10 Must-have Features in Modern Insurance Software Solutions

10 Must-have Features in Modern Insurance Software Solutions

From digital marketing to digital transformation and everything in between, customer satisfaction stands paramount in the modern digital era. However, if that’s the case, why do so many insurance companies rely on the legacy insurance systems to perform their core business processes? The truth is, although there is a general consensus for digital transformation across industries, but the insurance industry appears struggling to justify the need for upgrading or replacing their legacy insurance system to contemporary insurance software solutions. Here, legacy system refers to any software program derailing from current industry standards, but still in use due to its significance in day-to-day operations.

In today’s blog, we’ll address the shortcomings that are associated with these legacy insurance systems and what all measures should be taken for migrating to modern insurance software solutions.

Analyzing the Contrast between Legacy and Modern Insurance Platforms

When it comes to replacing an existing legacy system, “if it is working, don’t fix it”, is a common attitude among the insurers.  The potential risk associated with replacing an existing policy admin system at times outweighs the more advantageous aspects of migrating to a new one. This makes you think, what’s in these legacy insurance systems that make them such a critical asset, and which factors are responsible for creating a demand of an alternate modern insurance system.  Let’s understand, how both these systems reflect uniqueness through their process offerings-:

Legacy Insurance Systems Vs Modern Insurance Systems

Architectural Difference: In the context of legacy insurance business, making changes in the business requirements necessitate corresponding alternations to the technology as well, since both of them are tightly coupled in this architecture. This requires customization, which is again costly and may not fully support the emerging needs of the business. As a consequence of this, insurers get stuck in this loop of creating new legacy every time they may undergo any major technology upgrade.

However, opting for a more recent cloud-based architecture offers endless opportunities, in the form of software plying on cloud, to implement scalability in the delivery of insurance products. Moreover, its subscription model allows the insurers with the ability to pick the resources on-demand and get rid of the additional costs incurred in maintaining on-site data centers.

Underwriting Approach: Likewise, another key determiner can be identified through the approach adopted by legacy insurance systems which make them less efficient. If you see the underwriting mechanism within the legacy systems, they generally are fed on static risk models which collate the historic data and trends to predict the degree of risk. Given the inability of this model to adapt to new risk types, they are often considered as more prone to miscalculation in the premium pricing.

In other words, the scope of these systems are confined to only the internal factors which are controllable without taking into consideration other critical external data that could influence the decision. However, unlike its contemporary, modern day insurance systems come up with more advanced underwriting mechanism that relies on automation engines that transforms quotation to policies. AmityAssure is one such Insurance Software System in this league which harnesses underwriting engine for offering tailored premium pricing options to the end consumers. Now, as we’ve uncovered a few disadvantages of staying relevant to these legacy insurance systems, let’s take a sneak peek into some of the must-have attributes that modern insurance systems should possess.

Key features every modern-day Insurance System must have

  • Integration Capability: It is this very feature which makes modern day insurance software more prevalent in the present market context. It is essential for such systems to possess multiple endpoints that integrate with third party systems such as CRMs, payment gateways and other regulatory databases. It ensures communication of different stakeholders alike on same platform.
  • Workflow automation: Businesses thrive when their core processes are separated from most repetitive and routine tasks and which are then subjected to automation. Thus, insurance companies can tailor their workflows as per the operational needs of the processes and eliminate monotonous tasks from their focus, thereby bringing attention to the high valued tasks like customer engagement and operational efficacy.
  • Personalized Customer Experience: Modern-day insurance systems must be equipped with the ability to segment the target user base into distinguished customer personas, which allows for a more targeted way of product offering. This could be achieved through data analytics with a constant focus on offering personalized insurance solutions.
  • Robust Claim Management: Insurance frauds rank among the most frequent types of malpractices that occur worldwide, thereby not only draining insurance companies of resources but also affecting customers with unstable premium rates. This situation can be avoided with advanced claim management systems that rely on Blockchain technology.
  • Automated Underwriting: It is among the key insurance processes that are fed on raw data to propose the likelihood of any risk associated and the premium corresponding to that plan. Thus, by taking in use an automation engine insurers could employ external data as well to eliminate the risk of miscalculating premiums.
  • Reduced Time to Market-: Earlier, with legacy systems the rollout of product depended on going through key touchpoints including underwriting, claim to policy rollout wherein, each is tightly coupled causing loss of time to market. With advanced systems in place, time to launch a product gets reduced considerably.
  • Comprehensive Security-: The systems must also implement advanced security measures to prevent the integrity of the client and the insurer’s data. This could be achieved leveraging secure APIs and binding them with regular patches.
  • Adherence to Compliance regulation-: Compliance management is one of the key parameters that reflect the adherence of insurance software suites as per the industry-laid standards. They play a critical role when entering into a new market altogether.
  • Synchronized Accounting & Financing Tools-: The modern systems must also view both the pivotal tasks of accounting and financing through a bird eye’s view by harnessing predictive analytics to foretell the financial trends in the sector and make well-informed decisions. Thus, data analytics should be at the core of reporting insurance-related
  • Advanced Claim-Reconciliation System-: The magnitude of unprocessed and false claims is the result of a decentralized claim settlement and dispute identification process. This process could be further streamlined with an end-to-end centralized claim settlement portal that automates everything from the date of filing to the service execution stage.

Wrapping up

This brings us to the end of the blog! As industries are embracing change now more than ever before, it becomes equally unavoidable to sustain age-old practices. This issue could be addressed with a progressive solution in the insurance segment.  It further covers the potential threats that insurance software is exposed to with the usage of legacy insurance software systems. Lastly, it is summed up with the features that every modern insurance solution must possess.