"A thought-provoking article in The Economist prompts DevOpsGroup co-founder Steve Thair to urge insurers to get to grips with technical debt.
The Economist’s recent article on the future of insurance, Run for Cover, has a stark warning for the sector. It says incumbents risk being disintermediated or replaced by non-traditional rivals unless they innovate and transform."
Just count the number of technology stacks in any one insurer. Even if it has upgraded to Guidewire or Duck Creek platforms it is usually for just one insurance category like Motor. The costs, time and complexity of bringing another category into the digital age are just too shocking to contemplate and the technical legacy continues to grow.
Look at the figures that Steve Thair presents- no wonder many innovation plans stay in a POC/trial environment.
This a problem 360Globalnet aimed to solve; digitally transform claims across all perils without adding a multitude of new technology stacks. Avoid yet more CAPEX on the balance sheet.
Deliver an Amazon quality customer service combined with supply chain operational excellence. Delight customers, collapse costs and motivate claims teams. And you can start in it 2019 and complete deployment in 2020 bringing the organisation along with you, keeping the CFO happy and the CTO/CIO relaxed knowing legacy systems are not going to need changing, security and compliance not threatened and it gives central IT the time and space to replace legacy systems over a time period that is convenient, practical and affordable.
Large and small insurers in Europe, Australia and North America have already leveraged this solution to technical debt. Time for you to explore it?
PS- I declare an interest as member of 360Globalnet. That does not take away from the benefits described above though. So find out more - Mike.Daly@360Globalnet.com
Many traditional organisations spend 70% or more of their IT budget on Business as Usual (BAU) and just 20% on innovation and new value-added services (the remaining 10% goes on overheads and running costs). By contrast, high-performing IT organisations, spend 40% of their IT budget on BAU, and 50% on innovation and continuous improvement. This 30% difference in BAU spend is essentially the ‘interest payment’ on technical debt. Insurers’ comparatively low level of spend on computing technology suggest it’s unlikely that the principal of technical debt is being paid off. If the idea of wasting 30% of IT budget on technical debt every year isn’t enough to give insurance CFOs apoplexy, let’s calculate the principal on that technical debt. This gives a rough indication of what you might need to spend to reduce it, so transformation initiatives can succeed,
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