Five Reasons an Industry Platform Is the Right Choice for P&C Insurers
What is an industry platform and why is it such a big idea?
It’s clear the technology landscape in P&C insurance is becoming a “platform market.” Participants know the market used to be for modular applications designed along functional lines (claims management, policy administration, insurance billing software and systems). The next phase was the market for integrated suites including core operations, data and analytics, and systems for digital engagement. The third phase, recently begun, is the platform phase, evidenced by commentary such as this from Celent’s Donald Light. So what is an industry platform? And why should you care?
I’ll start to answer that question by outlining what an industry platform isn’t. It’s not merely a developer toolkit, a fabric upon which engineers can develop. Instead, an industry platform for P&C provides the foundation that insurers can rely upon to run, grow, and differentiate their business. This is a business-centric rather than technology-centric definition. It is a big idea that reshapes the division of labor between insurers and the companies that serve them, accelerating value generation in our industry, and ultimately equipping insurers to adapt and succeed over the long-term.
An industry platform unifies three elements: software, services, and ecosystem. By software I mean the applications provided by the platform host to support the insurance lifecycle. Services include implementation services by the platform host and its system integrator partners. It also includes support and operational services to support insurers post go-live, increasingly via the cloud. The third element, an ecosystem, provides access to value-add applications and content provided by established companies and InsurTechs.
Why is an industry platform the right answer?
Why do we think an industry platform is the right answer? The rate of change in P&C is remarkable and will accelerate further in the years ahead. Customer expectations keep rising. Many new insurance relevant data streams and digitally native business models are emerging, sometimes from new entrants, and non-insurance players. New areas of risks such as supply chain disruption and cyber terrorism represent new underwriting opportunities.
There are many other examples of change offering significant opportunities and posing threats to insurers, which poses the question of how should insurers respond? In our view, here are the five imperatives facing insurers that make an industry platform the right answer for the P&C industry:
Improve operational performance
+ Platforms enable the improvement of operations across the insurance lifecycle. I’m referring here to incremental improvements to processes such as product definition, claims management, and customer service.
Increase engagement with customers
+ On top of improving internal and customer operations, platforms also increase engagement with both customers and agents by providing personalized products and responsive, omnichannel service.
Enable smarter decisions
+ With the ability to pull and analyze customer data and analytics, P&C insurers are able to make smart, data-driven decisions and better understand, model, and price new and evolving risks.
+ By providing a platform that enables the rapid ideation, experimentation and deployment of new products, expansion into new regions or partnership with InsurTechs.
+ There is the desire to simplify IT, reducing the complexity of necessary but undifferentiating work that slows insurers down, and reduces ability of IT to focus on being a strategic partner to the business.
The best way to enable these imperatives, from our perspective, is to provide an industry platform that our customers can rely upon to run, differentiate, and grow their business. This belief requires Guidewire to re-imagine our role. Rather than being a software vendor, we are elevating our sense of responsibility to be more deeply accountable for ensuring the success of our customers, we are accelerating our use of cloud to provide increased agility and predictability of cost to our customers, and we are accelerating our work to curate and enable partners to add value for our customers. I believe the outcome for our customers is that they will have increased ability and freedom to focus on the business of insurance and to achieve their mission. This is very motivating when one considers the critical role P&C plays in enabling society to function.
We believe we have the credentials to succeed in our goal of being the industry platform for P&C. We also appreciate the hard work and creativity required to succeed. To learn more about Guidewire’s mission and industry platform journey, click here.