The insurance industry is rarely known for agility or innovation.
When McKinsey did their study of cloud adoption in 2016, insurance was one of the last adopters of either the private or public cloud. Other highly regulated sectors such as healthcare and other types of financial services were ahead of the curve.
Major industry trends
But the tides are beginning to shift as insurers are aware of industry disruption coming from many sides: economic growth is slowing in many countries, and competition is being disrupted by technology giants and insurtechs. At the same time, customer expectations have changed: people want a higher degree of personalization, freedom of choice, and faster service. Additionally, research done by IBM suggests the money spent on legacy systems to keep systems working does not appear to have a meaningful impact on enterprise success.
Above: Insurance on the platform: the positive impact on costs and revenues, IBM Research Insights
Move faster in ways once thought impossible
Platform business models which are hosted in the cloud are a way out for several reasons.
Firstly, insurers are insulated from system maintenance disruptions because the cloud provider takes care of the infrastructure maintenance. Secondly, instead of maintaining CPUs and storage in the data centre, businesses save on IT costs by ‘renting’ these from the cloud provider. Thirdly, platforms help businesses grow by generating revenue from diverse sources like embedded insurance. Software releases that were once scheduled in terms of months or years can now be released in days or weeks. Moreover, to power services, deliver innovative user experiences, and receive real-time analytics, businesses need the cloud to move faster.
PolicyDock’s API-first technology can do all the above for you after the multiple product repetitions inherent within legacy systems are reduced to just a few product clusters. What’s more, our APIs can be customized for an insurer’s slick user interface.
Commissioning PolicyDock to build a platform model for you is a far more economical and efficient approach compared to doing it yourself. With PolicyDock, a product can be launched in under two weeks with just 2-4 full-time employees. Constructing a platform on your own would take around 24 months and require 5 times more manpower. And then, there are the costs associated with maintenance and upgrades if you construct your own platform. Each of these require a minimum of $1 million alone. You would also be constantly redesigning your platform to achieve optimum technical agility - PolicyDock’s API microservices architecture removes that hassle.
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