What Is Core Modernization In Insurance?

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Core modernization refers to replacing outdated Technologies with new ones that enhance innovation. To ensure a successful transition, companies should consider technology modernization solutions that streamline their IT infrastructure and enhance productivity, allowing them to stay competitive in today's digital landscape.
The current process depends on legacy systems, stringent codes, and outdated technology, which slows down innovation. The rigid applications in the Insurance industry create technical debt and prevent the implementation of new digital technologies.

As business demands rise, the existing systems cannot keep up. Data integration is not possible in the existing work processes, and companies can't process customer data quickly, which prevents them from adding new digital services. Core System Modernization is needed to enhance customer satisfaction and profitability.

Nowadays customers have high expectations from the insurance companies. To meet them, companies need to automate the quote generation, risk assessment, rate selection, and application process. With this companies can expect to reduce the operating costs, enhance productivity, quick processing, and online claims reporting.

Automation helps insurance companies create new digital products, which gives them an advantage in the highly competitive market.

Benefits of core modernization in insurance

Core modernization in insurance can leverage the power of Machine Learning and AI to support the claims process. This also helps properly assess the risks when it comes to processing claims settlements. With automation, processing new clients is more cost-efficient.

Customers can save time by having virtual assistants, which helps increase satisfaction. The new digital platforms provide better business value, allowing digital tools to create new services to cater to the market needs.

Cost efficiency

The modern solutions bring improved accuracy and automation which help reduce the costs. Customers will get better quotes and coverage.

Product innovation

The new applications make the policy changing and claims processing quicker. The user-friendly interfaces make the decision process smoother.

Enhance productivity

The containerized microservices and automated processes improve the business operations. This does not only improve the workflow, but also contributes to accurate pricing and faster rate selection.

Core Modernization in insurance: best practices

Core modernization is a significant move that requires a deep analysis of the current IT systems. The old technologies that don't support innovation should be minimized or completely abandoned. However, it is important to note that the process doesn't come with a one size fits all solution. Rather it consists of various steps that can vary between different businesses.

Even though the disruptions are inevitable, they can be minimized with identifying the areas that need improvement. In order to do so, companies need to identify three key areas.

Infrastructure

The process starts with identifying what kind of IT infrastructure is used in the working operations. Usually it would be API, hybrid cloud infrastructure, and Kubernetes-based containers.

Applications

The existing applications can be updated to work on container and cloud infrastructure. The application does not have to be changed, as shifting in a container or adding new layers can do the job. However, if a change is necessary the existing application architecture can be changed with a new one.

Approaches

Businesses can implement different approaches depending on their needs and the benefits they expect from core modernization. One of the approaches includes working with experts in this subject to create a roadmap and define the timeframes. Based on this, companies can decide how much they will update.

Final thoughts

Modern customers have high expectations when looking for services and products. Modernized software provides the needed digital tools to ensure a streamlined customer experience. Insurers should pay attention to the application process, claims reporting, and damage assessment and assess how automation can help.

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