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Four Issues Faced by P&C Insurance in Digital Transformation

By Pamela Morgan, Insurance CIO Outlook | Monday, February 01, 2021

Legacy systems present a digital transformation challenge because it is challenging to incorporate modern technology into older systems, and it can be complicated and costly to create custom APIs.

Fremont, CA: P&C insurance firms will benefit from digital transformation such as enhancing creativity and agility, increasing employee engagement, and influencing revenues. Companies dedicated to technological adoption will carry out cost reductions, improve customers' experience, and manage sustainable growth.

While companies that embrace digital transformation have many advantages, P&C insurers have been reluctant to implement it because of the many challenges they face:

Change Management

Digital transformation is not only about purchasing and applying a technology solution. It is about handling the shift to policies, systems, and the everyday lives of staff that will be affected by that solution.

Data Management

For P&C insurance firms, the rapid growth of data has created a range of possibilities like offering useful insights into clients, industries, and patterns. However, maintaining high volumes of data and using analytics tools to gather insights is costly and difficult.

Inadequate IT Expertise

Implementing new technology demands IT skills that can be difficult for insurance companies to find. It is not just about the technical abilities of an applicant either. An applicant needs to have a variety of characteristics to contribute to the job fully. It can be challenging to find a candidate with the correct combination of technical skills, soft skills, and experience, and the competition is intense for ideal candidates.

Numerous Legacy Systems

Legacy systems present a digital transformation challenge because it is challenging to incorporate modern technology into older systems, and it can be complicated and costly to create custom APIs.

While legacy systems are costly to maintain, replacing them can also be pricey, leaving insurance companies in a tough position when it comes to digital transformation.

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