Old, bespoke IT systems are costing the insurance industry a third to a half more than they should, with standardisation the key to driving down costs.
That is the view of Michael Graham, sales and marketing director at Sequel, who argued that “now that the business of insurance has become increasingly standardised and embraces modern management methods, old-style bespoke systems have become a liability”.
“Costs spiral for those who have chosen the non-standard route and they are struggling. Over time you need an army to maintain such systems and you have to keep on spending just trying to catch up with current market challenges. And over time bespoke-based firms become increasingly exposed to risk. Control of their software is in hands of the few who wrote it – and they can all too easily disappear,” explained Graham.
Graham said that companies are increasingly looking to unshackle themselves from ageing bespoke systems. “Modern standardised insurance software offers powerful, flexible and compliant systems. By choosing the modern option firms gain the great advantages of having the right tool for the job and making significant savings that can be invested in new business development,” he said.
IT, insurance, reinsurance, Sequel