Deciding between deploying a full core system overhaul and making incremental enhancements is crucial for both insurance carriers and Managing General Agents (MGAs). Each approach offers several advantages and disadvantages, but the best choice will depend on the specific needs and circumstances of your organisation.
Full core-system replacement
A full core system overhaul might seem to be an enormous undertaking. This comprehensive approach involves navigating the complexities of data migration, decommissioning outdated systems, and managing all the associated costs.
A common question in the industry is, “How long does it take to implement a complete policy administration platform?” The inside joke answer goes, “It takes at least two CTOs’ time”. While this a clear exaggeration – and is certainly not our experience at Zov Solutions – we recognise that it is often a multi-year programme and should not be underestimated.
However, the long-term benefits of enhanced efficiency and a future-proofed business often outweigh these initial challenges. By replacing legacy systems with Zov Solutions’ modern, fully integrated core platform solution, SID, organisations can streamline their core business processes, ensuring they remain relevant, reliable, and reputable.
Incremental enhancements
For those wanting a more gradual path to modernisation, incremental enhancements offer flexibility and reduced upfront investment. By upgrading specific components or just adding new products or insurance lines next to the existing book of business, clients can adapt to market changes with agility. A two-system strategy can be a better choice in certain cases, especially when high levels of specialisation and flexibility are required.
However, this approach may not fully resolve deep-rooted issues in legacy systems, which could lead to inefficiencies or compatibility challenges in the future. For example, one of the biggest challenges is the lack of consolidated information. A unified view of broker relationships and their associated profitability is only possible with additional analyses.
For a better sense of how these decisions play out in real-world scenarios, take a look at the following customer use cases.
Use case one: private lines vs. commercial clients
A prime example of a two-systems approach is the separation between a platform for private clients and one for commercial clients. These two customer groups and their brokers have very different requirements, making a specialised approach highly beneficial.
The private client business is characterised by a “high volume – low touch” model, where the automation of processes is key to efficiently serving a large number of policies. The focus here is on user-friendly customer portals that enable easy operation, along with digitising and automating routine tasks.
On the other hand, the corporate business, requires a much more complex and individualised service. Companies expect a unified view of their business relationships, including the ability to manage multiple locations, various countries, and different currencies. Here, the integration and consolidation of information regarding large clients is a priority, which often brings higher complexity to the systems.
Use case two: expanding to a new geographic market
Another case where a two-system approach can be advantageous is when entering a new geographic market. Often, the existing core system is designed for the company’s home market and might not easily accommodate the regulations, languages, currencies, or customer behaviors of a new region.
In such instances, adapting the existing system to meet the new requirements can be far more costly and time-consuming than simply implementing a new system that is tailored specifically to that market. This allows for quicker market entry and the ability to adapt to local needs without disrupting the original core system.
SIDs modular approach
The ideal solution would almost always be to operate all portfolios on a single platform. However, using specialised systems for the respective customer groups can also have clear advantages. Each system will play to its strengths without having to make compromises. Adapting a single system to meet the needs of both the private and commercial businesses can be time-consuming and costly and by separating the systems, they can be tailored to the specific needs of each target group.
The innate flexibility of SID means it can be adapted to either of these two strategies. With SID, a fully customisable solution that supports any underwriting model, in any language or currency, insurers of all sizes can scale up as they see fit.
Whether deployed on-premises or in the cloud, SID offers seamless integration, fast implementation, and robust risk management with comprehensive analytics and secure access control. This modular approach allows insurers to scale confidently, adapt to modern technologies, and remain compliant with market and regulatory changes.
With our flexible and future-proof core platform solution, insurers can navigate change with confidence. Whether opting for a complete core system overhaul or a more measured approach, we equip insurers with the means to overcome complexities and thrive in an ever-changing industry.
