# It is time insurers act smart, by making legacy systems a thing of the past
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-10-27
Category: INSURANCE
Category URL: https://financedigest.com/category/insurance
Meta Title: COVID-19: Lessons Learned for Insurance Providers
Meta Description: Discover how insurance companies can navigate the impact of the pandemic by prioritising automation, updating digital channels, and building a tech-savvy
URL: https://financedigest.com/it-is-time-insurers-act-smart-by-making-legacy-systems-a-thing-of-the-pasthtml

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_By **Vijayamohan Keshav,** Senior Principal Business Consultant, Expleo_

Insurance providers have found themselves at the forefront of the COVID-19 pandemic, as anxious customers seek to take shelter from the economic crisis. At the same time, they’ve had to contend with the hugely complex challenge of adapting to remote working. The immense level of strain means that, unfortunately, [some customers have experienced problems](https://www.financedigest.com/australias-qantas-apologises-to-customers-for-operational-problems.html "Australia’s Qantas apologises to customers for operational problems") with delays, or waylaid claims. But whilst the level of disruption we’ve seen at the hands of the coronavirus is unprecedented, a quick look at the history of the sector raises the question as to whether it could have been better prepared.

Crucially, the SARS pandemic of the early 2000s, should have been a wakeup call to all [businesses about the importance](https://www.financedigest.com/software-to-display-your-businesss-important-information.html "Software to Display Your Business’s Important Information") of agility. After this event, insurance companies should have taken steps to future-proof themselves, as they did [their claims](https://secure-web.cisco.com/1IIelmniE56VSw4aM6oN6InD6NUbDMa4Y9NSHCmLmWql2ejckfnV1mA7YRPzejzJFiB9cp_0-AUDW-oCTDxVIaTq0Ge2l9nkxaSCu8_9GUURw3kuZVDdhsP2LivO4PnRSMZg-rmLva_CtRJUemkTv1PNUEMH7U2NNGuBRg5LlU3eLsHeO81nyq7VUIS5wSsFXUuUfaUT8h6Az57FJzT2kIzbOGa200sLgkeIciPlhIIRUnuGZKQcT5K5qO4K-d3AzEaClgBi0Gx8YR-fEpsZKHJXK0bbCdL8Iqa6fpuifeYtehDYk2xq0Gj1qJCwITRbxz2OYo_PjbhQopAEQj7gXR_yfHg2JGBVQVeTrvZ1jJNewUfdacL2vQSGrLvOV4uYj_OJ4n2hEM-NN-GC_QnZhnf62s6CEhfXcGSCBzoOOMnNEbVcF7T4kpDgYvpi791hHq-DZHoTvdGzQfSBWBSC0GdVf0jA5MV3B4g1uxjbblTg/https%3A%2F%2Fwww.cnbc.com%2F2020%2F04%2F20%2Finsurers-are-denying-coronavirus-claims-restaurants-are-fighting-back.html), by automating vital processes, updating their digital channels, and building a digitally savvy workforce.

Instead, [concerns around](https://www.financedigest.com/oil-prices-hover-around-2014-highs-supported-by-supply-concerns.html "Oil prices hover around 2014 highs, supported by supply concerns") time, costs and potentially just a general underestimation of upcoming challenges, meant many took a slow and steady approach to digitisation. So, when the coronavirus hit, [up to 70% of providers](https://secure-web.cisco.com/1dhVp3RzfucP4X9kRIO_L2gk0isZ0S3qVJ0Jv4dHOFNkQQZpljAqQQMLkQ5p6gDtUiXx6LmIC_nJAlyRmaW5S5kEMXj8E1S7OnphBUYn5mwg98chxppzlLdkNhSH9nxNAtlVz3IkUw66cISS5tvvBLQbqF7tbjOWfuLCvCh2xoS5RXvEWfNMpvBimWH19s3mtbsRHljVNfhtxxVdLRTWM6zRDXc3wzfgF5lUKsjpwhF84pEwi5rKP_4U6_qbRrSwIc6flveoNnc3nPPBJEDvow1AZuGcu2mlQ8haDd8yEmY7pMywzqQFhFABrQVqt-oFrgW399W4KrcQdPPDAHqrqH-xn2GrRl3lxClb7kcE0yTS1P9JalaGZl4PaAE2h9Jcg-I4t9a_hdSiD_lRl4G36_6vsEDr5hMXnDBhRui65iPCbPKH8jvNbRx-TRfm8RGB6WcpiuPSVSkDp3AOxZHEYzg/https%3A%2F%2Fwww.computerweekly.com%2Fnews%2F450402096%2FInsurers-face-same-legacy-system-battle-as-retail-banks) were still relying primarily on legacy applications – applications that just weren’t prepared to deal with the unprecedented wave of activity associated with a pandemic.

[Post this pandemic](https://www.financedigest.com/marketing-communications-is-a-business-critical-pillar-now-and-in-a-post-pandemic-future.html "Marketing Communications is a business-critical pillar now – and in a post pandemic future"), insurance providers must put the lessons they learn into action and put automation at the heart of their operations. Here’s how [technology will help bring the industry](https://www.financedigest.com/advertys-multi-patented-and-industry-leading-in-game-viewability-technology-brainimpression-now-available-within-oracle-moat.html "Adverty’s Multi-patented and Industry-leading In-game Viewability Technology BrainImpression™ Now Available Within Oracle Moat") back on its feet.

**Focus on what counts**

Whilst costs will inevitably need to be cut over the [next few years](https://www.financedigest.com/suedzucker-expects-to-raise-its-sugar-prices-again-next-year.html "Suedzucker expects to raise its sugar prices again next year") to make room for more capital, COVID-19 has focused the industry’s attention on what matters when it comes to digital innovation. Far from hindering technological progress, we can [expect more investment](https://www.financedigest.com/global-lycopene-market-outlook-business-challenges-investment-opportunities-progression-status-revenue-expectation-and-forecast-2022-2029.html "Global Lycopene Market Outlook Business Challenges, Investment Opportunities, Progression Status, Revenue Expectation and Forecast 2022-2029"), with companies focusing their resources on priority areas

Blockchain, for instance, is likely to take a backseat in the list of immediate priorities, but [automating production processes](https://www.financedigest.com/what-businesses-can-achieve-with-microsofts-full-suite-of-process-automation-tools.html "What businesses can achieve with Microsoft’s full suite of process automation tools") – whether that be underwriting, claims or complaints – is a no-brainer. There have been far too many delays and [mistakes made](https://www.financedigest.com/tripling-the-size-of-my-business-in-the-pandemic-the-mistakes-made-and-lessons-learned.html "Tripling the Size of my Business in the Pandemic — The Mistakes Made and Lessons Learned") in recent weeks for this not to become a sector standard. We can expect investments in AI and [machine learning to be primarily in the areas of Intelligent](https://www.financedigest.com/transforming-insurance-through-artificial-intelligence-and-machine-learning.html "Transforming Insurance Through Artificial Intelligence and Machine Learning") Process Automation

Implementing more robust security measures, meanwhile, is paramount. This has been low on the priority list for investment so far, but with hackers on high alert and [remote working](https://www.financedigest.com/digital-insurance-and-the-remote-working-and-studying-boom.html "Digital insurance and the remote working and studying boom") becoming the norm rather than the exception, every provider needs to make sure its infrastructure is infallible. For an industry centred around processing money and data – particularly [personal data](https://www.financedigest.com/data-privacy-and-navigation-how-our-personal-data-is-used-in-navigation-apps.html "Data Privacy and Navigation: How our personal data is used in Navigation Apps.") – there can be disastrous repercussions if there is a failure to implement cutting-edge security at the enterprise level.

**[Earn back](https://www.financedigest.com/thomson-reuters-lifts-sales-outlook-on-back-of-earnings-beat.html "Thomson Reuters lifts sales outlook on back of earnings beat") trust through innovation**

**Insurance providers are built upon security, trust and their ability to deliver upon that trust at critical times of need. But as demand for pay-outs set to sky-rocket, and public trust potentially wanes, the performance and customer usability elements of [insurance businesses will come](https://www.financedigest.com/are-you-getting-what-you-are-paying-for-when-it-comes-to-cyber-liability-insurance.html "ARE YOU GETTING WHAT YOU ARE PAYING FOR WHEN IT COMES TO CYBER LIABILITY INSURANCE?") under more pressure than ever.**

 **These usability elements include enhancing the [customer experience](https://www.financedigest.com/solving-the-customer-experience-conundrum-how-fs-organisations-can-use-data-to-level-up.html "Solving the customer experience conundrum: How FS organisations can use data to level up") when using digital channels, making claims processes clearer, or providing additional customer service channels through more contemporary routes, like social media – all of which can be enabled by technology.**

**However, introducing any changes or new services must be underpinned by testing processes that ensure quality of service, and safeguard against technical failures. At a time of great pressure, even small errors, can shatter [consumer confidence and business](https://www.financedigest.com/is-spring-really-in-the-air-heightened-consumer-confidence-may-not-be-enough-this-season-for-small-businesses.html "Is Spring Really in the Air? Heightened Consumer Confidence May Not Be Enough This Season for Small Businesses") reputation. The critical [need for quality covers both back and front-end processes and the clearest path to delivering this is through a quality assurance process that primarily uses automation tools to save insurers](https://www.financedigest.com/breaking-down-the-types-of-insurance-you-need.html "Breaking Down the Types of Insurance You Need") critical time and money whilst dramatically minimising risk.**

**We’ll not be the first to point out that the demands on customer-facing and performance elements of [insurance business](https://www.financedigest.com/business-insurance-what-does-it-cover.html "Business Insurance: What does it cover?") were severely underestimated before the pandemic, meaning many providers have struggled to handle high claims numbers. [Insurers](https://www.financedigest.com/different-countries-different-insurance-cultures-how-insurers-can-adapt-their-products.html "Insurers") must remember the pressures customers face and innovate quickly to deliver a better quality of service – all of which will be underpinned by some element of digital transformation.**

![Vijayamohan Keshav](https://mail.google.com/mail/u/3?ui=2&ik=ba50f8bc63&attid=0.1&permmsgid=msg-f:1681170549757336082&th=1754b7b531225a12&view=fimg&sz=s0-l75-ft&attbid=ANGjdJ9WDfl0U2mW_twBdTV3bJbLU5Y-C_egpsAlLLux8Cujzwwv5GzpfjbT94bIzdi7G3WbAXvwy-3fSRCbKuVsDfLQjrY6zVKptFnbu-jwqW2r76ICt9kcRph8xqA&disp=emb)

Vijayamohan Keshav

**Transformation, consolidation, and regulation**

As part of the industry-wide digital transformation process and potentially as a result of the coronavirus crisis, we can expect a higher rate of mergers and acquisitions over the coming years. [Insurers of all shapes and sizes will look to digitally](https://www.financedigest.com/insurers-beware-fraudsters-love-digital.html "INSURERS BEWARE: FRAUDSTERS LOVE DIGITAL!") native firms, or insurtechs to help them grow, scale up or simply survive.

We’ll also see a similar chain of events occur amongst the insurtech community too, with bigger players acquiring smaller players and [key](https://www.financedigest.com/aluminum-cans-market-tremendous-growth-opportunity-trends-with-key-players.html "Aluminum Cans Market Tremendous Growth, Opportunity, Trends With Key Players") technologies and approaches coming to the fore. Our money is that automation will be the first and most powerful [technology to help insurers](https://www.financedigest.com/how-the-global-insurance-market-will-keep-pace-with-evolving-risks-through-data-analytics-and-technology.html "How the global insurance market will keep pace with evolving risks, through data, analytics and technology") on this journey.

Whether you consider the need for innovation in reaction to COVID-19, or in terms of market competition and disruption, there are few upsides to be found for [insurers sticking to legacy systems and ways](https://www.financedigest.com/predictive-analytics-a-new-way-of-insuring-success.html "Predictive analytics: a new way of insuring success") of serving customers.

Positively, the [sector is highly likely to benefit from relaxed regulations around technology allowing insurers](https://www.financedigest.com/whats-driving-consumer-opinion-in-the-insurance-sector.html "What’s driving consumer opinion in the Insurance Sector?") and technology brands alike more room for innovation, which can only be a good thing – as long as it is underpinned by security, testing and process reliability.

**More change to come**

With entire economies crippled by the virus, for the first time in many years, the [insurance industry](https://www.financedigest.com/nine-predictions-for-the-insurance-industry-in-2022.html "Nine predictions for the insurance industry in 2022") has had to be proactive in adapting to change. And while it may have been borne out of necessity, we should see this change in pace as an opportunity for the [sector to make some much-needed improvements as long as it never takes its eye off security](https://www.financedigest.com/what-does-good-look-like-for-legal-sector-it-security.html "What does ‘good’ look like for legal sector IT security?"), performance and the quality of delivery.

The [road ahead](https://www.financedigest.com/the-road-ahead-what-does-2022-hold-for-the-automotive-supply-chain.html "The Road Ahead: What Does 2022 Hold for the Automotive Supply Chain?") will not be easy – especially with the adjustment to remote working, and accompanying challenges around security and productivity. But if insurance providers can make sure to address and update these [crucial aspects of their businesses](https://www.financedigest.com/asset-management-it-solution-market-asset-management-grow-crucial-for-various-organizations-to-evaluate-entire-business.html "Asset Management IT Solution Market – Asset Management Grow Crucial for Various Organizations to Evaluate Entire Business"), and embrace an automation-first mindset, they have a good chance of emerging stronger.


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