6 Characteristics of an Insurance Digital Enterprise
Nathan Golia also contributed to this report.
Modernization is afoot in the insurance industry. Fifty-percent of insurance carrier respondents to a recent Celent study, on both sides of the Atlantic, said that they are well into their legacy modernization programs, and another 25 percent said that they are in the early stages. Furthermore, about two thirds of those initiatives are system replacement rather than extension efforts, according to researcher Catherine Stagg-Macey. So where is all this going?
Some observers have begun to talk in terms of the evolution from legacy capabilities to a paradigm called the insurance digital enterprise. What does that mean? Recently Vinod Kachroo, global head industry domain consulting & CTO for Tata Consultancy Services Insurance & Healthcare practice offered a definition.
Historically, insurers have invested a great deal in systems of record, but to compete in today's world they must shift their focus to systems of engagement, according to Kachroo. The insurance industry has tended to attempt merely to extend current capabilities when what they need to do is develop capabilities that enable new business models.
The significance of the shift is hard to overestimate. In the last decade or so, insurance technology has gone from being a utility to being an engine for efficiency, flexibility and customer contact. Within the digital insurance enterprise, technology will be the source of new business models.
1. From Systems of Record to Systems of Engagement
Recently Vinod Kachroo, global head industry domain consulting & CTO for Tata Consultancy Services Insurance & Healthcare practice offered a definition:
The journey to being a digital insurance enterprise involves building "systems of engagement," focused on effectiveness, on top of existing enterprise "systems of record," focused on efficiency. It will require further simplification and enhancements to the current industry technology platforms to things like straight-through processing and movement of the industry from manual and paper-based world to digitized processes."