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Why Now is the Time for Insurers to Innovate

Operational costs are still high, markets remain volatile and firms continue to tighten their belts. But despite the macro-economic pressures, it’s more critical than ever for insurers to invest in innovative insurance technology and drive digital transformation across their business.

Innovate for commercial gain

In an increasingly digital world, research indicates clear commercial benefits to continually modernizing insurance operations and underpinning them with the latest innovative insurtech.

According to AM Best, insurers with well-developed innovation initiatives grow their top line faster than those who lag in the innovation stakes. Over five years, the innovators saw net premiums increase by 11.9%, compared to just 7.9% for the laggards.

A study of the world’s 200 largest insurers by ACORD also showed that companies that embrace digitization significantly outperformed their industry peers, with an unequivocal correlation between digital maturity and better financial performance.

No wonder why, 83% of insurance companies believe innovation will have a positive impact on their business.

Budgets may be tight, but growth is at a premium. If there was ever a good time to innovate, it’s now.

Innovate from front to back

In the digital age, innovative technologies have given insurers new ways to interact with policyholders and provide a more personalized, customer-centric experience.

However, many insurers recognize that they can’t get the best from digital customer services without rethinking the systems, processes and insurance technology infrastructure that support them behind the scenes.

Innovative organizations are looking to transform every aspect of their operations, across the entire value chain – from customer-facing systems to financial management and payment processing tools.

The fact is that insurance companies can’t interact digitally with their policyholders unless they have the modern back-office systems to support digital payment channels. Many firms still run mainframe insurance technology that stops them from moving their business forward.

Today, there’s a growing need for insurers to update the treasury, finance and payments infrastructure that not only powers how they collect premiums and make claim payouts, but also helps them manage liquidity, banking relationships, investments and hedging.

Modernizing treasury and finance operations is less about working with the shiniest new tools and more about improving the bottom line with a clearer view of every cash flow, increased control over key processes, reduced payment costs and improved risk management and reporting capabilities.

By turning the treasury from a cost center to an integral part of their corporate strategy and making digital transformation part of their DNA, firms are in a stronger position to meet customer expectations and grow into new territories.

Innovate and be trusted

Innovation needs to go deeper for insurers. And at the same time, a strong foundation of back-office systems is critical to gaining customers’ trust.

To deliver always-on, global or regional services over a range of digital channels, your insurance firm needs cloud-based infrastructure you can count on 24/7 without disruption. In short, innovative technology must be reliable.

Back-office transformations that fully automate and seamlessly integrate highly complex workflows may not seem as exciting as the latest mobile app, but they can have a remarkable impact on your profit and loss. Above all, they show that reliability and innovation can and should go hand in hand, as one effectively enables the other.

With innovative digital tools from a well-established, financially stable technology provider, you will both stand out from the competition in the front office and provide confidence in your services from the back.

Plus, by digitizing and improving your critical operational processes, you will also become more efficient. That’s another win for the customer experience, which in turn will help you improve loyalty and retention, sell more products and achieve your firm’s strategic growth objectives.

To deliver always-on, global or regional services over a range of digital channels, your insurance firm needs cloud-based infrastructure you can count on 24/7 without disruption. In short, innovative technology must be reliable.

Innovate, whoever you are

As a modern insurer, it pays to make innovation part of your DNA – or to put it more accurately, your culture.

Not every insurance company is a natural born innovator. But every firm does have the potential to change its behavior and put innovation at the top of its strategic agenda.

With the right technology, the right partners and the right level of commitment from C-suite executives, you can embed a culture of innovation from the top to the bottom and the front to the back of your organization.

It’s always a good time for insurers to innovate and it’s never too late to start. Although the journey may take longer for some companies, it’s a path that’s open to everyone – with benefits all around.

Is your insurance firm ready for the ride?

Article by Matteo Carbone, founder and director of IoT Insurance Observatory; and Nick Dunn, Insurance vertical lead of FIS. Article published on www.fisglobal.com on September 25, 2023. FIS is business partner of the California and Nevada Credit Union Leagues. 

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