Platform-based solutions enable innovation and speed to value in a rapidly changing insurance industry
Morristown, NJ (Oct. 18, 2018) – The digital era shift is realigning fundamental elements of business that require major adjustments from insurers in order for them to survive and thrive, according to a new thought leadership report released by Majesco, a global provider of core insurance platform software and consulting services for insurance business transformation. A new digital era of insurance focused on innovation and growth requires platform-based business models and solutions to succeed.
The report, A New Business Model for a New Era of Insurance: Digital Insurance 2.0 in the Platform and API Economy, highlights the impacts of the shift to a new age of insurance, Digital Insurance 2.0. Underpinning this new era is the shift to the application programming interface (“API”) and platform economy, which consists of key technologies such as cloud computing, open APIs, microservices, ecosystems, and data and analytics, which together help insurers create new business models, products and services, connect everything and, most importantly, create new customer experiences.
“The digital age shift is now top of mind for every leadership team and board because it is extending an organization’s growth and innovation capabilities,” remarked Denise Garth, SVP – Strategic Marketing, Industry Relations and Innovation for Majesco. “Insurers are increasingly looking to innovate new business models based in the API and platform economy, using a new technology platform that enables them to leverage broad ecosystems, technology innovations and new data sources to create a greatly enhanced customer experience. By doing this, they are rapidly solidifying their leadership position in a new era of insurance.”
While the insurance business model has been resilient over many decades, the digital age shift is highlighting the cracks and challenges, but also great opportunities. Foundational and fundamental elements of the insurance business are changing and will require major adjustments in order to survive and thrive. The increasingly rapid pace of InsurTech growth and investment, adoption of new technologies, growth of new startups and greenfields, shifting customer needs and expectations, and innovation is creating a continuous era of change and disruption.
“The modern core systems of the last 10 to15 years designed with the focus on internal processes, operational efficiencies and modest effectiveness are being replaced by next generation core systems that are customer focused,” said Manish Shah, EVP of Products at Majesco. “Value-driven ‘next gen technology’ transforms modern core systems into decomposed core components running on the shape-to-scale platform that leverage broad ecosystems and technology innovations including microservices, API, cloud computing, artificial intelligence, machine learning, and new data sources. This empowers insurers to shift from being the ‘owners of complex systems’ to ‘owners of customer-focused solutions’ with a greater technical agility and flexibility, digital fluency, innovation and speed to value, required in today’s pace of change.”
There is an increasing urgency to create new business models based on a new flexible technology platform to capture the tremendous value in terms of the growth and innovation they can deliver. Insurers must be able to do this in weeks or a few months, rather than years. Recognizing this, A.M. Best has indicated that they will be reviewing their methodology to consider including innovation explicitly in the rating process.
The thought leadership report is available to download on the Majesco website, or you can request a copy by emailing [email protected].
1. Insurers Agree Innovation Is Critical for Future Success, A.M. Best Company Inc. (September 24, 2018).
Insurance business transformation is a journey of change and revitalization, a renaissance of Insurance. Approximately 160 insurance companies worldwide in P&C, L&A and Group / Employee Benefits are transforming their businesses with Majesco’s solutions. Our market leading software, consulting and services uniquely underpin the entire insurance value chain and are designed to empower insurers with the agility, innovation and speed needed to meet their transformation opportunities. Majesco’s solutions include policy management, new business / underwriting, rating, billing, claims management, distribution management, BI / analytics, predictive modeling, digital platform with mobile and portal, testing services, cloud services, bureau and content services, transformation services, consulting services and more. For more details on Majesco (NYSE: MJCO), please visit www.majesco.com.
Cautionary Language Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of management, are not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in Majesco’s reports that it files from time to time with the Securities and Exchange Commission and which you should review, including those statements under “Item 1A – Risk Factors” in Majesco’s Annual Report on Form 10-K, as amended by Majesco’s Quarterly Report on Form 10-Q.
Important factors that could cause actual results to differ materially from those described in forward-looking statements contained in this press release include, but are not limited to: integration risks; changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters; technology development risks; intellectual property rights risks; competition risks; additional scrutiny and increased expenses as a result of being a public company; the financial condition, financing requirements, prospects and cash flow of Majesco; loss of strategic relationships; changes in laws or regulations affecting the insurance industry in particular; restrictions on immigration; the ability and cost of retaining and recruiting key personnel; the ability to attract new clients and retain them and the risk of loss of large customers; continued compliance with evolving laws; customer data and cybersecurity risk; and Majesco’s ability to raise capital to fund future growth.
These forward-looking statements should not be relied upon as predictions of future events and Majesco cannot assure you that the events or circumstances discussed or reflected in these statements will be achieved or will occur. If such forward-looking statements prove to be inaccurate, the inaccuracy may be material. You should not regard these statements as a representation or warranty by Majesco or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Majesco disclaims any obligation to publicly update or release any revisions to these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.
Best’s Special Report: Insurance Companies Across the Globe Recognize Innovation Critical for Future Success, A.M. Best Survey Finds
Oldwick, NJ (Sept. 24, 2018) – A significant majority of insurers understand that innovation is increasingly becoming a differentiator in the global marketplace, according to results of an A.M. Best survey of its rated entities on the subject. These survey results are part of an extensive A.M. Best special report on innovation, titled “Insurers Agree Innovation Is Critical for Future Success.”
A.M. Best believes innovation is needed as the insurance industry rapidly changes and new risks emerge that require up-to-date service processes and coverages emerge. Nearly nine out of 10 respondents from more than 450 insurance companies globally said that innovation was moderately to extremely critical to their organization’s success. Key reasons for innovating varied, but most companies said they wanted to better address customers’ needs (22%); to gain a competitive advantage (21%); or to realize operational efficiencies (16%). At the same time, more than half of the respondents’ companies have allocated between 1% and 5% of their budgets toward innovation, while 17% of insurers have allocated more than 5%.
“As the pace of innovation picks up, insurers who do not innovate successfully may have to contend with adverse risk selection,” said James Gillard, managing director, credit rating criteria, research and analytics. “Other challenges owing to significantly higher expense ratios compared with companies’ more innovative competitors, or lower growth because more innovative peers may have access to lower-risk customers, are distinct possibilities as well.”
Companies also were surveyed on the challenges innovation can help them overcome, as well as the technologies in which they expect to invest. Other sections in the report examine key trends that are expected to impact the major industry sectors in the near to midterm, and identifies implications for the industry and for future operational and policy initiatives:
Respondents from each of the primary industry sectors shared similar views on innovation; however, their segment-specific concerns colored survey responses to questions regarding their innovation strategy, process and implementation;
Despite barriers to achieving progress, companies in emerging regions responded that they see innovation as even more vital, compared with responses from developed regions, as it can give them an edge in penetrating markets faster and fill a niche that currently is not being met; and
The use of artificial intelligence, big data, Internet of Things, cloud computing and blockchain technology all have the potential to reshape the industry’s value chain, but are experiencing differing levels of acceptance in the insurance industry. The adoption of blockchain in particular faces a more difficult hurdle than the other technologies due to its current narrow usage.
Other report sections focus on the impact of innovation on regulation, as well as answers to frequently asked questions regarding A.M. Best’s innovation initiative. As a next step, A.M. Best will be developing a new criteria procedure focused on evaluating innovation and also will be reviewing where a more explicit assessment of innovation fits into Best’s Credit Rating Methodology.
To access this special report in full, please click here.
About A.M. Best
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. All rights reserved.
SOURCE: A.M. BestTags: A.M. Best, API, Digital Insurance, Majesco, platform