If you want to get ahead of your competition, you may think you need to run twice as fast. A better option is to adopt strategies that are twice as smart. Technology is progressing at breakneck speed, and if you’re still using rip-and-replace strategies to update your core system, you’re falling into the trap of the Red Queen effect. To gain a competitive advantage, your insurance company needs a different strategy.
As the Red Queen told Alice in Lewis Carroll’s Alice in Wonderland, “My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere, you must run twice as fast as that.”
The business world is not so different. You’re constantly working to improve your operations and launch new products, services and marketing strategies. Despite all this work, you might not manage to pull ahead of your competition. That’s because your competition is working just as hard. Your work is just keeping up with the competition. If you want to actually get ahead, you have to move even faster, but that may not be possible.
In biology, the Red Queen Hypothesis is used to describe how different organizations have to evolve as fast as they can simply to keep up with the other organisms around them. This is the definition you’ll find in Science Direct, citing the Encyclopedia of Biodiversity. However, as this Entrepreneur article explains, “survival of the fittest” applies to business as well as biology.
If you want to see the Red Queen Effect in action, you don’t need to look any further than the typical rip-and-replace strategy that insurance companies use for their core policy and claims systems.
This may sound familiar. Your insurance company has a legacy core operating system, and it’s not performing as well as you want. To improve the customer experience and gain a competitive edge, you need an upgrade. You decide to replace your legacy policy administration system with a new, more modern system. It will take millions of dollars, and five years, but you think the investment is necessary to get ahead of your competition.
Unfortunately, your competition has come to the same exact conclusions. While you’re replacing your old system, they’re replacing theirs. By the time you finish, they’ve also finished, and you don’t actually have any advantage over them. Even worse, in the time that has lapsed, technology has advanced, and your new system is no longer as cutting-edge as it used to be.
You’ve been running as fast as you can – just to stay in place.
The above scenario is what usually happens, but it doesn’t have to be this way. To break free of the Red Queen trap, insurance leaders need to embrace a paradigm shift.
Replacing your legacy core system and starting over from scratch takes too much time and money. If you keep employing this strategy, you’ll never get ahead. The best you can hope for is to tread water.
But what if you didn’t have to start from scratch each time you wanted to upgrade your system?
Rather than running faster, take a shortcut. Instead of replacing your existing core system, you can innovate by layering on top of it. If you can stitch everything together into a single seamless system, you can achieve better results in far less time and at significantly less cost.
You don’t have to run twice as fast as your competition to get ahead. You just have to leverage strategies that are twice as smart.
Technological progress isn’t going to slow down so you can catch up. By the time you launch a completely new core system, it will already be outdated.
Liberate offers a better way to modernize quickly. Our SaaS platform can integrate with your existing system, while our cloud hosting reduces deployment and maintenance costs. As a result, you can create a better customer and employee experience in less time and at less cost. This new approach allows you to increase profitability and gain a competitive advantage.
Are you ready to stop treading water? Liberate empowers P&C insurers to build fully automated claims and underwriting journeys that improve the customer experience and lower costs. Book a demo.
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Liberate, a best-in-class software-as-a-service (SaaS) platform that enables P&C insurers to fully automate claims and underwriting journeys, announced its launch today after raising $7 million in venture funding.
Liberate enables P&C insurance companies to build fully automated claims and underwriting journeys to reduce costs and improve customer experience.