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Opinion: How to choose the right technology

Toby MacLachlan

The benefits and types of technology available to brokers are well known but how to choose the right fit? Ignite’s Toby MacLachlan shares his expertise

Sometimes it’s hard to be a broker. It’s tough enough securing good capacity and quality staff, there is perpetual talk of the importance of new technology. Brokers are experts in broking – the business of distribution, pricing, and administration – not technology. Unless they want to become experts, they need to rely on partners to deliver quality systems for them. Picking the right suite of technologies is challenging because there’s no Martin Lewis for doing so. But the process need not be as daunting as it might seem.

Blame game

Brokers are often blamed for being digitally slow on the uptake, interacting with customers only over the phone, and not having a wide enough array of insurer facilities. This is an unfortunate stigma that simply isn’t true. They would love to have a toolkit of digital products, chatbots and self-service customer portals, and easy access to dozens of seamlessly interlinked insurer facilities. Brokers understand the benefits, they just can’t get access to the products they want and need. The fault in fact lies with legacy software houses that have rested on their laurels too long and failed to provide the digital tools or insurer integrations that brokers want. Mark Rigby says, “Software houses ultimately control the market”, and brokers need to break these handcuffs.

Choosing

There is an array of good technology options out there for brokers. It is true that a “powerful scoping document” is critical to choosing the right tech partner. Some brokers employ consultants to choose a software provider, but their process tends to boil down to this simple maxim: decide how you want your business to run and find a software provider that can evidence the solution. Brokers only need to be expert in their USPs, what they can automate, and their ambitions. The software providers should come armed with out-the-box solutions. The best choice is therefore the best marriage of what the broker wants and what technology comes out of the box.

Ecosystem

Ignite knows the benefits and pitfalls of technological change as well as any. But even an end-to-end policy administration system is the centre of a much larger ecosystem of technologies for the insurance broker. Ignite brokers use external chatbots, telematics, and extensive data enrichment technologies by being the centre hub that connects our core policy administration system to dozens of third parties representing cutting edge innovation. The market has changed, and the process of enabling technology is one of selecting the right mix of providers, rather than one monolithic central system.

Service array

Many traditional brokers use phone-based systems and believe speaking to the client is key for success. It is surprising that some of Ignite’s most notable digital successes have come in product lines such as classic car and motorhomes with traditionally older audiences where end clients may choose their preferred of service. Chatbots including live chat are simple plugins that all brokers should consider, but self-service is something many legacy houses struggle with so new technology would be required to achieve its benefits.

Warning signs

Software projects are perceived as a big business risk which can be mitigated though project plans, clear lines of responsibilities, and collaboration. Choosing a provider that can become a trusted partner is better than choosing promises. Any software provider that says ‘yes’ to building everything should be a flag for concern. Insurance software is complex and 95% of the project needs to come out the box to have a reasonable chance of success in sensible timescales. Insurance seems simple from the outside and a concept is often very different to the reality of a live solution.

Benefits

Some benefits of technology are well known such as lower operational costs and better client retention. There are also more subtle benefits that have appeared over the years. Staff retention and engagement greatly improves after implementing a new system, with staff left feeling that management are investing in their skills, giving them better tools to do their jobs with less repetition by involving them in the change process.

Cost

The respondents in the features mentioned the cost and business risk of changing their core platform. This is a misconception these days. Mid-sized software houses such as Ignite are much cheaper than the legacy alternatives, and through more modern technology require much less time and cost to implement. Brokers with existing books of business can expect minimal cap-ex and results delivered within three to six months.

Is there a need to change?

Brokers must always adopt new technologies in order to differentiate, survive and thrive. This may seem conceptually ideal but insurmountable with a legacy core platform. If brokers can establish a core platform that enables and encourages as many integrations as possible rather than being a closed unit, they will have taken a great step in the right direction. Sticking with a legacy core system is not a long term solution, for as someone once said: “you can’t make a butterfly out of a caterpillar by gluing on wings”.

Toby MacLachlan is MD of Ignite Software Systems

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