How a Greenfield Approach Addresses the Top Three Challenges for Insurance Carriers

Paul Karam, Master Principal Solution Architect, Oracle Financial Services

A consensus in the insurance space is that insurers are eagerly moving into a new era of tech-enabled systems, digital enablement, and heightened customer-centricity. However, along the way, they are forced to grapple with the inadequacies of traditional models and legacy systems that they had previously relied on. So how should insurers handle the gaps in the market for new products and services that legacy systems cannot sustain? The answer is adopting a from-scratch digital ecosystem with the greenfield approach that enables carriers to adapt quickly to changing regulations and market demands, scale by taking full advantage of modern cloud infrastructure, integrate with an open integration framework of APIs to benefit from the latest cloud services, and innovate by enabling actuaries and product leads to roll out new products with their respective underwriting guidelines fast and effectively.

The greenfield approach is different from a direct migration from legacy systems. The technology is developed from a clean slate with no complicated code and thus no restrictions or dependencies. For companies running on costly legacy systems with lagging speed to market for products and services, greenfield initiatives can create an open environment for interaction with insurtech’s/fintech’s access to innovative technologies. For most companies, a strategic way to leverage the greenfield approach is to start in the back office with new technology platforms optimized for the cloud and not tied to aging infrastructure. Taking an Minimum Viable Product (MVP) approach with greenfield characteristics in selecting your future policy administration system (PAS) will enable carriers to reduce the risk from big migration projects. Migrations can follow in the short or long term by ensuring the right target platform has been selected for the organization's future needs after a successful greenfield PAS selection and deployment. Finally, as organizations & insurers start to plan a shift to the cloud of their mission-critical workloads, the greenfield approach will provide a straight path to the cloud with a digital-first strategy for the front and back office.

Top three challenges for insurance carriers that a greenfield approach will help address:

1. Speed to market challenge

For insurers, staying ahead of the competition translates to continuously redefining the customer experience with new multi-channel and mobile-enhanced services. Additionally, insurers need to innovate their product and service offerings technologically and swiftly introduce them to the market. A greenfield initiative with its no-dependency, no-strings approach makes implementing such changes and updates in products and services much easier.

2. Digital experience challenge

Moving to a single digital framework for all back-office processes is a must in the current competitive environment. This means shaking off the legacy mindset and processes supported by complicated code and requiring staff with specified knowledge. With a digitally enabled greenfield approach, insurers can offer their customers value-added, contactless, and mobile-enhanced services to stay ahead of the competition.

3. IT cost challenge

Insurers are constantly looking to offer customers optimal solutions at a significantly lower cost. Unfortunately, the operation and maintenance of legacy systems fall into rigid cost structures while not supporting swift speed to market. The greenfield approach can reduce IT costs by adopting a new agile core platform, digitization, and straight-through processing.

Adopting a greenfield approach for your digital-first strategy

Possibly the greatest benefit of the greenfield approach is that your systems, products, and services no longer need to be underpinned by existing infrastructure. This creates a shift in company culture, mindset and faster innovation with new tech-enabled platforms. Additionally, leveraging cloud-based systems can scale the business as it grows in volume. But along with the excitement surrounding greenfield, there are key aspects to consider regarding company readiness.

Moving to a greenfield approach for a digital-first strategy requires complete stakeholder buy-in and a shift in company culture. Some aspects to consider before making the leap:

While these questions need to be carefully considered, there is no doubt that the greenfield approach can offer limitless possibilities and opportunities to innovate for any insurer and provide a direct path for migration from legacy to the cloud.

  • The greenfield approach requires significant evaluation and testing. Is your organization ready to take on a learning mindset to adopt a new policy administration system (PAS) with a steep learning curve?
  • A digital-first strategy requires a change in technology and company culture. Does your organization have the necessary tools for education and guidance?
  • Insurance is a naturally risk-averse industry. Is your organization ready to invest in cybersecurity?

Oracle can help carriers build consensus and align on the value of key business capabilities, benchmark these capabilities for best practices, and show the value of investing in a greenfield deployment on our PAS platform. In addition, our team can help IT and business leaders create a Case for Change, identify key enablers and relevant business impacts tailored to insurers with challenges rising from existing legacy systems.