Don’t take a risk with your next digital partner
Insurance brokers are in need of robust and innovative IT, but too many are taking a risk on something outside their comfort zones, writes Quotall Founding Director, Steve Sherlock.
While other industries have adopted new technology for interacting with customers in the 21st century, much of the insurance sector will play safe and stick with what they perceive to be the tried and tested, and some will gamble on the cheapest option. Both will probably miss the opportunity to transform their insurance distribution.
Choosing a new system for your business is essentially an IT project, and they have one of the highest failure rates across industries, so managing risk when choosing a new digital partner is essential. This isn’t recognised in the insurance broking community. Some experts reckon that only 29% of IT projects are a success while 19% are “utter failures.”
IT risk management
The major reasons we see Insurance IT projects failing are:
- a lack of strategic planning, scoping and defining of requirements
- a lack of experience in terms of software and technology as much as running a project
- and a lack of risk management.
Brokers can mitigate much of the above by working with an experienced insurance software partner and choosing a platform which does what they need out of the box, in other words, avoiding the need for any software development.
The conversation about a technology upgrade often starts well enough. There is usually general acknowledgment that something as fundamental as an online portal for e-commerce is necessary for the business to find and attract new customers. But more often than not, the discussion then becomes less and less about strategy and business process improvement, and more about price.
The cheapest system frequently wins, regardless of whether it meets the business’ needs, the risks involved and the expertise it will require to implement from insurance practitioners unfamiliar or uncomfortable with IT. This can lead to costly failures.
And this is particularly true if brokers opt for the sort of system that provides basic initial functionality, but will require their team to develop and tailor it to the business, market it effectively to their customers, and continue to maintain it later without support.
A cultural shift
Maybe this could be so much less painful if brokers and traditional insurance distributors adapted their business thinking to fully understand their ‘new world’ requirements? Perhaps – culturally – they simply haven’t grasped the need to seek out a CTO, or similar experienced person, to drive their IT project?
To illustrate, Markerstudy is one the biggest MGAs in the UK, having bought Co-Op Insurance this year. The company undertook a two-year research process into its e-commerce needs, before replacing its entire commercial insurance IT suite with Quotall’s platform.
Out of the box e-trading
Our mission is to get brokers and MGAs to think differently about the technology they need, how they access it and the opportunities it can afford their business, without busting any budgets. One of Quotall’s USP’s is that our platform is tried and tested – we already provide advanced but cost-effective insurance platforms and marketing support for leading insurance businesses and affinity partners.
Our cloud-based system can get you e-trading straight out of the box, with the option to scale the service to suit your business perfectly.
So here’s the thing. Insurance is at its heart the business of managing risk. It prides itself on understanding risk through talent and expertise. We think it’s time companies extend that ethos towards IT investment, rather than gambling good money after bad in a rapidly developing area. Better to work with with an expert partner and ‘buy’ a tried and tested solution rather than ‘build’, and increase the chances of your next IT project being a success.