supplement a lack of internal IT expertise but can also provide the framework to support innovative, customer-centric products with a faster time-to-market.
Solartis recently partnered with BriteCo to create a unique value-adding insurance technology ecosystem for jewelry insurance leveraging microservices. During this time, we extended both BriteCo's tool and other third-party platforms in 6 months.
Monolithic technology platforms no longer constrain insurance carriers, managing general agencies, and program administrators. P&C insurers can now replace costly components, extend, orchestrate, and collaborate with third-party providers to create unique API-centric insurance technology platforms and customer ecosystems.
Solartis Insure is a very different kind of policy administration system. We offer all the rate, quote, and policy administration microservices needed to build a custom, scalable, and API-centric insurance and service contract platform.
By simplifying purchasing and managing insurance, Solartis Insure can decrease costs, reduce time to market, and provide unlimited opportunities for new revenue.
If you want to learn more about microservices and how to jump-start your company’s digital transformation, contact Solartis today.
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