5 Ways to Meet Insurance Digital Needs on Your New IT BudgetLast updated: February 5, 2021 | 4 min read
By the end of 2019, most insurance carriers had decided to increase their IT budgets. They developed plans to implement digital technology to get to market faster, boost digital capabilities, and create efficiencies. But the detrimental financial impact COVID-19 is having on the industry has forced most insurers to rethink their strategy.
IT departments now not only have to meet the increasing need for digital solutions in a time of social distancing, but they must also do so on a smaller budget.
To help you meet your digital goals in the new normal, follow these five tips.
1. Keep Innovating
Despite the negative impact COVID-19 is having on IT budgets, it has also emphasized the need to continue investing in digital, cloud, automation, modernization, and efficiency.
As a result, many top carriers have decided to accelerate key initiatives such as core system modernization or customer communications management (CCM) due to the short-term and long-term critical need for the business.
While you may not be able to sustain all your planned IT projects on your new budget, consider creating a prioritized list of projects to determine which ones you can and cannot afford to delay.
When creating this list, keep the following in mind:
- Work closely with key stakeholders to determine lower priority enterprise projects that require IT investment
- Focus limited resources towards accelerating several key projects instead of trying to complete all projects with diminished effort
- Give a different weight to troubled projects that require large amounts of resources
- Invest in key digital capabilities that are more important than previously expected
2. Reconsider Core System Rollouts
Migrating to a new core system is a daunting task. It requires an abundance of time, money, and resources to ensure success.
Now more than ever, insurers are looking for ways to increase efficiency and productivity, generate more revenue, reduce costs, and minimize risk, or a combination of these.
So before committing to an expensive, resource-consuming core system replacement, consider focusing on your CCM instead. In many cases, insurers who implement CCM before investing in a new core system can meet their goals and solve problems with far less complexity and cost. While this may impact project timelines, it also allows insurers to keep their legacy core system as long as possible while still creating operational efficiencies, delivering better experiences, and reducing risks and costs.
3. Invest in Cloud and Automation
With the recent changes brought about by the pandemic, carriers that were not already cloud-based have started or accelerated the transition from on-premise to cloud-based systems.
While a few carriers may choose to delay big cloud implementation projects or spend on in-house systems to save money, it’s risky to maintain on-premise systems in challenging times like these. And no IT organization can match the efficiencies and agility of the cloud.
This pandemic has also pushed many carriers to prioritize automating manual and paper-heavy processes. This helps insurers to get market faster, enhance claims experiences, and improve underwriting results, all while allowing teams to focus on more critical processes.
By investing in cloud and automation technology, insurers can enable a productive and secure remote workforce while ensuring efficiency and optimizing paperless and touchless insurance processes.
4. Leverage the SaaS Business Model
When looking to implement new technology into your 2020 budget, consider the benefits of SaaS pricing models.
Traditional models force the organization to buy an upgrade package and install it themselves or pay for specialized services to do so.
Since SaaS is subscription-based, it means there is no hardware to purchase, no software to install, no networks to configure, nothing to maintain in-house, and there are regular releases and updates. This brings lower upfront costs, reduced time to benefit, and greater flexibility and scalability.
A SaaS solution generally means lower costs in the short and long-term. This is because the flexible subscription price of these solutions typically includes support, maintenance, upgrades, and unlimited access. Additionally, costs and effort associated with updates and new releases are lower. This also means there is minimal effort needed to plan and execute implementations of new releases, empowering insurers to get to market and recognize value faster.
5. Rethink Outsourcing
When COVID-19 hit, many insurers struggled to continue delivering quality service due to interrupted business continuity from technology and service partners. This caused many insurers to reconsider their current outsourcing strategy.
If you’re looking to purchase new technology, keep this in mind and search for a solution that is easy to implement, maintain, and use. Training internal resources to do this work can minimize risk and reduce your reliance on partnerships.
However, for some insurers, it might be more cost-effective and efficient to build key technology partnerships. For carriers that have a large amount of staff on sick leave, are struggling with the transition to remote work, or are facing other challenges, this is most likely the best solution. Finding the right technology partners with reliable service and a focus on customer success will help you optimize your processes and ensure business as usual.
Start Innovating Today
While insurance IT teams are facing many challenges, especially new budgets, it’s essential to keep innovation a top priority. As the market moves towards a digital-first, cloud-based technology stack, you don’t want to find yourself behind the curve in this competitive market.
For help with customer communications or to learn more about cloud-based CCM, get in touch with our insurance CCM experts. To discover more about the impact of COVID-19 on insurance, visit our Resource Center for more research and information.
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