Opinion: Technical Debt & Legacy IT Could Sink a Few Insurers

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. Four core trends and risks are highlighted: Big Data techniques, and increasing commodification of data, mean leveraging existing data assets and plugging into new sources of data from third parties is a key competency. Insurance risk is becoming less predictable and the impacts more severe. Issues are rooted in complex and far-reaching factors such as ageing population, cyberthreats and climate change. There’s a shift in the nature of assets from tangible (property, plant and equipment (PP&E)) to intangible (intellectual property (IP), brand), which is inherently harder to price. Customer expectations are changing, especially amongst Digital Natives. They expect seamless, fast and stylish ‘customer experiences’ across online, mobile and in-person interactions. This creates problems for ‘traditional’ insurers, particularly those with dated broker-centric channel models. What’s hindering transformation? While many insurers are talking about transformation, it seems the reality doesn’t match the hype. In BCG’s innovation rankings, the insurance … Continue reading Opinion: Technical Debt & Legacy IT Could Sink a Few Insurers