Enhancing Flexibility in the Insurance Industry
Warsaw, December 4, 2017: Sollers Consulting welcomes more than 250 guests from 12 countries to the sixth edition of Innovation in Insurance hosted in Warsaw, Poland.
The new digital age creates challenges for insurers; many of which are struggling to find the right answers. One thing is clear; part of the answer must involve modernising their IT architectures. During the international conference “Innovation in Insurance” in Warsaw more than 250 insurance professionals from twelve countries discussed what will be the decisive business factors surrounding modernisation. Conclusions were supported by the practical experience of projects at Allianz (UK), AXA (Poland), Basler (Germany), Element (Germany), Nationale Nederlanden (Poland) and Prudential (Poland).
“Companies are struggling to overcome outdated business structures and legacy IT,” said Michał Trochimczuk, Managing Partner at Sollers Consulting, in his keynote speech. “Insurers operating in silos will not possess the necessary abilities to compete in a modern economy,” he pointed out. Insurtechs have challenged insurance companies that are stuck in inflexible and non-user friendly business structures. However, only a few of those start-ups will survive. “Insurtechs will not completely push out traditional insurers, but they can and will be better at specific areas of the value chain,” Trochimczuk said. Insurance companies can profit from the inventiveness and agility of Insurtechs but must continue to enhance the momentum of their own transformation. Trochimczuk summarises: “We believe that flexibility and the possibility to embed external partners into insurers’ ecosystem is key to their future success.”
Achieving those enhanced capabilities will be a challenge, as insurance companies spend 65% of their IT budget on keeping their business running, whereas only 15% of expenditures are allocated to transformation – statistics quoted by Grzegorz Podleśny, Partner at Sollers Consulting. “Core systems maintenance and upgrade consumes the largest part of insurers’ tech expenditures budget,” he said. Cost efficiency and operational flexibility are the main factors when insurance companies choose a new core system, but it is crucial to consider the selection in a holistic way, taking into account the whole system life cycle. “Sollers created an internal model used to evaluate core insurance systems. It is based on three main categories: coverage of functional gaps, IT architecture and cooperation with potential vendors.” Sollers’ approach to vendor choice is more detailed than the rankings of market research companies. “We consider a higher number of categories in our quantitative scores and we emphasise flexibility and integrability, which are crucial for business operations in this new era,” Podleśny pointed out today.
This theme was expanded on even further during a discussion panel led by Marcin Pluta, Managing Partner of Sollers Consulting. Christian Kromann (TIA Technology), John Macdonald, (Fadata), and Keith Stonell (Guidewire) discussed how their solutions support the transformation and innovativeness of insurers. The participants stressed during the panel discussion how important core system modernisation is and showed how insurance companies can mitigate implementation risk. They discussed the impact of Software as a Service on different insurance markets and focussed on the functionalities insurance companies need to acquire to respond to the new digital age.
High ranking representatives of six insurance companies gave insights into their ongoing projects, improving their back-end in order to profit from new technological possibilities. Evandro Manolas and Adam Rates from Allianz UK reported about the operational preparation for the new joint venture with LV=. Wolfgang Pander and Carsten Kobbe-Dunker from Basler Germany explained how the German insurance company is transforming its motor insurance business. Piotr Kucharski of AXA Poland gave details about the combination of TIA Policy System and Guidewire ClaimCenter module. Anna Messerli, CFO at Prudential Poland discussed the importance of pre-sales processes and applications for good customer experience with insurance companies. Michał Hucał of Nationale-Nederlanden reported about the integration of RIFE – Responsive Integrable Front End and TIA Policy Admin. RIFE is an extremely flexible front-end solution for insurers who want to act more quickly on their markets. Dr. Wolff Graulich of the Element gave insight into the high modularity of the business model of the German Insurtech startup.
“We at Sollers Consulting bring business and technology together,” summarizes Michał Trochimczuk, Managing Partner of Sollers Consulting. Modernising IT should always be an integral part of business transformation. “Insurance companies would miss a huge opportunity if they were only recreating the old business world, just with new software,” Trochimczuk said.