As media headlines focus on AI transformation, many insurers face a more fundamental challenge: upgrading the complex legacy systems they still depend on for core processes.
Research has found that three-quarters (74%) of insurance companies still rely on legacy technology for critical functions, such as pricing, rating, and underwriting. The truth is that, while the benefits of digital transformation are widely known, for many, the challenge of upgrading seems greater than the risk of keeping things as they are.
As large, complex organisations with entrenched ways of working, insurers must not only face a substantial infrastructure overhaul but also a cultural transformation to upgrade their insurance software. Introducing new systems means individuals and teams across the business must evolve how they work, and that can be a huge barrier to change.
But while getting teams on board and creating change isn’t easy, it can be done. It just takes the right approach. Here are the key factors to managing the process, from conception, right through to launch:
Clear leadership
Bringing diverse stakeholders together behind a shared goal must be driven from the top, with a clear vision and strategy. Lack of leadership clarity trickles down the rest of the organisation and, where day-to-day roles are affected, can quickly lead to dissatisfaction, disengagement, and in-fighting.
To avoid this, the whole decision-making process, from developing a business case to setting KPIs, choosing a provider, and developing workflows, must have C-level oversight. Business leaders should be prepared to face a diversity of views and attitudes; there will be those who are very open and excited, and others who are sceptical, particularly regarding the impact on their role.
Communication is key to gaining trust and ensuring all team members understand the end goal, focusing on the benefits for their productivity, and the value they can bring to the business.
Developing a strong business case, with clear objectives
A successful software implementation starts with a strong business case outlining exactly what digital transformation will achieve.
Modernisation for its own sake isn’t enough; insurers need clear goals, whether that’s improved customer experience, reduced manual processes, more streamlined partnerships, better data visibility, or a combination of all these. This should also be broken down into what success will look like for teams across the business, so that those affected can see what it means for them.
Key stakeholders must be clear on the rationale for the change and given the chance to provide feedback on the proposal before the search for a new partner begins. A clear business case also aids the search process, ensuring the chosen platform is designed around the true business needs, rather than simply mapping the old system onto new technology (along with all its problems).
It is also important to be clear about how success will be measured and understand the baseline before implementing a solution. For instance, if the goal is to improve customer experience, the business must decide how to quantitatively assess the current experience, then determine the end goal, and the projected ROI. A good software partner can help with this, including providing concrete data on the expected cost and time savings.
A dedicated steering committee
Once leadership has made the case, a dedicated steering committee should be charged with taking this forward, representing all those involved in decision-making and using the software, including subject experts for key aspects of the system.
They should lead on fleshing out the requirements, assessing options, and shortlisting partners, ensuring buy-in from across the business about the objectives, criteria, and what the final system will look like – avoiding any nasty surprises later.
While leadership vision and oversight are crucial, final decision-making authority should be delegated to individual business leads. This avoids unnecessary delays – unless any specific issues require leadership attention.
Choose your partner carefully
Insurance teams are more likely to embrace a system when their software partner understands what they do, the challenges they face, and what they need. While generic software can be tailored to insurers, it requires a higher degree of customisation, which invariably takes longer and is more resource-intensive for internal teams. Plus, the result is less likely to achieve what is required.
The best solutions are designed specifically for insurance businesses by those who have worked in the industry, while remaining configurable to individual business needs. Having insurance expertise and insight on hand is invaluable for gaining the confidence of all concerned, ensuring questions are answered, and problems solved, as quickly as possible. The result is faster transition, onboarding, and impact following launch.
The building blocks for growth
In a highly competitive and saturated market, flexible and scalable software is vital for insurers to retain and win market share. From building new partnerships to responding to new product trends or introducing AI, the technology foundations make everything else possible.
Cultural change is always hard, but with the right leadership and stakeholder engagement, frontline employees can become the biggest supporters of a new approach, rather than a problem to solve. Combine that with the right software partner, and updating legacy systems is no longer a risk, but a guaranteed route to success.
