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Looking to digitize? Keep an eye on your back end.


March 29, 2018   by David Gambrill


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Insurance companies have made it a priority to modernize their operations to connect with their customers digitally, but all the work they have been doing may be tilting too far in the direction of acquiring customers, one senior Canadian P&C executive says.

“When I see where people are spending, and what they are spending on, I see it very heavily tilted on the front end,” on the customer acquisition side of the business, said Sharon Ludlow, who spoke to Canadian Underwriter Wednesday upon joining the board of directors at EIS Group. “What’s more appropriate, in my view, is a much broader view across all of the technology in an insurance company.”

Sharon Ludlow has joined the board of directors at EIS Group.

In addition to front-end customer acquisition, including a CRM (customer relations management) system, other insurer functions requiring technology updates include policy administration, billing, and claims systems. To be successful, insurers need to make sure their technology updates are balanced across all core aspects of the business.

“Digitizing the back end is the place where you will leverage all of the benefits of the front end, because you have to have the platform and the communication between all of those aspects in order to get the best benefit for the insurers and the customers,” Ludlow said.

“You actually get [the benefits] across your end-to-end value chain in the company, and therefore you are servicing your customers and potentially acquiring your customers faster — all of those good things. It makes for a much more efficient process and a much more profitable insurer in the long term.”

Ludlow is head of insurance investment strategy at OMERS, as well as a past president of Aviva Canada and Swiss Re Canada. She was recently welcomed into the board room of EIS Group, a global core and digital platform provider for insurers. Based in San Francisco, California, EIS Group offers technology services to Desjardins General Insurance and Alliance Industrial in Canada, among its Canadian clients.

In an interview, Ludlow cited a Deloitte study that suggested that almost one-third of 1,400 insurtechs offered some kind of front-end insurance solution. “When I step back and look at that, I think, ‘Wow, there’s a balance there that needs to be titled a little more broadly across all the aspects of the value chain.”

How much work needs to be done on the back end?

“A lot,” Ludlow replied. “Not all companies are looking across every element and upgrading them at the same time. Very few, for example, started with the premise that we should put all of this in the cloud. If you start with that as your premise, ‘If we do this in the cloud, and we are going to do this on a modular basis,’ you will find that the end solution will work seamlessly together.”