In a recent Coverager daily email, Clearcover CEO Kyle Nakatsuji was interviewed and asked his opinion on the most overused word in insurtech. His response was, “Disruption. The very term is competitor-focused, not customer-focused.”
He’s exactly right. We’ve actually been saying that for years. When we talk with insurance carriers, we never use the word disruption. That’s exactly what a carrier doesn’t want to hear. They don’t want anything to disrupt the policies their clients have in place.
I know disruption became a popular term in technology, especially in Silicon Valley and on the startup scene. But no customer, insurance or otherwise, wants to hear about how a new technology solution will cause disruption. The term was originally used in reference to how new technologies impacted legacy technologies. New technologies would disrupt providers of older technologies, making it difficult for them to compete and make sales. Unfortunately a lot people liked the word and started applying it where it doesn’t fit.
We work with a lot of carriers that run into issues because of legacy technology they’re using. But replacing legacy technology in insurance is much easier said than done. Millions of dollars worth of policies are attached to those legacy technologies. Shifting away from them is a very expensive and very, very time consuming (usually taking years) process. Telling an insurance carrier that we recommend replacing a policy admin system, for example, would be a real disruption, in the most literal sense of the word.
Disruption isn’t what any good technology provider does. We certainly don’t want to disrupt any processes or activities. We’re not in business to cause problems. We’re here to fix them. Rather than causing a disruption, we want to drive improvement.
Sometimes improvement does mean replacing a legacy technology, but it’s seldom that easy. More often improvement means understanding the limitations of legacy technologies and working with a client to improve associated processes because they’re stuck with that legacy technology. We’re frequently seeing more and more improvement requests based in a middle ground - improving legacy technology while also replacing it. How does that work? We help a client move away from a legacy technology over a period of time, usually years, while also helping them make improvements within the legacy technology since they’ll still have to use it for some time.
Here’s an example:
An insurance carrier with $100 million in premiums wanted to slowly replace its policy admin system (PAS) over a two year period. Since this was a gradual process, the carrier’s operations had to work with both the old PAS and the new over that two year period. However, the policy document formatting was different between the old PAS and the new. The old exported policy documents as postscript, while the new exported them as PDFs.
The carrier wanted a smooth PAS transition, meaning they didn’t want policyholders to be impacted. As policies were moved from the old to the new, all communications with policyholders had to follow. The carrier couldn’t have multiple simultaneous communications going to policyholders (one from the old and one from the new). They came to us to help with the transition, and most importantly, to ensure no day to day operations were disrupted.
MassPrinting developed a solution that would accept both the postscript and PDF document formats, standardizing the output into one workflow. This meant the carrier didn’t have to make any changes on their end. We also standardized all aspects of the two policy version - welcome pages, marketing inserts, address pages, envelopes, and return archive image - across both print and electronic delivery. This eliminated potential policy variations that policyholders could see throughout the transition.
We eliminated any possibility of disruption to the carrier and its policyholders because we understood the carrier’s data, workflow, requirements, and industry. That’s supposed to be the purpose of technology in the insurance industry - mitigating or eliminating disruption.