Digital technologies present huge value to insurers and their customers. New systems can transform pricing, distribution, underwriting and claims processes.

They can provide easy access to rich data that enhances the customer experience through product personalisation, while eliminating clunky manual handling. 

If only adopting new technologies was as simple as the solutions they present. 

Technology updates remain a challenge across the insurance industry. A recent insurance industry trends report from financial services technology company Earnix shows that of the 298 insurance executives surveyed in Australia, the United States and Europe, 90 per cent don’t have full operation modernisation strategies and many depend too heavily on legacy and multiple third-party systems. This results in workflow bottlenecks, inefficiencies, errors and cumbersome workarounds.

Business services software platform MYOB has dubbed such challenges as ‘bad digitisation’. Its 2022 study shows Australian and New Zealand small to medium-sized businesses lose one day’s work a week due to a lack of software integration. 
Worse still, they are spending A$1.77 billion a year on unused software subscriptions. 

A challenging legacy

Simone Dossetor, CEO of Insurtech Australia, says many insurers are still weighed down by legacy systems. 

There are several reasons for this. “For example, when acquisitions occur — which is not uncommon in the insurance industry — a company also acquires a legacy technology platform,” Dossetor says. 

“Even if they’re using the same platform it might be a different version, so often they’re running multiple versions of multiple claims systems, which they may just patch together.”

Dossetor adds that some insurers also have a history of “long-running major transformation projects, which haven’t been successful”. 

“I think there is certainly a sense of caution around trying to go down that path again, and that’s why you also get so many businesses that want a particular capability and just go out and buy another subscription, or do something separately, rather than taking an integrated approach.”

Dale Smith, co-chair of InsurTechNZ and CEO and founder of insurtech company JAVLN, says another challenge is that insurers in countries like Australia and New Zealand have been “largely under-serviced” when it comes to technology.

“There are big international software vendors who have under-invested and not innovated well enough to keep the industry up to where it should be from a technology perspective,” he says.

“I’m seeing some technology from the 1990s still being used. Technology from that era is hard to integrate and hard to innovate on top of.”

Premium

You need to login to access this

Login

What are CIP Points? About ANZIIF Membership