How to respond to rising inflation in a time of digitalisation
Inflation is rising across the world, impacting all of us as individuals and putting greater strain on businesses and their operational plans for the future.
For the insurance industry, this raises a familiar question now painted in a new urgency: should I migrate my business to a full-suite digital solution and away from legacy in-house solutions, or wait until inflation drops?
In this article published by procontra, Michael Pickel, member of Hannover Re’s Board of Management, predicts that prices in motor insurance for the German market would have to rise by ten percent in 2023 just to cover the costs of inflation. For residential building insurance, Pickel expects an increase of a good 15 percent.
This means that insurers will have to significantly raise their premiums and pass on part of the additional costs to end customers.
But how else could insurers tighten their belts to realise cost reductions and better absorb rising inflation costs while maintaining the ability to be competitive and future-fit?
Instinctively, you might be inclined to answer that it is best to wait and ride out peek inflation before making the jump to digitalisation, but in the short to long term this strategy does not serve insurance companies and their long term success in any meaningful way, and will almost certainly continue to hinder business operations.
The answer is Digitalisation
Running custom, in-house legacy systems has always been expensive, time consuming and demanding of specialist talent who are required to continuously service and maintain such systems. The running costs for these custom-made solutions are high, and they will get much higher in times of inflation, without adding any additional value to your business or keeping your operation future-fit and agile.
The answer to the question “When is it best for my company to move away from legacy and into digital” has always been “Yesterday”. This remains as true now during times as inflation as it ever has. Legacy systems do not possess the agility to adapt to our changing world, and therefore vastly limit the sort of products and services, and the price points, insurers that stick with these rigid systems can offer.
Delaying a move to digitalisation therefore serves no operational strategy, and only delays the inevitable outcome that such a business will be unable to compete in the market place today and in the future. Therefore, insurers must continue to march forward and embrace the future of digitalisation.
For if not now, when?
Keylane’s Axon platform
Axon is Keylane’s all-in-one, future-fit SaaS administration platform empowering trust and operational excellence for Property & Casualty insurance companies. Axon has clear, smart and intuitive workflows coupled with pre-configured business rules that remove the pain points and time-sinks from your claim handlers’ task lists. In short, Axon is designed to maximise output and minimise employee frustration and duplication of tasks.
Axon supports the front, mid and back office processes during the lifetime of policies and claim reports. This all takes place in one system, supporting all channels: internet, extranet, intranet and web services. Make use of 100% web-based software in a secure private cloud environment that fully integrates with your own application landscape. An ISO 27001 and ISAE3402 certified environment that is robust, scalable and secure. No need to worry about installation, configuration, performance, upgrades, maintenance or disaster recovery. We take care of it all.
Test drive Axon today
Experience Axon for yourself today. Simply fill out this contact form and request an extended demo and we will happily show you how Axon works to take away many of the problems facing the industry today.