While working on some of the biggest Guidewire projects in Germany we have experienced how the right mind-set is a crucial factor: In order to ensure that the technological potential of modern core systems is fully utilized, it is vital to promote a digital mindset in the German insurance industry or at least in the project organization.
Let me explain with an example. In the world of the COBOL mainframe, processing usually follows this simplified pattern: during the day the insurance staff work on the system; at night, batch processing takes place. These batches must be tracked closely to avoid errors from continuing into the subsequent jobs or batches. By contrast, Guidewire core systems are event-based systems, and dynamic in nature. With this capability they can easily handle the fast delivery processes necessary for an omnichannel front-end world or to process incoming data. Among the many stakeholders in new core system implementation are those with a COBOL world background. With a COBOL mindset deeply ingrained, batch processing is commonly one of the preferred implementation patterns, although a plethora of more suitable patterns – like workflows – do exist but are seldom considered.
With batch processing still being the preferred choice, it is hard to see how the German insurance market will attain its goal of moving faster towards fully digitalized services, with straight-through processing levels of 95% and more. Key to this goal are stable and effective core systems, built to meet specific insurer needs. Paired with innovative front ends, these systems should enable insurers to take the next step in their transition to become digital and customer-centric service providers.
So, even if the change from legacy is desired, there is the risk that a “traditional COBOL mainframe mindset” among German insurers is preventing them from utilizing the full technological potential of modern standard software. Insurers have a lot more to do than change up their core systems. Educating and training staff in the use of modern technology, teaching new ways of thinking, and employing people familiar with agile methodologies is yet another essential step in becoming a resilient insurance company in the modern age.