While over the past few years insurers in India have focused on developing a seamless frontend to offer a superior customer experience, a lot of work needs to be done at the backend transformation according to Rana Biswas, Vice President for APAC at Equisoft, a tech company driving digital transformation for Insurance and Wealth Management companies
Value ChainRana believes insurers need to look at an entire value chain as the demand for insurance increases and they can’t afford to have downtime or not serve the customer when the demand for it occurs.
Insurance companies have two important components — the core Policy Admin System (PAS), which is the brain and heart of any insurance company (equivalent to Core Banking Solution in banks) and the frontend, which is essentially the digital piece of sales and customer service.
Rana added, “The frontend is equally important because both complement each other. Most insurers have a strong frontend which we are seeing right now, while the Indian Insurance industry is more than 20 year old and 90% insurers would have a legacy system across APAC and later on added layers to integrate with frontend, what essentially happens is there’s huge anomaly in the legacy policy system which is supposed to be fast, agile and nimble footed to keep pace with the front end and that’s not happening.”
Upgrading the old system is not equivalent to a new system, at some point the upgrades will stop coming in because the core fundamental of the architecture is changed.Rana Biswas, Vice President (APAC), Equisoft
He believes upgrading the old system is not equivalent to a new system, at some point the upgrades will stop coming in because the core fundamental of the architecture is changed.This anomaly between the front-end and backend could potentially impact the launch of new products as in old systems it takes nearly in excess of four months to roll out new products.He said, “Insurers in India are yet to fully align their backend with frontend to harness the real power of digital journey and the entire value chain has to work in tandem and the entire process has to pivot around customer centricity.”
Digital Transformation in any financial services company is not an easy task. He is up for a multi-stakeholder approach is needed in any organisation. The CIO can push it but the management has to take ownership and drive the right metrics throughout and after the transformation exercise.
A full fledged digital transformation is a big project and doesn’t happens overnight it takes 2-3 years and requires meticulous planning and due diligence. Insurers will have to meet and match customer expectations as it is quite a competitive market both in non-life and life insurance space.Rana Biswas, Vice President (APAC), Equisoft
He noted, “A full fledged digital transformation is a big project and doesn’t happens overnight it takes 2-3 years and requires meticulous planning and due diligence. Insurers will have to meet and match customer expectations as it is quite a competitive market both in non-life and life insurance space.”
According to him, the trade-off between the investment and return on investment is to bring in more business, increase marketshare, efficiency and productivity and it’s a 3-5 year horizon to drive the metrics with respective business heads as there are multiple stakeholders.
While discussing Indian insurers and their focus on digital transformation, he said, “They are warming up for full transformation while they’re making profits but there are accumulated losses so it will take a while for them to invest heavily on a full journey. We see a lot of insurance companies warming up for digital transformation, CIOs are evaluating whether they can replace couple of modules to bring in efficiency and productivity. It’s all about the mindset shift which is required and understand that this is critical and the need to do is there.”
Thee pandemic has reset the game and the products are going more towards simplification and standardisation and in such a simplified product regime insurers can’t afford to have complex backend processes.
He concluded, “Budget is not an issue as such, if the CXOs believe it’s a must-have instead of good to have the board won’t deny the transformation exercise.”
Budget is not an issue as such, if the CXOs believe it’s a must-have instead of good to have the board won’t deny the transformation exercise.Rana Biswas, Vice President (APAC), Equisoft