Video: Why are insurers not keeping up with cutting-edge user experience?

Author Mark Lusted
  • Date January 31, 2017
  • Reading Time 2 minutes

  • Times are changing and insurers that don’t offer a simple, intuitive user experience will be left behind.
  • Avoid the pitfalls of traditional IT projects by using rapid prototyping and user testing during development.
  • Don’t make digital transformation dependent on a core system replacement. Often, it’s not necessary.

The insurance sector is facing a critical time. Customers expect simple, intuitive experiences from their insurers that offer true self-service on par with other sectors. Why are most incumbent insurers still unable to deliver this?

Many think that doing this will mean overhauling their legacy IT systems. Moving away from existing systems is particularly undesirable if you’re a business that wants to quickly address the problem and move on. The thought of a multi-year system procurement and implementation project causes sleepless nights. There is also the fear that a ‘rip and replace’ project will fail or run over budget.

But, the truth is that delivering cutting-edge user experiences in most cases does not require a core system change. It starts with culture and processes. To circumvent the inertia of years gone by, insurers need to act like start-ups by adopting their best practices and thinking. If they do so, they can really leverage their advantage over start-ups. After all, they already have the capital, know-how, regulatory approval and, of course, actual customers.

First they have to understand that the old way of running IT projects is no longer the right way. Rapid prototyping and testing with real customers in short sprints must be at the core of a new agile workflow. This can be transformative as it enables experimentation, learning, iteration and validating the business case before committing to development.

Rather than a full system overhaul, businesses can build middleware layers that interact between their systems and the frontend, allowing them a way to work around the incumbent technology and still provide customers with the best experience. The level of complexity of the middleware developed depends on the insurance products, number of systems to be integrated with and number of self-service touchpoints offered. But in most cases, this is far simpler and more cost-effective than a system change.