September 25, 2020

How do insurance carriers upgrade legacy tech without sacrificing growth?

Today, there are more digital distribution opportunities for insurance companies than ever. It’s a time when carriers want to ramp up external partnerships, but legacy technology isn't keeping pace with the needs of consumers and software partners.

When we talk to insurance companies, they describe a self-reinforcing cycle: growing today requires investing in outdated standards like EDI, which furthers the dependence on costly, manual processes. The result is a patchwork of time-consuming, expensive, and inefficient connections. This technical debt accumulates making it increasingly harder to adapt to a changing landscape and capture new opportunity.

We’ll explore this dilemma and how carriers can accelerate growth without having to tear down their existing systems or invest in short-sighted solutions.

Building on legacy systems is a compounding problem

When a carrier connects with benefits software partners, it usually means building one-off, custom integrations directly into their legacy stack. While this can meet near-term business needs, it comes with its own set of challenges and the consequences compound. Here’s why:

Custom integrations don’t scale

It’s expensive and time-consuming to build bespoke connections with each benefits software partner. This often means pulling engineering and operations teams away from high-value projects and dedicating valuable resources to plan integrations that require constant maintenance and upkeep.

Members and technology partners get stuck with a poor experience

Requiring partners to build into messy, error-prone systems increases the operational burden for everyone. The relationship suffers under a siege of long build times, high maintenance costs, frequent outages, security risks, and difficulty resolving issues. When these problems result in delayed or disrupted coverage for members, retention suffers too.

It’s short term gain for long term pain

Carriers need better connections–not just more connections–to keep pace with digital distribution. Creating more “integrations” that rely on outdated tech (like doubling down on an EDI network) only increases the amount of internal migration work needed to eventually upgrade these systems. As the world of connected insurance rapidly evolves, technical debt is your worst enemy.

APIs enable transformation at scale

APIs provide a standardized way for two applications to exchange information, and that data can be instantly synced across any connected system. Virtually any codebase capable of HTTP requests can access APIs, making them ideal for scaling connections between fragmented platforms.

You don’t have to look far to see how APIs have transformed entire industries. One can argue fintech didn’t become “fintech” until companies like Plaid and Stripe introduced the API infrastructure that enabled an entirely new ecosystem of ecommerce and financial apps. A recent Crunchbase article explains how the same trend is happening across insurtech.

So, why APIs for insurance? ‍

  • Speed of initial setup and ongoing transactions.

    Process transactions and install new policies programmatically without relying on error-prone methods that take days to sync. Customers who are used to waiting weeks to confirm coverage can see their enrollments (and their member id) within seconds.

  • Improved accuracy, transparency, and security.

    Build in upfront data validation, business rule logic, and have granular insights into the status of transactions. Enable more comprehensive, nuanced security controls.

  • A scalable middle layer.

    Connect new partners using a modern digital standard without building deep integrations into the existing tech stack. Update legacy tech behind-the-scenes without disrupting existing connections.

You can have APIs and your roadmap too

Upgrading internal systems and developing a robust suite of APIs is a multi-million dollar investment that can take several years to complete. This is a time when insurance companies face a rapidly evolving market and need to move quickly to capitalize on new technology partnerships.

Noyo has built end-to-end API infrastructure so carriers can get to market fast with the APIs their partners are waiting for. Because Noyo acts as a middle-layer between insurance companies and their external partners, carriers can safely transform their systems behind the scenes while growing and scaling connections simultaneously. Setting up new platform connections with Noyo is also lightning fast: turn on a new platform partner in 2-3 weeks.

When faced with the scenario of scaling outdated systems or dismantling legacy tech and building APIs from scratch, this is why carriers like Humana, Ameritas, and Beam Dental chose to partner with Noyo:

  • Flexible and scalable.

    Noyo provides modern infrastructure that flexibly integrates with any enterprise system and enables any partner to quickly and easily plug in. Our solution innovates on both the carrier and platform side to make full-featured, best-in-class APIs easily accessible.

  • Fast, accurate data transfer

    so carriers can accelerate their existing business and serve new customers without burdening engineering and operations teams.

  • Transparency and control.

    Ops teams need insight into the status and volume of transactions for a given channel. Noyo delivers built-in mechanisms that protect data, ensure its accuracy, and provide real-time insights.

  • A complete solution from the start.

    Technology partners need APIs that cover each business case completely before they will integrate. Noyo is a comprehensive solution for benefits administration.

Benefits software platforms want to partner with insurance companies that make processes easier, faster, and more transparent. Get to market fast with API infrastructure that accelerates your business and your roadmap.

Reach out to our team to learn more about Noyo’s solutions.

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If you do benefits, you need Noyo.

The age of connected insurance demands fast, accurate data exchange. Get to market with powerful API solutions to fit any stack.