Digital transformation is changing the way the insurance industry is operating. Modernization of technology has become inevitable to help insurance companies move ahead. However, many companies are still hesitant because of some myths related to tech modernization. Bahaa Abdul Hussein looks at some of these myths and present the real facts.
Myth: It is time consuming
One of the myths that make companies hesitate to modernize is the time factor. There is a belief that the process takes a lot of time and too much money. The reality is different. Companies can plan the modernization as per their convenience. They can do it phases, so they manage time and money better. This would also help them ensure the latest technology is used.
Myth: There is no ROI
A wrong belief is that there is no return on investments on tech modernization. This can happen under two scenarios. First, if a company chooses partial modernization and continues to use a legacy system for some processes they will not see the full impact. Running two systems is complex and getting ROI can be an issue. Some companies calculate ROI incorrectly as looking at costs only. Instead, they need to look at gain in productivity and decreased maintenance costs. This would help them get the correct ROI data.
Myth: I can do the same thing my competitor did
Tech modernization should be done based on the company’s specific needs. Implementing changes based on what a competitor is doing is a wrong way to go. Each business has its own goals and priorities. The tech modernization of your company should be planned based on your unique needs. This is the best way to ensure tangible benefits are obtained.
Myth: Mainframes have to be replaced
Any insurance companies would have invested in mainframes. They are now worried that the mainframes would become redundant after tech modernization. This is not correct. They can continue to use mainframes, so they benefit from its processing power. Along with this, they can use cloud computing. The cloud can be linked to mainframes through APIs ensuring the best of both the systems.
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