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System Modernization: Put Customers at the Core

Insurers striving to modernize their core policy administration, billing, and claims systems and processes must put customer experience at the center of these efforts.

Core systems modernization is a top priority among insurers seeking business process optimization, growth, and improved customer experience. Consumers accustomed to agility in everyday interactions demand efficiency from their insurers. Legacy policy admin, claims, billing, and underwriting systems hamper insurance company efforts to meet these expectations.

"Most current and legacy systems have not evolved around the customer experience at all," says Michael Jackowski, global managing director for Accenture Duck Creek. "It's wise that so many carriers in today's environment are looking to modernize." While policy-centric and product-centric systems used to dominate the industry, customer-centric platforms are fast becoming the norm.

The evolution of the customer
Complicating these customer-focused modernization initiatives, however, is the issue of understanding who the customer actually is. "The definition of who the customer of our core systems is has expanded rather greatly," says Andy Scurto, president of ISCS, a provider of software and services to the P&C industry. As Scurto notes, the term "customers" has broadened to include agents, policyholders, and potential customers, all of whom expect greater service from insurance companies -- and, by extension, the systems insurers use to interact with all of their customers.

Furthermore, expectations are driven less by carrier interactions and much more by instantaneous transactions consumers have undertaken with enterprises such as Amazon, Google, and eBay. "Policyholders want to know what's going on and to be able to access their information and services in any way they choose," says Karlyn Carnahan, research director at Celent. "We're definitely seeing carriers noting this and expanding their capabilities."  

Ken Mitchel, Clements Worldwide

With digital at the core of their personal communications, customers today want to chat with agents online, send electronic requests, and receive email and text notifications. "The system has to communicate the way people want to communicate," ISCS's Scurto explains.

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Acknowledging this, Clements Worldwide in Washington, D.C., with about 20,000 policyholders, a provider of insurance for expatriates and international organizations, chose ISCS's SurePower Innovation Modern Enterprise Suite to improve customer service and prepare for business growth. The web-based system contains mobile capabilities and enables policy self-service and fulfillment online.

"What we focused on first and foremost was the flexibility of the system and modern technology," says Ken Mitchel, director of IT at Clements, describing his company's requirements. "We need to quickly adapt to market conditions, carrier demands, and compliance." The system, which is expected to go live in September, will provide the insurer with flexibility to adopt new technologies consumers demand, Mitchel adds. 

The agent connection
Modern core systems also provide the foundation for enabling agents and other producers to effectively sell insurance products in today's real-time, multichannel environment. "The experience provided by the agency is often shaped by how well the agent can provide service to policyholders," says Celent's Carnahan. "Agents put business with a carrier that's easiest to work with." By providing tools that simplify processes for agents, not only will agents be happier (and more loyal to the carriers whose products they sell), but insurers also can improve the policyholder experience.  

Karlyn Carnahan, Celent

This was the goal of Wolverine Mutual Insurance Co. in Dowagiac, Mich., with 45,000 policyholders, when it chose the Innovation Insurer suite from Innovation Group in October 2013. The personal lines insurer is modernizing its core system to improve on a platform that is adequate for office use but does not facilitate growth.

"What we needed was a finance system to make the agent's experience better, and [also to] build a customer portal," says Wolverine CEO Jim Laing. "We concluded that we didn't want to marry another vendor's component into our base system, so we decided to go back to square one and build from the base up."

Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio

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