From legacy to innovation

A seamless, user-friendly customer experience is your North Star on the digital transformation journey. Choose the right strategy and build your roadmap to success.

In brief

• Insurers must fully evolve their legacy technology to successfully resonate with and effectively meet the needs of the next generation of consumers.
• Complicated and heavily regulated insurance processes and the pervasiveness of pen and paper forms threaten successful digital transformation.
• Whether insurers adopt a greenfield approach, an API digital wrapper or a full-system digital transformation, a legacy migration plan must be created to minimize friction through the transition process.

A young beneficiary calls an insurer to file a notice of loss. After being redirected multiple times, they finally reach a customer service representative (CSR) who takes on their case. Only, that CSR is unable to access the deceased’s policy data, restricting their ability to file the first notice of loss. The beneficiary is informed their parent’s policy data is currently unavailable, offering them no explanation as to why; instead, the beneficiary is directed to another department that may have access to the older platform and the policy record. The CSR is sure the information is there somewhere… it’s just a matter of retrieving it.

This scenario is becoming increasingly common as we approach the greatest wealth transfer we have ever seen.

An astounding 40% of today’s life insurance assets are poised to change hands to their designated beneficiaries by 2040.

The bigger challenge, though, is that when it does happen, the next generation of consumers is going to expect both convenient and seamless digital experiences when choosing top notch life and annuity products that will serve them in their lifetime, not just in their death.

And insurers will have to evolve — both their foundational technology and their product infrastructure — to successfully resonate with and effectively meet the needs of this growing customer base.

That’s easier said than done. Here’s why:

• The next generation has different expectations for life insurance and annuities. As a result, life insurance and annuities products must evolve to meet their needs as they come of age.

• The life insurance industry is complicated, heavily regulated and easily misunderstood by consumers. The red tape can make it difficult to distill complex language into clear, simple, user-friendly consumer experiences.

• It can be intimidating for a carrier to forego their perceived control of pen and paper forms in favor of a digital entry option. But by digitizing systems and processes, the insurer maintains control over the data and can vastly improve convenience and ease of use for customers, policyholders and beneficiaries as a result.

Legacy systems weren’t designed for seamless customer experiences, so when organizations layer new solutions on top, the ecosystem becomes even more complex and inflexible. Inordinate amounts of time, resources, talent, energy and money are sunk into legacy systems, paralyzing the industry from modernizing.

Insurers must commit to a customer-centric business model, make a digital start and utilize cost-effective, low-code tools that boost the customer experience and compel younger audiences to become their next customers. Now is the time to wipe the technological slate clean and rid our processes of the legacy system shackles holding us back from providing best-in-class customer experiences. 

Set the customer experience as your North Star. Whatever roadblocks you encounter, keep the customer experience as your guiding light to stay the course toward a thriving digital future.  

3 routes to digital transformation

The first step in reducing constraints in your organization’s digital transformation process is to put a legacy transformation plan in place. Your plan should solve the efficiency, technical debt, complexity and sunken resource issues your legacy system is causing within your organization.

When striving for seamless digital transformation, life insurance carriers must keep two customers in mind: the internal customer, consisting of your claim’s reps, CSRs, agents and underwriters, and your external customers, or your insureds and their beneficiaries.

The question is: What’s the best way for your organization to navigate the quest for full-system digital transformation? Here are three approaches to consider, from making a fresh start to getting immediate relief to transitioning one application at a time.