Change is part of life; we all adapt to it even when it’s the kind of change we might not like at first. Andre Symes, Chief Growth Officer at Genasys Tech, takes a look at how legacy systems vs the new eco-system isn’t just a simple either/or choice. Insurers can refine, adapt and change.
When you think of the word ‘legacy’ in the insurance world, do you associate it with ‘old’ and ‘outdated’ or even ‘obsolete’?
I’m starting to feel a bit sorry for all the legacy systems out there. Their technology was at the cutting edge in their day and at their core, their technology is rock solid. Being solid is often a good thing and if it’s a central part of your strategy, why change? I’m the first to applaud any business that resists the urge to implement technology change for the sake of change, contrary to the chatter that might be taking place in the beanbag area of the office over a tall, non-fat latte with extra hazelnut drizzle.
However, if agility or innovation is a desired strategy, being as solid as a Sherman tank has some drawbacks. Some older tech is so solid, embedded in concrete if you like, that it’s not flexible enough to interact with newer systems or cope with the demands of newer ways of selling products or managing policies or claims.
Hence the natural connotation that legacy is a barrier for innovation as the larger insurance companies look to move into new areas, keep pace with customer demands, and deliver their products and services in new and more efficient ways.
However ripping out an entire system and replacing it not only comes with huge cost and effort, but also significant risk. Think about it this way: would you be keen to change one of the twinjets on a Boeing 777 midflight? Insurance companies can’t land, ‘disembark’ their customers and call in their engineers to test and install a new tech engine to transform a part of their operation; they have to do it while still flying towards their destination. Equally, moving away from a legacy tech stack to partner with a third party to develop a new proposition requires a leap of faith with reputations on the line. What are the long-term implications of having both a legacy system and a number of external systems? Is it possible to future proof?
I often liken the legacy system conundrum to someone who has painted themselves into a corner during a redecorating project – they’ve spent a lot of time and money on creating a beautiful space but no-one can get out of it. Well the room doesn’t necessarily need a new colour scheme, it just needs to be opened up to let in a bit more light and space.
The key to unlock that light and space is to engage with a partner who has technology future proofing front of mind – a partner who not only has the latest no code tools to enable fast product development combined with a powerful and mature back-end to scale up as new ideas grow and succeed, but also who deliver the additional benefits of REST APIs. This allows a large insurance company to roll these products off the innovation platform on to their own legacy system or maintain a hybrid approach.
Innovation platforms who have hundreds of REST APIs allow insurance companies of all sizes to pick supplementary technology partners from an a la carte menu to meet their particular appetite today or tomorrow. This flexibility is essential as there will always be new developments that will meet an as yet unforeseen business need or problem. Being able to cater for the unpredictable as well as the planned direction of travel not only enables companies to be nimble and change course as necessary, it is also the key to preventing the tech of today becoming the legacy systems of tomorrow.