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Now, however, things are starting to change and more tech-centric and self-service models are coming into play.
According to a recent report published by Deloitte, general insurance in the next five to ten years is going to look radically different. In their report, they highlight nine key areas of digital growth and disruption, ranging from seemingly innocuous developments through to previously unfathomable product lines. Here's the full list in no particular order:
The old model of agent driven sales has started to go the way of the dodo, as more tech savvy customers use the Internet to get the best deal for themselves.
Of course, agents still have their part to play for now, but one can't help but conjure up comparisons between insurance today and the travel or banking industries a decade ago.
That's just the tip of the iceberg. Digital disruption seems to be affecting all facets of the industry, for instance:
Insurance companies can no longer look at technology as a supporting function. Rather than being a delivery channel, it's now the core product, and not being able to tackle software bugs can be catastrophic.
According to one estimate, software failure in the financial sector caused losses of $521 million for a single incident.
While software failures and demands on IT increase, insurance CIOs are staring at the spectre of stagnant and sometimes shrinking budgets, according to KPMG. In the report, 62% of CIOs said they expected their IT budget to remain the same or decrease over the coming twelve months.
Perhaps paradoxically, the same report indicated that improving operational efficiencies and delivering business intelligence are the top two expectations from CIOs and digital directors in insurance companies.
If both are to come to fruition, companies will need to adopt newer ways to cut costs, from using virtual assistants and Facebook messenger bots to making the process of getting a new policy as easy as buying on Amazon.
One way to achieve these outcomes is artificial intelligence. According to Accenture:
One thing is for certain: insurance companies will have to operate like tech companies, adopting agile methodologies to roll out products with shorter time-to-market.
But it’s not enough to build software solutions or automate processes.
Software will have to function reliably, and in the rush to push out new products while keeping the project under budget there’s a risk that quality might suffer because of lack of adequate testing.
Naturally the nature of a software bug can vary dramatically, but could include things like:
The implications of any of these bugs may include consequences such as:
Of course, not all software bugs are catastrophic. Some are so innocuous they’re never even identified. But be warned, they all cost you money, customers and opportunities. Studies show that the cost of resolving bugs after they hit production is 30X greater than remediating the bug prior to launch.
In 2016 alone, it’s estimated that software bugs resulted in 315 years, six months, two weeks, six days, 16 hours, and 26 minutes worth of downtime, lost productivity, and lack of service.
The stakes of not testing code are higher when algorithms are buggy. When so many processes are automated, a tiny bug hidden in a subroutine somewhere deep within the codebase can wreak havoc and deny valid claims, lead to PR crisis, and open companies to the risk of fines or litigation.
The public implosion of the first iteration of Healthcare.gov in the US, which cost the federal government $174 million, should be a cautionary tale about the importance of testing code. If you're unfamiliar with the story, here are a few key points that illustrate the scope of the catastrophe:
For a heavily regulated sector like insurance, security is an especially sensitive issue, and lack of security testing can literally put you out of business.
According to Accenture data:
In modern SDLC, testing can’t be pushed off towards the end. With Agile methodologies increasingly being adopted by the industry, testing has to be a continuous process.
However traditional testing processes are slow and time consuming, and in the interest of saving time most people compromise and test just before release. That, of course doesn’t work as more time and money is spent on fixing the bugs.
A vicious cycle then sets in, and the project ends up either being delayed or gets shipped while it’s still buggy.
Bugwolf takes an innovative approach to software testing, promoting a proactive, rather than reactive, solution to the problem.
Our unique model has made us the UAT solution of choice for digital leaders at NAB, Australia Post, Treasury Wine Estates and many more.
We transform software testing into competitive software challenges that accelerate digital releases, lower customer support calls and reduce defect costs.
During challenges, professional testers compete to uncover as many bugs as possible within a set timeframe (usually six hours).
Our suite of testing tools allows us to provide deep cross-device coverage and detailed video bug reports with audio commentary.
It’s not uncommon for us to uncover one hundred or more bugs in a single six hour challenge.
The once-placid world of insurance is going to experience digital disruption as new players and radically different operating models emerge.
To stay in the game insurance companies will have to change how they operate, and embrace a tech driven model which focuses on defect-free software.
Every digital leader has a responsibility to ensure their organisation doesn’t become the next software testing disaster story... That is the only way to curve the cost of software bugs on your organisation and the wider insurance industry.
If you are new to Bugwolf and would like to learn more about how we help insurance companies accelerate testing and improve software quality, the quickest and easiest way to find out more is to Request A Demo by clicking HERE.