“Even if your on-prem solution works with APIs and micro services, it's stuck because those APIs and services were not designed for on-prem.”
Digital innovation is relentlessly redefining the insurance eco-system. In the final instalment of our 3-part series with Bryan Falchuk, the insurance veteran and author of the book series, The Future of Insurance: From Disruption to Evolution, underscores the flexibility and advantage a business can look forward to by migrating to the cloud.
Are some people afraid of the costs associated with digitalization?
I have seen that, yes. Yet I've also seen solutions with between 10-25x returns – not percent, but x return on the cost. I don't know how you say No to that. Sometimes, this is the “shortcut problem” at play. When you give someone a shortcut to drive, they tend to think it's longer the first time that they do it because it’s unfamiliar, even if they were clocking it and it comes out faster.
Some people are also waiting for their core system provider to solve everything rather than engaging with a series of providers of point-solutions.
But if you talk to the core system providers, they are tapping into an ecosystem of lots of great tools by plugging into APIs and micro services. This is the way technology works today. For example, if you use Salesforce or HubSpot, there are all these other tools you can connect into them from other providers. Neither CRM solution builds all the tools you may need themselves.
What is the one thing that insurers can start moving to the cloud first?
In a perfect world it would be great to see core systems moved to the cloud even though that is a massive change.
If you could do that, it enables so much flexibility, so many new tools, lower costs, better solutions, better data, more ability for that data to be tapped into by other solutions, or for other sources to join that data.
If you're not ready for that, there are ways to do that more simply. For instance, there are tools in Claims, risk management tools, quoting tools. There are much better data analytics and prediction tools with AI and machine learning at play which keep getting better and those are all cloud based.
If there was one thing you could say to a carrier about how cloud technology can add value to the business, what would that be?
I think the number one thing is the flexibility. And if we haven't learned the value of flexibility in the past year and a half, I think we've missed the lesson. There really is no way to achieve flexibility without the cloud because anything that's on premises or installed is inherently going to have some constraints. Period. It's going to need true, heavy integration because nothing's being built to connect to these older ways of architecting systems anymore.
Even if your on-prem solution works with APIs and micro services, it's stuck because those APIs and services were not designed for on-prem.
What pain points do you think companies like PolicyDock can solve to give customers a better experience?
To be fair, most businesses aren't big enough to justify a $100 million investment. So being able to have something that is still going to meet the need for all that flexibility, but without having to be in this nine figure world is critical.
Sometimes simplicity scares people away from thinking it's real.
I went up against that when I was in Insurtech and selling a solution that was simple and easy to deploy. People assumed that was just a sales pitch, and it couldn’t actually be so simple in practice. But the reality is that there are a new generation of tools out there which are examples of insurance innovation. Often, they are simple to extract value from and are lightweight. The cost paradigm is completely different and PolicyDock to me is a prime example of that.
Will existing staff in the company need to be retrained if the company goes all out to embrace the cloud technology or digital transformation as a whole?
There will be change management, you do need to train people and some people will take more time than others, that's normal. But while that mustn’t be overlooked, you also should not use it as a reason not to make the move. You will have to one day anyway, so why endure the constraints and opportunity costs until that day arrives?
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