Is operational efficiency within reach for insurer platforms – RDT

While some business classes remain firmly in a hard market as others soften, insurers are increasingly focused on tackling operational complexity.

Nearly three quarters of insurers believe improving efficiency is their highest value goal. However, operational efficiency shouldn’t be a goal in its own right, but an ongoing practice ingrained in the business.

Achieving this is no small feat, however.

It demands a sophisticated, nuanced approach, given the complexity, resource demands and expertise required to navigate insurers’ intricate processes.

Compounding this challenge, the RDT Tech Poll, published in June this year, revealed that budgetary constraints are the most significant barrier to advancing technology platforms for insurers and MGAs.

Further, almost a quarter of insurer technology teams stated that they were currently aiming to replace entire legacy systems.

This raises the question – while achieving operational efficiency in insurer platforms is desirable, considering the focus on legacy systems, is it achievable?

Rip and replace?

Frankly, in today’s market, the complete replacement approach is largely ineffective and prohibitively expensive. Rip and replace programs have proven costly and high risk, with a 70% failure rate due to their disruptive nature.

That said, some legacy systems are still fit for specific purposes.

They perform essential functions reliably and are deeply embedded in critical operations. The key challenge with retaining them is their inability to support modernisation and automation needs, often requiring significant manual intervention and lacking flexibility.

There’s a better way to enhance operational efficiency – a hybrid approach that integrates modern solutions with existing systems.

This method is far more cost effective and efficient in transforming the overall estate.

Insurers and MGAs face constant pressure to drive growth and efficiency, but are often hindered by the burden of an expensive, prolonged system overhaul. Legacy systems span critical functions and therefore lead to frustration among innovators.

Future proof

Many fail to recognise the market’s future-proof solutions, such as RDT’s agile composition engine (Ace) – a software solution that combines automation with human oversight, supporting scalability and allowing organisations to grow and quickly adapt without overhauling existing systems.

Ace has helped streamline claims processes, reduce operational costs and enhance client satisfaction by enabling faster settlements and better claims outcomes.

What should insurers look for in such a solution? Ideally, an engine that can flexibly meet evolving business needs by bridging legacy and modern systems. This engine should enable automation and innovation that legacy platforms lack.

Insurers must aim to automate processes, particularly in claims, so they integrate seamlessly with both modern and legacy systems and come pre-configured with essential industry integrations with crucial industry-specific integrations, making it ready for immediate deployment.

These integrations encompass essential tools, applications and systems commonly used in the insurance sector such as Copart and Vizion and client service integrations such as unified communication platforms.

Moreover, the solution must be easy to configure and maintain, empowering insurers to control and modify processes effortlessly. Insurers should seek out solutions equipped with pre-built templates and processes for claims and distribution, ready for immediate deployment.

A hybrid approach reduces IT burdens and delivers quick benefits post-implementation.

By integrating modern solutions with existing systems, insurers can achieve significant operational efficiency, driving growth and maintaining competitiveness in a challenging market.

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