July 2020CIOAPPLICATIONS.COM9API Management and DevOpsA review of recent InsurTech startups reveals that most of them are working on a narrow niche. They are trying to solve a specific problem using cutting-edge technologies. As InsurTech provides focused solutions for specific problems, integration could be a lot easier if there is an API Management layer in place. Unless a legacy modernization strategy is based on the deployment of a large do-it-all system--which I recommend against--an API Management layer is critical to legacy modernization. It will not only make integration of best-of-breed (or best-fit-for-purpose) systems easier but will also add agility for the future. As any one of these systems becomes obsolete, a new one can be integrated with ease. In addition, DevOps will reduce the cycle time to implement new solutions in production. It should not take an 18-month project to adopt an InsurTech innovation. With time, not all startups will survive. If you were an early adopter of an InsurTech that could not "cross the chasm," an API Management layer and DevOps will allow you to replace it quickly and inexpensively. Data LakeThere are a significant number of InsurTech companies developing ways to leverage data to provide solutions. These include innovative ways to use data to underwrite risk, develop new products, rate risk, and identify fraud among others. Such solutions, if reliant on your data, are only as good as the data itself. It is important to create a Data Lake of policy, billing, claims data and key transaction events as a part of legacy modernization with a somewhat defined approach to utilizing this data. Data Lakes are easy to build. InsurTech would help you leverage this data with ease and will avoid your Data Lakes from turning into "Data Swamps" (unused or unusable Data Lakes). BPM and DigitizationThe insurance industry has been paper heavy for decades. Regulatory requirements and processes that were developed years ago still rely on paper. Most insurance companies keep a lot of paper in their offices or at an archival facility. A legacy modernization strategy must include digitization along with the implementation of a Business Process Management (BPM) layer. If digitization of old records turns out to be expensive, it would make sense to move to the digitized world for only new business and renewals. As InsurTech develops new paradigms to conduct business, radically changing current business processes, a flexible BPM layer will allow insurance companies to adopt such solutions with ease. Backend digitization will allow companies to leverage new technology trends such as machine learning, artificial intelligence, IoT, and advanced analytics. InsurTech is more than just hype--it provides real value to an industry segment that has traditionally lagged behind others in the adoption of technology and innovation. It is changing insurance dramatically. It is only a matter of time before today's naysayers and laggards will be extinct from the marketplace as InsurTech companies evolve and enter the space. Companies with legacy technologies must act, and do so quickly. Legacy modernization will not only help them stay relevant in this new age but will also allow them to flourish and grow. Brahm SharmaAs InsurTech provides focused solutions for specific problems, integration could be a lot easier if there is an API Management layer in place
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