Going digital is broadly accepted as the way forward for life insurance companies; just look at what Manulife and Sun Life Financial have done this year. But based on a new poll of industry leaders attending the LIMRA 2018 event in New York, it may not be so easy for many companies.
According to Unqork, a US-based software provider for insurance and financial-services companies, 49% of senior executives from the largest insurers view integration with legacy systems as their biggest technology pain point. It was the breakaway leader ahead of speed to market (21%) and misalignment between business requirements and IT delivery (20%).
Despite those challenges, 58% of insurers anticipate that digitization will be the key innovation to drive their businesses going forward. The digitization outlook bested other trends such as big data (44%), artificial intelligence (40%), robotic process automation (25%), and blockchain (6%).
“This survey qualitatively confirms … that insurers perceive legacy systems as a hurdle to growth and despite the disruptive power of innovations such as AI and blockchain, they are far away from leveraging their potential,” said Unqork CEO and founder Gary Hoberman. “However, pointing to legacy technologies as a barrier is a myth, based mostly on the fear of accepting sunk costs.”
Focusing on the different areas that could be impacted by digitization, 67% of respondents saw its biggest potential in client onboarding, while 36% saw it in product development. Another 32% cited claims, and 22% looked to risk management.
Eight in 10 insurers expressed confidence that digitizing and following a paperless onboarding system will help their company, particularly as 43% of respondents report having errors or missing information in at least half of the applications they receive. Furthermore, only 40% of insurers polled felt that their current technology spending was leading to significant improvements like increased sales or lower costs.
“Insurers can still progress by refocusing on their competitive advantage – whether that is product design, underwriting, risk management or claims servicing – and grow their business,” Hoberman said.
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