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I think we can all agree that technology, which is evolving at an ever increasing pace, has dramatically transformed the way financial services companies, including insurers, in many value add ways.
Just look at how the cycle time in auto insurance underwriting has been compressed from days to minutes, the auto damage estimating process has moved from hours to less than a half hour for most estimates. There are many more examples of how insurers are leveraging technology to deliver faster, smarter and more customer focused outputs.
While many of the examples of leveraging technology is the result of insurers and their vendor partners taking a specific process and developing new, technology enabled solutions, the place where insurers still struggle, a LOT, today is in delivering an efficient and effective technology overhaul when replacing an entire core system, say in claims or underwriting.
We have direct experience in several of these core system replacement initiatives. What we see, again and again, is well meaning people working very hard to fit their existing processes and develop the same outputs into the new system. This is the danger of using new technology in old ways.
Compounding this risk, most companies choose a core system, then bring in one of the big outside consulting companies to help develop the business requirements documentation (BRD) to code the system to the individual companies needs. While these intermediaries are great at taking what the current process SME’s articulate about the current process, they don't ask the hard questions about leveraging the technology to improve efficiency and effectiveness. They would have trouble even if asked, because they are not claims of underwriting experts. They have not done the job.
If you want to avoid using new technology in old ways, be sure to have people who have done the job asking hard questions, challenging current dogma and focusing on using new technology in new ways.
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