Are Robots Going to throw Your Legacy Insurance Software through a Brick and Mortar Wall?
Some interesting headlines in the news lately. For example, did you know that your next insurance agent will be a robot? Indeed, and according to CNET, that robot is about to hand you the pink slip. Apparently, robots have a thing about brick and mortar. They’re out to eradicate it. And it’s your address they’ve got in their GPS.
In all seriousness, the industry is changing, and fast. The change is being driven by technological innovation including, but not limited to, robots, and with insurers everywhere moving online, there are legitimate, open-ended questions floating around about what the business model will look like in the future.
But if there’s one thing that’s going to break your business, know this – it’s not a robot. It’s your legacy system.
Direct sales and the robot trend
The robot that CNET was talking about is the work of Snejina Zacharia, who’s the entrepreneur behind Insurify. Zacharia calls it an “expert virtual insurance agent,” or Evia, and Insurify has raised $2 million to fund its beta release.
Like other insurance aggregators, Evia’s job is to ask the customer a string of qualifying questions, search plans from many different insurers, and come back with the best-priced pick. It’s quicker and cheaper than an agent, which is why CNET said it’s going to take your job. The thing is, though, Evia’s purpose isn’t to provide coverage, but to connect customers with insurers, and vice versa.
Today, robots like Evia are part of a larger industry transformation: direct sales. There is a significant number of customers out there who prefer to do their own shopping, and aggregators are here to make that easy on them.
There are downsides to the aggregator trend. Some worry that they force insurers to compete on price alone. There are also significant advantages: aggregators expand the pool of leads that an insurer can compete for. They’re unbiased. As lead generators, they’re powerful tools.
For better or worse, they’re here to stay. According to the SEO specialist Daniel Faucett, aggregators have already “revolutionized the distribution of insurance products and services,” bringing “fundamental changes to the insurance industry.”
Result: insurers must compete online
We see a few takeaways in these trends.
- First, while brick and mortar may still serve a role for customers who prefer to shop online but buy in person, this much is clear: insurers must embrace direct sales and online aggregation if they’re to survive.
- Second, in order to do so, the legacy systems have got to go. There’s simply no way that insurers can effectively compete online while remaining shackled to a lumbering, limping software behemoth.
In short, insurers must transform. And in this case, change starts at the core. Today, a core administration suite is incomplete unless it provides fundamental core processing components while also supporting direct sales and mobile functionality.
“The modern insurance model isn’t going to allow for old paradigms to remain unchallenged,” said William Freitag at Insurance Thought Leadership. “The competition is becoming more agile, efficient and faster at every point of their operations.”
He poses this question: would we rather be enticed into the future by the promise of reward, or pushed there by forces outside of our control?
To learn more about the key considerations of modernizing your legacy system, download our free report, “Losing Your Legacy.”