Over two decades ago, brokers began transitioning into the digital age. The move away from an analog world, comprised of file rooms and fax machines, was a behemoth undertaking.
Only a few technology companies were able to deliver viable solutions at the time. Their software was sleek, practical, and one-size-fits-all. However, like most standardized platforms, brokers have outgrown their capabilities. Yet here we are, legacy systems continue to dominate the brokerage landscape nearly a quarter-century later.
Single application software programs were hailed as the ideal platform, promising to meet all the brokers’ needs. Instead of coordinating multiple resources, working with one provider also meant a single point of contact to address any issues. Additionally, fewer internal resources were required to set up, train, and manage the program.
Monolithic software systems worked incredibly well in the stable and slow-moving environment of the past. According to an IBM study, a lack of options forces consumers to stay put, even though 42% don’t trust their insurers. However, technology rapidly changes consumer behaviors and forces brokers to adapt quickly. You cannot wait in hopes that the next update will address your needs today.
Brokers today are planting their own unique flag in the marketplace. Traditionally, brokers split into two camps: the generalist and the specialist. Advances in data analysis allow today’s brokers to peer into new opportunities. As a result, verticals are becoming much deeper and highly specialized. Firms are melding their practice to meet the specific needs of more complex consumer personas.
In the same vein, identify threats from competitors, economic conditions, or environmental factors faster than ever before. Such insight allows brokers to pivot operations away from compromised positions into more favorable ones.
But to capitalize on opportunities before they pass, or stave off a threat before it is too late, requires agility across all segments of your operation. Unfortunately, one-size-fits-all programs are too bloated and cumbersome to make the adjustments you need to gain any competitive advantage. Enter the API (application programming interface) and low-code software.
At the heart of the insurance industry’s digital transformation lies two critical advances in Insurtech solutions, APIs and low-code programming. Both have helped other sectors take significant jumps in matching the speed of the ever-changing marketplace.
For example, the financial industry has witnessed explosive growth in Fintech solutions. Highly developed technologies enable companies to move into new markets fast and with a precision unfathomable just a few years ago. The insurance industry is on the cusp of experiencing the same, with 2021 representing the most significant level of insurtech funding ever, with more than $15 billion of capital infused into the space.
Application Programming Interface (API)
One of the challenging tasks a broker faces is the ability to extract, compile, and deploy data in a helpful way. Many organizations allocate precious staff time to pull information and regurgitate it, usually into a spreadsheet. APIs relieve staff of this primarily manual process. Automation means valuable and actionable insights accessible in minutes instead of weeks or months.
Low-Code Programming
Learning a new language is a complex undertaking for even the sharpest student. Low-code programming removes the necessity to learn code and applies a visual approach to software development. For example, drag-and-drop editors allow you to build practically any application needed, from workflows to websites, without enlisting the help of a seasoned software engineer.
It is important to remember that not all APIs and low-code programs are created equal. Many applications, especially those first to market, still rely on legacy systems to operate effectively. Therefore, new solutions must work with your current tools and those you may implement in the future.
Smart brokers see the opportunity customizable Insurtech solutions bring to the table. However, the successful integration of various applications into your organization will require speed and efficiency at three critical levels.
The required capital investment APIs and low-code programs are much lower than the complete overhauls needed for legacy systems. So today, brokers can choose the tools they need, when they need them, to meet the demands of the market without fear of taking a step backward first.
Your market share in the future is dependent on how quickly and effectively you adapt to digital transformation in your brokerage. No longer can you wait and see how modern technologies will play out. Instead, it will be the brokers who commit to innovation who will lead the market tomorrow.
With the aid of Insurtechs, the insurance industry is gaining speed. But, like a freight train, it will be impossible to stop once the momentum gathers. Brokers will be passed by if they miss this once-in-a-generation window of opportunity. Your organizations and customers are unique. Your technology solutions should be too.