Integrating new technologies into holistic insurance solutions

Advances in technology have meant applications are more open and can talk more easily to one another.

This gives CIOs the ability to pick and choose the applications that make the most sense for their organization, and to integrate them into an end-to-end landscape. The approach eliminates the one-size-fits-all mentality of the past and makes for a new, more personalized approach to technology implementation.

For example, in insurance:

The claims operations department can pick the application that best suits their needs while the policy department and underwriters choose other applications that better fit their needs.

This is a huge shift from 10 years ago when this flexibility was not possible, and a company would purchase one, all-encompassing solution.

IT now has the power to put together the best breed of business applications, instead of choosing a single application that only performs well in certain areas.

Let’s take a closer look at the possibilities integrability and interoperability provide, along with some of the challenges to consider.

Making the new level of flexibility work in your favor

The flexibility to pick and choose business applications comes with a few of its own key considerations in order to ensure the company’s technology provides a seamless workflow across the business.

  • First, it’s important to understand that interoperability and integration do not stop at a technical level. Getting two applications to work together is only half of what is required. The more important piece to the puzzle is integrating how the data is held, processed and produced within each of the applications. And then understanding how that data gets reused and passed across other applications within the overall integrated landscape. Understanding how data is being used across a business’ systems is key to getting the most value out of your business applications and making an integrated approach worthwhile.
  • Businesses need to ensure consistency to ensure success. This includes consistency in terms of how data is handled and processed. For example, a business might be using separate apps for currency conversions. However, if both applications are not rounding monetary values the same way, you may end up with inconsistencies which will create confusion, worry, additional work and lack of confidence in the system – eliminating any benefit the application may have held. To avoid this, companies need to thoroughly address how data is processed in a system before integrating them across a business.
  • Finally, companies often overlook the cost of integration. The idea of purchasing apps that best serve each particular business unit is great in theory — until you think about the cost of integrating those apps to produce a seamless architecture. The cost and complexity of an integration process are often overlooked, causing companies to struggle to provide the all-in-one system they were envisioning. Companies must carefully evaluate not only the ROI of a new system, but the ROI on an integration process – only where it makes sense from a financial and workflow standpoint should they proceed with this approach.

When separate makes sense

Once you understand the benefits and challenges, of using different applications in conjunction with one another, it’s time to ask yourself – What is the right number of discreet apps for your business? Should you be looking at completely separate components or is a more end-to-end approach acceptable? Is it more beneficial to employ a second application or would extending a current one be suitable?

For a general rule of thumb, smaller organizations should try to minimize the number of applications their business is using, while larger organizations have the scale to see the return on investment of more apps.

For some time, we have seen a trend of companies to separating their claims applications from policy administration ones. This is because traditional ERP systems were historically weak in the claims area, so users sought a better option. The cost-benefit analysis of a new claims application is also tangible and easy to demonstrate: hence a great business case.

More recently, underwriting applications are becoming the focus. The underwriting process is becoming more scientific as underwriters apply more rigor and discipline to the data sources and analytics they use in their decision-making process.

The tools and applications that help enable this are very specialized and would not typically come bundled in the policy administration apps the company is currently using. Therefore the underwriting community is turning to separate applications to help run the pre-bind segment of the business process.

Prepare for further integration

Challenges such as rising costs, soft market conditions, changing regulations, outdated technology and increased merger and acquisition activity are all pushing P&C insurers and reinsurers to look to more efficient and integratable solutions.

Interoperability will continue to take center-stage as insurers look to do more with their lines of business and new applications are able to provide greater insights. Insurers need to think of each system as a puzzle – each piece they bring in to their business must not only fit cohesively with the others involved but contribute to the overall picture for what the business is looking to achieve.

The key to success in integrating different insurance technology platforms means looking at the bigger picture and not overly getting caught up in each of the individual pieces.

richard-clark CSC BlogsRichard Clark is the Head of Business Development for Xuber, a DXC company. Richard has been a key player in our insurance software business since 1997. Connect with him on Twitter.



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