Paul Karam, Master Principal Solution Architect, Oracle Financial Services | July 30, 2023
According to the Insurance Global Market Report 2021, the global insurance market is expected to reach $6.39 trillion in 2025 with a compound annual growth rate (CAGR) of 6%. To secure their stake in this expected expansion, insurance carriers must make legacy system modernization and the adoption of agile solutions a top priority. This will enable them to keep pace with market changes and meet ever-evolving customer expectations.
Many insurance carriers still struggle with rigid legacy core systems that lack API compatibility and agility. These systems simply aren’t designed to handle the demands of today's fast-paced, data-driven insurance industry. Carriers feel the impact across their business, from slower speed to market for new products to customer attrition to rising operational costs.
It's time to consider a new strategy—a greenfield approach to modernization that enables insurers to achieve greater success and gain a competitive edge in the market. SaaS technology—which speeds time to value while reducing costs and risks—is increasingly essential to this approach.
Greenfield versus traditional approach to policy administration modernization
Traditional modernization approaches, which involve migrating data and retiring legacy policy administration systems (PAS), are complex, expensive, and lengthy—often requiring years to complete.
In contrast, a greenfield approach involves standing up a new product from day one on a new PAS. The old PAS continues to house the legacy policy data—which greatly reduces the effort required to get to market with a new product. The carrier can continue to manage existing policies on the legacy PAS and can migrate legacy data later, as part of its overall digital transformation strategy.
Greenfield accelerates time to value and reduces costs
Compared to traditional modernization methods, greenfield development enables carriers to realize value faster and at a lower cost.
A greenfield strategy for PAS modernization liberates insurers from the limitations of current infrastructure, enabling them to rapidly introduce novel products and services to the market. In many instances, carriers can launch these new offerings within a few months, giving them significant flexibility to react to changing customer preferences, market trends, and regulatory requirements.
Keys to success for greenfield modernization
The key factors for successful greenfield modernization lie in its foundation. Greenfield software development involves starting anew, devoid of any legacy code, which facilitates a fresh start without constraints. This approach suits executive-sponsored projects that aim to rapidly introduce modern, consumer-friendly insurance products, while avoiding the expenses tied to upgrading legacy platforms. Embracing cloud-based end-to-end policy administration systems, commonly with pre-built products and features, empowers insurance carriers to efficiently increase premium sales and overall profitability.
Oracle Insurance supports a greenfield approach
Oracle Insurance is at the forefront of enabling this type of greenfield transformation, offering industry-leading SaaS-compatible applications that are unmatched in agility and adaptability.
When deployed as part of a greenfield approach, our PAS solution empowers insurers to rapidly develop new products, gain valuable data insights, and achieve faster speed to market. Our innovative solution also provides unparalleled flexibility, enabling insurers to easily create and manage complex business rules and processes while delivering a streamlined and simplified customer experience.