Throughout a decade in consulting, I’ve had the opportunity to work with many partners in the insurance industry including, most recently, RGA. Several of my colleagues at Polaris also have experience working on business-critical projects for insurance partners, or they’ve had full-time development and IT roles at large insurance organizations.
In many cases, these partners turn to us for help modernizing their outdated, legacy systems. They might face changing expectations from customers or increasing pressure from competitors and huge tech companies entering the space for the first time, or all of the above. Either way, they see the need to modernize but need expert help to execute on time and at budget. Below, I’ll share some of our insights about why application modernization comes with its own considerations–and risks–for the insurance industry.
What Application Modernization Means for Insurance
While business agility is a priority for executives and IT leaders across industries today, insurance companies face unique pressure for it. For starters, the insurance industry is fiercely competitive. In recent years, it’s also being constantly reshaped by new technology, like data-collecting sensors in our homes and cars.
Insurance organizations are continually offering new products and features to entice prospective customers and improve their analytics. App modernization offers the increased agility these organizations need if they plan to get ahead of their competition, or even just keep up.
Additionally, insurance organizations ingest and manage a lot of data. App modernization can provide new ways of analyzing that data to provide insights and new data points, which in turn can be used to make more informed decisions and unlock hidden business value.
Insurance’s #1 Risk During App Mod
In a recent post, we outlined the three-step path to modernization that IT leaders in any industry should be prepared for. Insurance IT leaders have to tread with extra caution, however, because of the risk of these mistakes:
- Missing the Mark
Many app modernization projects and dev approaches include some level of rearchitecting an application. With this, there’s always the risk that critical business logic will be missed or incorrectly represented in the new system. According to a report by PMI, 31% of IT projects will fail to meet their original goals. For something like premium processing software, this means there’s a very real risk of losing money for the insurance company if data is mishandled.
- Causing Outages
Coming in at a close second, insurance companies have a high risk of outages. We’ve already established how these organizations ingest a lot of data, and how that’s only increasing with new tracking and monitoring technology. They’re also continuously processing that data into claims and premiums, at all times of the day. Missing data can have serious impacts on the core business.
Given the risks, insurance companies can’t afford to fail outright with their IT projects or even experience downtime while shifting to new code bases or infrastructure. Their path to application modernization has to happen in carefully planned stages, with mitigation strategies at each stage to ensure a smooth transition.
Luckily, experienced partners like Polaris can help. We can coach teams on the leading Agile practices that enable high performance during app modernization. We have the DevOps expertise to continuously integrate and deploy code into environments and focus on the quality and stability of the code. Finally, with our app mod experience we can short-circuit the hard lessons for our partners, avoid the major risk factors above, and provide a sound strategy for modernizing their software.
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