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Insurance buyers face everyday pressures in mitigating and transferring risks through insurance products. Unfortunately, some technology platforms that insurers use to underwrite and distribute new products make it more challenging to get needed solutions to the market. Using the right technology, however, can make a positive difference — not only for insurers but also for their customers, agents, and brokers — and drive insurers to better speed to market, product distribution efficiency and flexibility, and product innovation.

Speed to market is critical for insurance companies to differentiate and respond to customers' evolving needs. Emerging and re-emerging risks offer the opportunity to create new insurance programs, with innovative policy forms. Cyber, cannabis and flood exposures are a few examples of coverages that previously were minor offerings, if indeed they were even available, but these are becoming major product offerings.

Existing technology systems tend to be tightly calibrated to individual lines of business. They can work adequately for standard risks, but they do not offer enough flexibility to efficiently develop and distribute new and specialized products. Putting together new policies by assembling coverages should not require teams of information technology experts. It's simply not cost-efficient to create and IT project every time an insurer, managing general agency or program administrator introduces a new product. 

Product innovation is only one part of the equation, though. To get new risk solutions to market also requires that insurers make it easy for agents and brokers. If distribution channel partners' systems can't communicate seamlessly with insurers' platforms, agents and brokers will gravitate to insurers with which they can more easily do business.

Barriers to product innovation and delays in offering buyers enhanced solutions for their risks is not the way to achieve profitable growth in insurance. Fortunately, there is a way to solve these problems.

Key features

Insurers, MGAs, and program administrators should look for a few key features in underwriting and distribution platforms that make it easy to: build and customize products; automate rating, quoting and binding processes; and create a smooth flow from underwriter to agent/broker to policyholder. These features include:

• Cloud-based hosting. Cloud hosting, such as that offered by Amazon Web Services, has proven effective as a secure and scalable way to deliver software. Insurance software that is hosted in the cloud is far more scalable and flexible than hosting on proprietary servers, which need either in-house or outsourced IT teams to maintain. Implementing and updating underwriting software occurs faster and more easily using the cloud.
• API architecture. When the software's backing engine is designed to operate as a low-code or no-code environment, application programming interfaces (APIs) serve as building blocks for customized policies and processes. APIs significantly accelerate connections between systems and enable insurers to develop innovative products faster and distribute them through agents' and brokers' systems at scale. Without APIs, custom-built interfaces are necessary, which are not only expensive but also time-consuming to build.
• User interface. Underwriters should look for interfaces that are user-friendly and created expressly for insurance operations. For example, the platform should allow underwriters to rate products anywhere at any time, apply customized business rules, process quotes, edit and manage business forms, push policies to any distribution system, and view transactions in real time. With tools to configure the interface to the individual business, an underwriter can get the job done easier, faster, and more accurately.

When Henry Ford was asked what led him to build cars, he famously answered: "If I asked my customers what they wanted, they would have said, "A faster horse." Today, the right technology in insurance can accelerate modernization, advance product innovation, and support sustainable, profitable growth in offering risk management solutions.

Whether you're a managing general agency, a program administrator, an insurtech startup, or a veteran insurer, the right technology can transform your insurance business. For more information and to learn how, please visit www.clariondoor.com.