The insurance sector is among the largest and most essential businesses in the world. Despite this, it has been historically lagging concerning technological trends. Today’s current and potential markets, however, are pressing on insurers to partner with software development companies to improve the service.
2019 is a year full of advancements in tech use, rendering more systematic transactions between clients and insurers as inevitable. Here are some examples of what software developers are up to about changing the insurance game.
- Cloud-Based Software Architecture
Insurance software has long been stored on local servers. However, storing data within remote data centers now offers several benefits for both insurers and clients.
Constant repairs and maintenance of local servers drain additional expenses for insurance companies. With dedicated data centers, money can be saved with lower rates being offered. Easier scaling in remote centers also provides the same level of server capacity as their localized counterparts. As insurance software can now be hosted in remote locations, all cloud-based software can be shared with anyone, ensuring everyone gets the up-to-date versions. Not only can insurers maintain and operate their systems from anywhere, but customers can also safely access their profiles and other sensitive information with a greater sense of security.
- Big Data Assessments
Every successful insurance business model is cored with a comprehensive risk analysis. An insurer’s success depends on how accurately they can determine the costs for each customer base. This includes calculating a certain client’s risk of property loss, accidents, or possible death through refined methods in statistical analysis. However, statistics can be limited by margins of errors and are suitable mostly for groups rather than individuals.
With the rise of big data, however, insurers can plot risk indicators for individual clients with greater accuracy and precision. Insurers can now set rates based on hundreds or thousands of data points. For example, public posts on social media can predict behavioral patterns and risks. This is a double-edged sword for privacy concerns, but constant refinements to data acquisition and handling can ensure win-win situations for both insurers and clients.
- Software as a Service (SaaS) Model
Insurance companies can adopt SaaS by tapping into third-party providers for application hosting and paying them service charges. It ensures increased availability to Internet-based customers. SaaS is among the three main components of cloud computing, besides Internet as a Service (IaaS) and Platform as a Service (PaaS).
Software developers can advertise their latest software with a limited trial period and a lower initial cost. This allows for mutually beneficial interactions with clients. Such a method can be employed by start-up companies looking for “big break” opportunities. Insurers using the software can later be charged additional fees for upgrades.
- Modernization of Existing Legacy Systems
Most insurance companies still use legacy systems years or decades old, despite the pressing need to modernize their IT infrastructure and business processes. The benefits of a large-scale upgrade by far outweigh its risks.
Having a modernized system means that maintenance costs are reduced; thus, providing greater efficiency in business operations and better client satisfaction. Upgrading core systems also guarantees that insurers can keep up with growing demands from new generation customers. All customers are then assured of convenient service, whether in application processing, transactions, billing, or other administrative functions.
- Enhanced Cybersecurity
Data-driven operations and constant technology updates lead to more proactive and strategic cybersecurity, which is more imperative for every company, including insurance stakeholders. Insurers can opt to partner with like-minded businesses to implement a more dynamic threat monitoring system, as well as apply massive data for scenario-modeling challenges. Stronger protection is needed to keep confidential client information from potential breaches.
A Brighter Future for Insurance Software
The year 2019 is full of software trends for the insurance sector.
Insurers have begun adopting cloud-based architecture and data-based assessments for faster, more efficient, and more accurate services and client data gathering. Implementation of SaaS models and upgrading legacy systems are essential steps for reduced maintenance costs. Lastly, insurers partner with other companies for enhanced cybersecurity, especially when using common software.
Thus, insurance software will inevitably evolve for more dynamic use.