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4 Ways Legacy Systems Are Killing Your Business

Posted on July 25, 2016 by Kyle Heiser

Eliminate legacy systems vertafore

Today's insurance carriers know the feeling all too well. Using antiquated computer systems and software methods in an ever-increasing technological age is having an effect on staff.

The pain is real.

Capabilities of these “legacy systems” are strikingly lacking compared to newer models, which are now helping businesses to operate more efficiently, and in turn, allowing for greater innovation and better customer service. Information technology magazine, Computer Weekly, reports that despite the use of legacy systems negatively impacting insurance firms' ability to generate new business, only 42% would rather adopt new systems. Of course, we know the insurance industry is inherently risk averse, so it makes sense that insurance carriers who have relied on legacy systems for decades would be hesitant to fix a piece of their business that is technically working, even if it's an incredibly inefficient system that is costing them significant time and money long-term.

Even if you're satisfied with your current computer systems, you need to take the time to consider the implementation of new systems. If you don't, you're missing out on a huge opportunity to better connect with customers, save significantly on IT costs, and speed up business processes by switching to modern insurance technology that can easily scale with your business.

Here are four major disadvantages legacy systems pose for insurance carriers:

Business Silos Abound

Because most legacy systems were built as standalone applications, they don't tend to work together easily and often require substantial amounts of IT resources to integrate or communicate with other systems. They can also create business silos, separating useful information for no particular reason. As technology media company, TechTarget details in an article discussing legacy systems, whenever insurance groups acquire a new company, the acquisition requires serious thought about what IT systems should stay, what should be eliminated, and how existing systems should work together. Typically, the effort to integrate or merge the disparate systems, when taken on, can take several years.

Insurance carriers rely on the storage and reusability of data to optimize the customer life cycle while protecting themselves and their insureds. Without an interconnected system that can grow with the company, there's more room for business silos with unshared information, a higher likelihood of inaccuracies, and a less streamlined process to keep customers happy.

Your Systems Might Not Fit Compliance Standards

Working within the standards of key laws related to insurance, as well as the company specific rules that your actuaries recommend as they measure and decrease risk, is extremely labor intensive with legacy systems.

The result: added costs for your business and increased chances of costly claims that will impact your bottom line.

IT Costs Keep Growing

Let's not overthink this.

Technology should enable your company to conduct business more efficiently with fewer required resources. Plain and simple.

If your technology isn't working in this way, why have it?

Since legacy systems were often conceived and created decades ago, they mandate a specific skill set within your IT resources. More troubleshooting and more creative ways to make them work with your current business model become increasingly necessary each year. If you're not able to find employees who already know how to work within your legacy systems, additional training will be required, and you will likely find that knowledgeable resources aren’t readily available.

Technology designed specifically for the insurance industry and is continually being updated will scale with your business. This means less pressure on your IT department. Ever-evolving technology can also result in fewer team members needed to maintain your day-to-day business efficiently. With newer systems, customized functionality based on your unique needs becomes a much more attainable reality.

Legacy Systems Can't Harness the Power of Data

Customer data isn't just valuable to the individual and their insurance needs. When thoughtfully analyzed by companies, data provides powerful insights to help your business optimize processes and growth strategies. Utilizing this data can also help deliver better customer service to your insureds, and who doesn't want that?

Having the inability to transform your data into actionable insights hinders innovation and stagnates potential functionality options. You put yourself at a higher risk of falling behind competitors with more sophisticated systems. 

Improve Your Business, Today

A 2014 Gartner study concluded that poor planning contributes to a significant risk of failure for legacy modernization. For more than 80% of companies modernization takes longer than expected, decreasing time and increasing stress. 

A smart and adaptable technology solution alleviates many of these problems, so why wait?

Interested in learning more about how Vertafore can help? Take a look at our solutions

kyle heiser bio

Kyle Heiser

Kyle Heiser is a member of Vertafore's Carrier marketing team. Mr. Heiser is dedicated to helping Carrier's, MGA's, and MGU's get the most out of their relationship with Vertafore.


 

 
 

 

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