In the latest edition of the FAnews Online magazine, Executive Head: Risk & Projects, Hendrik Heyns discusses how complicated product and long processes have been an entry barrier in the insurance sector and what can be done to simplify and speed up the process.
The rise of the digital era and increased access to technology have broken down these barriers in recent times
Data sharing between insurers and intermediaries is becoming more and more important.
The regulator has already put a deadline in place to ensure ease of access by insurers to data held by certain intermediaries. In addition, they will undoubtedly start casting the net wider in future.
Many businesses carry legacy products and processes that do not support the rapidly evolving landscape. Customer needs are evolving and Insurtech is becoming more prevalent as a viable option, especially for younger consumers.
If systems and platforms cannot keep up with the pace of innovation, there is an increased risk that insurers and intermediaries who do not evolve will get left behind.
Not far off
The January 2020 deadline set by the regulator might seem far off. However, the processes required to adapt legacy platforms (some of which are more than 20 years old) can be extremely complex and lengthy.
Software developers are scrambling to make the necessary updates. However, traditional development approaches are falling short. Developing and updating software in a straight line (analyse, plan, design, test, correct, test, deploy) is simply too slow and cumbersome.
One of the major drawbacks of this approach (commonly referred to as the waterfall approach) is the high number of handoffs. This often leads to an extremely drawn-out process coupled with an increased risk of miscommunication.
A further disadvantage is the increased potential of misalignment between the customer’s requirements and the under- standing of the developers who are ultimately tasked with making the necessary changes. Anyone who has been involved in a project such as this will immediately recog- nise these pain points.
If we are to simplify and speed up the process – which, as I mentioned above, is crucial for the continued support of policy- holders via the intermediated market – we have to adopt a more modern approach to software development.
The days of briefing your developers and then waiting a few months to see results are over. A far better way of working is in shorter cycles, focusing on constant commu- nication and collaboration.
Getting all parties involved in a more integrative process has proved enormously successful on all the projects we are working on. Granted, it does require more time and input on the client’s side, but the results speak for themselves.
This type of methodology typically delivers a combined analysis and planning phase of about two weeks and then a combined design, build, test and deploy phase of two to four weeks, after which the software is released into a production environment. This greatly improves the lead time to implementation and allows for incremental improvement of your products on an ongoing basis.
Key to success
A key to success here is that a small cross-functional team is put together from the start of a project and this team sees it through to the end.
The customer driving the change is included in the project, from inception to completion, and has the benefit of reviewing bite-size pieces of software before the project team finalises testing and signs it off. This allows you to change the direction you wish to take at any stage in the process, which can be implemented in the very next cycle.
The most important thing to remember is to get involved and stay involved from the start. The closer you are to the project, the closer the end result will be to your needs as they develop in keeping with the tides of regulation, technology and consumerism.
Be sure to get your copy of the FAnews April 2018 editionFAnews April 2018 Edition (dragged)