Legacy technology turning leaders to laggards – www.computing.co.uk

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Legacy technology turning leaders to laggards
The last few years have been marked by moments of major socioeconomic choices with a seemingly black or white outcome. From Brexit, to the vaccine programme and now our decisions at COP26: all are moments that have proved both divisive and provocative to both sides of the debate.
You’d be forgiven for thinking we’ve lost sight of elements that unite us all, of which there are many. Not least two sectors that we all interact with on a daily basis – technology and motoring. 
So much of our lives have been impacted by the pandemic, and motoring has not escaped what has turned out to be a massive force for change. Not only has driver behaviour altered, impacting vehicle usage, but technical innovations in many areas of life have led to higher expectations in interaction and service from customers. The combination of these factors is blurring the line between technology and motoring, and creating a burning platform for change that the industry must react to.
This is especially the case in insurance. While it may not be the subject of dinner party patter, it is a mandatory element of how we move around in our vehicles, which is returning to prominence after a period of pause and restart. It presents a genuine opportunity to bring technology and motoring together to encourage innovation and provide a better service to customers – all while changing driving habits that will have an impact on everything from air quality to premium prices. It means the insurance industry is facing multiple issues at once. Existing technology and pricing models need to change, while compulsory use of telematics based on behaviour and use are inevitable and have to be factored into the mid and long term future of the industry. 
Collecting vehicle usage data will have a global value of $3.5 billion by 2026, according to research by Valuates Reports. The combination of improved technology, societal acceptance and a desire by all parties to improve our environment, air quality and roads means mainstream adoption is a case of ‘when’, not ‘if’. This is also aided by a wider societal acceptance around individual information sharing to improve services for the majority. Something like CityMapper is a great example.
The combination of these factors means that real-time sharing of vehicle usage data and driver information is at the base of a ‘hockey stick’ growth trajectory, precisely because its applications can be both vast and positive. For example, it can be used in everything from encouraging users to drive less, or at different times of the day, to helping businesses evaluate the level of emissions their fleets produce and make decisions that would allow them to reduce their carbon footprint. The fact we’re just closing COP26 is coincidental. We already have the technology to encourage environmental sustainability from commerce, consumers and insurers – it just needs universal adoption.
It would seem the motoring world is in the fast lane as far as technological advancement is concerned. But it’s not. Unfortunately, the technology stack for businesses within the insurance space is not moving at the same pace – nowhere near, in fact. They are beset by legacy systems and a substantial backlog of customer data, which means they’re swimming against the tide when it comes to achieving the levels of service that digital natives expect. On the flipside, new tech start-ups are emerging with no legacy systems to hold them back and agile digital models that embody the ‘anywhere, anytime’ philosophy consumers expect.
There was a time when firms could upgrade by simply replacing their old legacy systems with new ones – a process that would cost millions and take years to implement. However, those days are over. The legacy model is incompatible with the new fast-paced, on-demand world we live in today.
Large swathes of the population manage their lives on mobile devices, doing everything from banking to baking remotely. It has thrust excellence in digital execution to the forefront of business strategy, and those that don’t have it are falling way behind. 
The insurance industry falls remarkably short of other industries, particularly in financial services, when it comes to technology investment. But the sector is at a tipping point. Businesses must have the ability to create best-in-class customer applications, tailored to each policyholder, which helps them manage their cost and environmental impact, as well as control their digital experience. In this day and age, there is no shortage of talent, vision and drive – either inside or outside the sector – when it comes to individuals with the skills in machine learning and AI modelling to deliver rapid change
This is where the adoption of usage-based insurance (UBI) policies can bridge the gap. It’s an offering insurers can make without having to overhaul legacy technology at all. In fact, UBI is a plug-in and play system, and works by adding tools to an existing tech stack. Any industry making a leap into the technological unknown is, understandably, beset by fear, inertia and uncertainty. But for the motoring insurance sector, it is inevitable. UBI is the ideal way to transition from today into tomorrow without the financial gamble.
In today’s fast-paced business environment, companies are measured on their ability to adapt to the digital marketplace, as well as changing consumer habits. However, legacy systems still represent a wealth of valuable customer and business data, so they cannot be ignored or abandoned.
The smartest enterprises will overcome the digital disconnect by redeploying their resources to capture and consolidate this legacy knowledge, while investing in next generation technology infrastructure. Doing so will enable companies to adapt to the ever-changing habits of the consumer, while ensuring the motoring and insurance sector plays its role in our drive for a cleaner, greener future.
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