The cost of upgrading or even making a minor change to an existing legacy program can be daunting for many insurers. (Photo: Shutterstock)
Many insurers are faced with lengthy, costly development cycles to release new or modified products and pricing due to the limitations of legacy systems. Case in point: An insurer I talked to recently wanted to eliminate a single underwriting question from one of their products. Their estimated cost to update their screens, forms and policy administration system (PAS) was $1 million, and they were told the project would take three months.
Related: This insurance agency sees benefits in its legacy technology
Scenarios like this make many insurers that are still using legacy systems feel pressured to simplify their products and pricing. Unfortunately, we see some carriers mistaking simplicity for uniformity, offering oversimplified one-size-fits-all products that run contrary to customers' expectations of tailored solutions for their unique needs. Instead, to achieve speed, agility and low costs, I recommend a process I like to call "Sophisticated Simplification" to drive faster and smarter product innovation.
Related: Claims processing in the 21st century
It's not complicated
Sophisticated simplification means giving users the ability to select fit-for-purpose solutions in an intuitive manner, from a sophisticated product portfolio built with a modern core systems platform. The right product portfolio and architecture allows maximum re-use of minimal components with varying granularity, thanks to single-point-of-change attribute inheritance. What this means is that each product feature is specified only once and then propagated throughout all applicable products in a carrier's portfolio.
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