A well-timed prank on April Fools' Day can bring plenty of laughs. But what's far less funny is the way some carriers, brokers and MGAs have been fooled in the past by technology solution providers that overpromised and underdelivered. You can't blame well-intentioned IT leaders for their widespread skepticism. Too many have fallen victim to "tricksters" who sold them on seemingly simple solutions that in reality were complex to implement, carried numerous hidden costs, and left them powerless to extract and use their own data. While nobody likes to feel like a fool, there is an upside to these past experiences: Today, carriers, brokers and MGAs better know how to steer away from hoaxes and choose modern insurtech solutions that will fit their business goals and provide a more realistic ROI. |

Not a fool's errand

A decade ago, IT leaders had limited options for revamping their core systems. Most of the available systems were expensive, all-or-nothing solutions that could take years to implement. Developers had to do all the work. Changes had to go into a queue and could take weeks and often months to complete. Upgrades, even the simplest ones, could cost hundreds of thousands of dollars and sadly all too often, even millions of dollars. Those costs don't even include time for user acceptance testing or staff training on the new version. Then, about five years ago, savvy insurtech startups burst onto the scene. They brought with them a great promise: More agile and affordable solutions that could easily integrate with legacy systems so carriers, brokers and MGAs could boost their back-office efficiency. Many startups created amazing solutions fueled by innovations such as AI and machine learning. Yet, because they were born within the pressure-packed startup environment and some early insurtech companies began overpromising. Many IT leaders saw the same solution provider patterns: overpromising, albeit with a fresh new look. The good news is many of these startups have matured and most of the pranksters who failed to live up to their own sales pitches have fallen to the wayside. In their place is a proven group of later-stage startups that have achieved product-market fit and raised later-stage funding (series B and upwards), demonstrating not only product-market fit, but scale and company resilience. What's more, as early insurtechs achieved spectacular growth, some of the most proven market players are now following their lead. EY, for example, has launched Nexus for Insurance, a digital ecosystem solely based on insurtech platforms, designed to help companies launch new products faster and enhance the customer experience. When global systems integrators like EY and others introduce these types of solutions, it's safe to conclude insurtech is far from a prank. |

Overcoming implementation hurdles

Implementation costs and learning curves represent high bars for IT leaders who are evaluating insurtech purchases. But here, too, innovation has helped to break down some of those barriers and help companies achieve value faster. For example, top insurtech solutions today are (ideally) built on no-code platforms. This helps to dramatically reduce the learning curve for carriers and MGAs and accelerate implementation timelines. Their open architecture and design focusing on interoperability safeguards insurers from being, as in prior core system selections, locked into a single platform provider calling all the shots on with whom they will integrate. That flexibility not only offers reassurance for the future by not needing expensive upgrades, but it also ensures speed to market because the learning and implementation curves are dramatically reduced. For example, at my company, INSTANDA, the average implementation can be completed in two-to-six months. |

Seek the deeper meaning

While most people think of pranks on April Fools' Day, April 1 also carries a deeper meaning: renewal and rebirth. To that end, brokers, carriers and MGAs who have shied away from tech purchases because they have been burned in the past would be well advised to look at modern insurtech products with a renewed perspective. Now is as good a time as they will find for modern platforms, proven and scaled, that will help them make real business improvement and leaves them looking savvy rather than playing the fool of days gone by. The above slideshow offers tips to make sure insurance companies "won't get fooled again" while navigating the current technology marketplace. Tim Hardcastle is the CEO of INSTANDA, which provides insurance software solutions for carriers, MGAs and brokers. Prior to joining INSTANDA, Hardcastle served as a chief information officer for Hiscox PLC. He can be reached at [email protected]. Opinions expressed here are the author's own. Related: |

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