Insurance Carriers Turning to Platform Providers for Competitive Advantage

Insurance companies are looking to technology platform partners to improve customer experience, update legacy systems and move to the cloud, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2021 ISG Provider Lens Insurance BPO Platforms Report for the U.S. finds insurers seeking help from technology providers to deal with several challenges, including growth, cost optimization and improved efficiency.

For many insurance companies, legacy technologies are hindering their ability to innovate and to respond to changing market conditions, the report adds.

“Older systems prevent carriers from getting a comprehensive view of their customers that’s needed to offer tailored products,” said insurance specialist Dennis Winkler, senior director, business services, for ISG Americas and a co-author of the report. “Insurers should empower their agents and brokers with sophisticated tools and technologies they need to do their jobs effectively.”

To deal with legacy technologies, some insurance carriers have extended the capabilities of old systems, creating even more complex environments that put them further behind, the report says. As a result, some carriers are considering modern policy administration platforms with cloud or hybrid options.

The report also sees insurance carriers embracing the cloud, which allows them to collaborate within a rich ecosystem of partners and insurtechs and gives them the ability to test and deploy new technologies quickly and easily. Cloud technology can accelerate business growth, enable quick scaling and reduce operating costs.

Insurance platform providers are also taking steps to help insurers cut costs, gain efficiencies, increase productivity and get products to market faster, the report says. In many cases, platform technology providers are automating processes across the platform, leading to reduced costs, increased reliability and improved customer service. Platform providers also are helping insurers meet a long-standing goal of automating processes by deploying technologies such as artificial intelligence and machine learning.

Many platform providers are also offering analytics solutions to insurance carriers, the report says. Insurance companies are inundated with both structured and unstructured data that flows in and out of their organizations from a growing array of sources. Analytical capabilities are essential for carriers that want to leverage the data to gain deeper, actionable insights.