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When insurtech meets coretech, the customer wins

There’s something new happening in the insurance industry. Insurers are flipping the lens on their relationships with the consumer . With good reason too, according to PwC the insurance industry has potentially £50bn of revenue to be disrupted in the UK, alone.  After a decade spent buying technology to make it easier to do business with customers, insurers now are focusing on technology to make it easier for customers to do business with them. 

Consumer technology, in all its forms, is shaping peoples’ patience and expectations for when and how they communicate with businesses. These evolving expectations are prompting insurers to reconsider their business models as well as their technology investments. You can see insurers adopt this outside-in perspective as they consider how to engage their customers, as they launch consumer-direct businesses, and join digital insurance ecosystems. They are looking at a new class of technology–called coretech–to help them.

Research from McKinsey & Co. has found that insurers have benefited greatly from their digitisation efforts. With some experiencing  increases in process efficiency by up to 50%, as well as 3-to–5% increases in underwriting and claims effectiveness. All of which was necessary but foundational to delivering on customers’ increasingly sophisticated expectations.    

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To create these richer and more meaningful customer experiences, insurers need an  AI-enhanced customer knowledge and intuitive context-aware workflows that characterise insurtech. Indeed, the promise of insurtech is that it will support innovation through contemporary customer experiences and emerging business models, which is a driving factor behind the insurtech startups phenom. 

Insurtech can’t go it alone

The truth, however, is that few insurtechs are legitimately standalone. An insurtech is just one part of a diverse insurance ecosystem, and they mostly rely on integrations to insurance core systems to fulfill their potential.  

But it’s not that easy. 

Insurance core systems put into production even three to five years ago are limited in their ability to connect to insurtechs and other digital insurance ecosystems. They were not designed with the microservices, application programming interfaces (APIs), and flexibility necessary to support emerging business models.

While the customer experience has benefited from digitalisation, portals, and mobile, the focus was on internal efficiencies and reducing call center costs.  

In addition, the “beating heart” of most insurers’ core platforms is policy administration.  And until recently customer relationships were largely initiated infrequently, while being owned, and maintained by external agents and brokersInsurer systems are typically  product-centric, this means that the insurers’ ability to become customer centric is limited by the very architecture of their insurance core systems. 

Can you have core strength and insurtech innovation?

In 2020 and beyond, determining where to invest their technology budgets presents a conundrum for many insurers. Should they shore up their incumbent core systems with expensive upgrades, or invest in insurtechs? Either decision entails a commitment to creating and maintaining a growing number of complex integrations to systems and data to maximize the value of those investments. 

But for insurers looking to achieve customer centricity and keep their options open as they determine their place in emerging insurance ecosystems, coretech offers a new path.

What is coretech?

Coretech is the natural evolution of core systems and new technology and methodologies, mostly pioneered by big tech,  that is designed to support an insurance future that is customer-focused. It shares the DNA of insurtech but with more end-to-end capability and ability to scale than off-the-shelf insurtech applications. Like the modern legacy systems, coretech is functionally rich. But because of its open, cloud-native architecture, it’s continuously updated and laden with the microservices and open APIs () necessary to readily consume internal and external data and connect with insurtechs. 

Most importantly, with the customer record at its center, coretech is designed to serve as the hub for digital insurance ecosystems. These ecosystems will deliver excellent customer experiences, even as customer expectations continue to evolve. Coretech allows insurers to take greater advantage of insurtech and data partners to deliver benefits to customers and prospects. It allows them to focus on the next phase of their digital transformations: fulfilling expectations for customer experiences that are informed, personalised and above all: fast. 


Anthony Grosso is SVP, and head of marketing and communications at core and digital platform provider EIS and the author of When Insuretech Meets Coretech, the Customer Wins.  

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