Over the past decade, insurance companies have begun modernizing their core systems and digital capabilities in response to the growing demand for services delivered over the internet. With more customers looking for convenient online options to purchase policies, make claims, and pay insurance bills, insurance carriers must accelerate their digital transformation initiatives. This move enables carriers to deliver life insurance innovation solutions that effectively cater to modern customers’ needs.
To successfully implement a digital-first strategy, insurance companies must adopt a greenfield software development approach. The greenfield approach is the process of creating a system that is designed for a new environment. This method is used by companies that need to start fresh with a clean slate that is free from the restrictions and dependencies imposed by their current legacy systems. Unlike adding incremental technology and services that must work around a legacy system, the greenfield approach allows insurance carriers to reinvent their outdated business processes.
Ultimately, the greenfield approach enables insurance companies to achieve their core business goals by deploying innovative processes and services that are responsive and flexible to customers’ demands.
The following article will discuss why today’s insurance carriers must adopt a greenfield initiative toward digital transformation.
Deliver New Winning Products in the Market Fast
Under the greenfield approach, insurance companies must focus on acquiring and integrating new technology that would improve their operations and services. This means investing in a powerful cloud-based platform that is production-ready and fully able to accelerate product deployment with open Application Programming Interfaces (APIs). Using technology that can easily integrate digital services with third-party providers via API enables both insurance carriers and third-party companies to augment their existing services and provide a wider range of insurance products.
As a result, insurance providers gain the ability to deliver new products to their market faster. Products designed using insights derived from client feedback and trends are released within months, instead of years. This is a competitive advantage over other carriers that do not have the flexibility and speed to develop new products quite as quickly.
Provide Deeper Underwriting Insights for Customers Through Data Analytics
Today, the underwriting process is moving from a hindsight model into a foresight model. Under the old hindsight model, underwriting decisions are fully based on historical data. But with the use of digital technology and analytics, the underwriting process is now giving way to the foresight model, which analyzes historical data to determine the likelihood of future events, all while actively tracking the impact of risks on customers in real-time.
To remain competitive, insurance carriers must boost their underwriting capabilities by leveraging digital technology. The greenfield approach encourages automating routine tasks and using expanded data sources and analytics that allow for more detailed, complex, and insightful underwriting processes. This empowers underwriting professionals to further improve their skills and transition to more specialized roles. These new underwriting roles include risk detectives, who assess exposure probabilities for high-priority customers, and deal-makers, who partner with sales teams to negotiate specific terms to close sales.
To Modernize Its Policy Administration System
Insurance companies that adopt the greenfield approach to digitalization can effectively modernize their policy administration system (PAS). With a modern PAS solution, insurance carriers can immediately deploy new business processes and services with little disruption to their current operations. To achieve this level of efficiency, insurance carriers must implement software that streamlines support for a variety of business processes, such as policy processing, underwriting, billing, collections, and claims.
A modern PAS system removes the cost of maintaining multiple policy administration systems that are not consolidated. This allows insurance carriers to configure individual and group insurance products with a standard set of business rules, enabling easy management through a centralized insurance platform. Finally, a modern PAS solution can facilitate private and federal exchanges, which also enables insurance carriers to bring new products into the market faster.
To Innovate on Its Existing Business Model in the Changing Market
Traditional insurance carriers will find it more difficult to compete in today’s market if they do not innovate now. Relying on old business models that ignore today’s digital transformation will keep insurance providers from reaching more customers. And since many customers also prefer to report accidents and make insurance claims online, carriers are obliged to provide these services to their existing policyholders.
By adopting the greenfield approach, insurance carriers will be able to shift their focus on what today’s customers need. Instead of creating products that work around their outdated system, they can leverage new technology to develop products and services that allow them to accommodate customer requests more efficiently. At the moment, there are gaps in the market where insurance providers can seize the opportunity to provide services in more customer-oriented ways. Using the greenfield approach can help guide them toward new business innovations.
The insurance industry is changing faster than ever before. It requires even the most stable insurance companies to adapt to changes in this digitally connected world. Simply put, the inability to adapt to this connected new world would likely spell the end of companies who refuse to adjust to it.
