Success in insurance is about adapting to change. New regulations, shifting customer demands, emerging market trends. Insurers have to be on their toes to stay competitive. The challenge is that many are stuck with decades-old, inflexible software systems.

Suppose you are an insurance provider intending to roll out a new product to cater to your customers’ changing needs, but your legacy software is so rigid and non-configurable that making even the smallest tweak becomes an ordeal. The IT team becomes involved and dives into a tangled, spaghetti-like codebase. Six months later, you are still no closer to launching your new product.

Legacy drag

Technical limitations are only the beginning. Non-configurable systems also make it a struggle to keep up with regulatory changes and industry trends. People often wonder why the insurance sector appears to be evolving slower than parallel industries such as payments and banking.

The answer lies in our legacy, non-configurable systems that simplycannot keep up. By the time the IT team figures out how to make the necessary changes, the market has already moved on. On the talent side of the equation, finding people who know how to work on legacy insurance systems will only become harder, like trying to find a mechanic who specialises in restoring vintage cars. The pool of qualified talent is dwindling and the costs just keep going up

Perhaps the biggest challenge is around integration. We need to be able to seamlessly connect with all kinds of third-party services, from customer relationship management tools to data analytics platforms. Non-configurable systems are holding insurers back from taking advantage of all the new insurtech solutions entering the market, expected to grow to $10.14bn by 2025.

The good news is that more companies are opting to purchase or implement configurable software as they seek enhanced flexibility, agility, cost efficiency, user empowerment and scalability without the cost of extensive redevelopment.

A report by Celent found that 72% of insurers have either implemented or are planning to implement configurable policy administration systems that allow for easy customisation and integration, streamlining policy creation, management and renewal processes.

Benefits of configurable software

The key benefit of configurable software is the ability to meet your clients’ demands for tailored software solutions. It allows businesses to customise features, workflows and interfaces without extensive coding, making it easier to adapt to changing requirements.

It empowers end-users and non-technical staff to make changes and tailored updates to the system without relying heavily on IT departments, leading to lower development costs, increased satisfaction and improved productivity.

Configurability is also about speed. It enables the rapid deploymentand modification of applications; a crucial capability in an environment where requirements can change quickly and businesses need to respond promptly to market demands. This approach can also reduce development costs and time. Instead of building solutions from scratch, companies can configure existing platforms to meet their needs, resulting in significant cost savings.

Insurers are always looking for ways to differentiate themselves from competitors. Configurable software allows you to create unique, tailored solutions that provide a competitive edge in the market. Configurable systems are better positioned to integrate with modern technologies and evolve through time, while new features and updates can be implemented faster through configuration rather than coding.

Additionally, cloud-based configurable software solutions provide accessibility, scalability and cost effectiveness. The cloud allows businesses to leverage configurable software without needing extensive on-premises infrastructure.

Yes, implementing new, more configurable systems or making legacy systems configurable can be challenging and resource intensive. But, the costs are nowhere near as onerous as the ever-rising burden of maintaining legacy systems, especially when you factor in the opportunity costs. A strategic approach involving thorough planning, modularisation and continuous improvement can help organisations successfully transform their business to meet modern demands.

At Noria, we recently took such an approach when onboarding a marine insurer to our cloud-based, highly configurable insurance platform, helping them migrate from their mainframe legacy system.

The entire onboarding process, from a signed contract to users starting to produce data on production, was completed in under five months; a real achievement in a sector where onboarding new insurers to a new system is a highly complex process.

This success was only possible because of the highly configurable nature of the Noria Insurance Platform, that allowed most business processes to be configured into the system with minimal or no coding involved. As a result, users can now perform their daily tasks more efficiently than before.

Getting started

The journey towards adopting more configurable software solutions can seem daunting for insurers burdened by decades-old legacy systems. However, the process can be broken down into manageable steps to help ease the transition.

The first step is to carefully assess the current software ecosystem and identify the pain points that configurable solutions can address. This may include challenges around product innovation, regulatory compliance, integration with third-party tools, or the ability to empower non-technical staff. Understanding these pain points will help guide the selection of the right configurable platforms and implementation approach, or guide the decision to make legacy software configurable.

Next, research the configurable software options available in the market, evaluating their features, configurability, integration capabilities and total cost of ownership. Assess the vendor’s industry expertise, implementation track record and long-term product roadmap. Pilot projects can then be undertaken to test the selected configurable solutions on a small scale, allowing your organisation to gain hands-on experience and validate the anticipated benefits before committing to a full-scale rollout. This iterative, agile approach helps minimise risk and ensure a smoother transition.

Throughout the process, it is crucial to secure buy-in from key stakeholders, including IT, business units, and executive leadership. Effective change management and training programmes will also be essential to empower employees to use the new configurable systems.

Trends towards configurability

The rise in configurable software reflects a broader trend toward greater flexibility, efficiency and user empowerment in the digital world. This trend is likely to continue growing as technology evolves and businesses increasingly seek agile and adaptable solutions.

Configurable software is an adaptive technology that enables an adaptive workforce. With a highly flexible system that allows for rapid changes and control over business workflows, it helps employees become highly flexible and versatile, capable of quickly responding to changing conditions, technologies and business needs.

These legacy systems have been the backbone of the insurance industry for a long time. But the world has changed and insurers need to change with it.

They need to start investing in more configurable, adaptable software that can keep up with the pace of the industry. It is not going to be an easy transition, but the insurers that can stay nimble and responsive are the ones that will thrive as the landscape continues to transform.