Balancing the Ability for Transformation with Traditional Insurance Models

When we talk to potential clients they often face the common dilemma: modernize

legacy systems while maintaining operational stability. "I need to find a way to

balance innovation with continuity," they explain. The challenge reflects what many

insurers experience today—navigating the intersection of the ability for

transformation and traditional insurance operations.

The Challenge of Combining Precise and Human Processes

As vFinance, we find the current technological developments and the challenges

they represent very interesting. Our close, long-term client relationships allow us to

collaboratively learn and define the future of insurer’s software architectures.

Today's insurance industry faces a delicate balancing act between complex exact

system processes and human(-like) expertise. Insurance companies need to

modernize their legacy systems while maintaining operational stability. While

technology can automate more and more tasks, areas like complex risk assessment

and meaningful customer interactions are still driven by human judgment.

The ability to upgrade systems drives innovation, but is challenging in complex

operational workflows. Success requires a deep understanding of insurance

processes and continues discipline in monitoring and verifying those processes. The

architecture needs to find the right balance between automation and maintaining

flexibility and control. By implementing AI and data analytics thoughtfully, insurers

can improve efficiency and customer experience. However, they must also invest in

defining the right verification and quality management layers to stay in control. This

will define the long-term resilience in a changing market.

Finding a balance between “short-term changes” and “long-term ability to change” is

essential for sustainable transformation.

Taking the time to map differences in insurance processes

Next to the long-term view on software architecture, it is noticeable that not all

insurance processes should be automated in the same way. By categorizing different

types of tasks, insurers can apply the right technology while at the same time define

the necessary control and flexibility.

1. Precise Processes: The Core of Insurance

Precise processes demand accuracy and long term robustness above all else,

making them ideal candidates for automation. These include premium calculation,

interest calculations, policy issuance and renewals, payment reconciliation and

compliant reporting.

Manual interference of these tasks can lead to errors. Many insurers still rely on

(multiple) legacy systems in combination with spreadsheet-like tools, resulting in

inefficiencies and difficulties to evolve those processes in a controlled way. Further

automating these routine tasks requires full accuracy, consistency, and regulatory

compliance. Due to the limited amount of verification layers and the lack of a

controlled upgrade process, evolutions become difficult.

We recommend our clients in view of the upcoming technological changes, to be

aware of the real importance of verification layers, controls, documentation and

transparency of calculations. Again, it is finding the correct balance between the

speed of short-term changes and long-term ability to change.

2. Goal-Oriented Processes: Balancing Structure and Flexibility

Goal-oriented processes require structured decision-making, but the methods can

vary based on available data, risk models, and business strategies. Examples

include risk evaluation and policy approval, claims processing, customer onboarding

(including KYC compliance), and fraud detection.

Unlike precise tasks, these allow for flexibility since different approaches can lead to

the same correct outcome. For instance, policy approval involves assessing various

risk factors, but insurers may weigh these differently based on current market

conditions, regulatory requirements, or new data sources.

As risk evaluation grows more complex, modern systems need to support flexible

architectures. Whether integrating new data sources for policy approval or

implementing AI for fraud detection, insurers need systems that allow quick

adjustments without requiring a complete overhaul of the whole flows.

3. Highly Adaptive Processes: Continuous Improvement

Highly adaptive processes focus on efficiency and optimization rather than precision.

These include for example sales and marketing strategies, customer engagement

and communication, and lead generation and conversion.

Unlike the first two categories, these processes evolve continuously based on

customer behavior, business strategy, and market trends. AI-driven insights and

automation can boost efficiency, but human decision-making and control remain

crucial.

For example, data-driven personalization can improve customer engagement by

helping insurers tailor marketing campaigns to specific audience segments. Similarly,

AI-powered chatbots can handle routine customer inquiries, freeing human agents to

handle more complex cases.

This layer of technology needs to be very adaptable and will change more often in

the general architecture, while your verification layers and integrations with the other

process categories should stay stable and under control.

A Layered Strategy for Digital Transformation

A common path in digital transformation is applying a one-size-fits-all approach. A

layered architecture is essential for enhancing operations without losing valuable

human oversight. At vFinance we believe that we need to focus on what we are

good at (providing the core system) and should allow for other technologies for

enrich the architecture of our clients in a controlled manner.

In short: for precise tasks, we focus on full automation improving efficiency and

accuracy. Goal-oriented tasks should benefit from integrations with AI and data

analytics to support decisions while maintaining control. Highly Adaptive Business

Processes require digital tools that optimize efficiency without replacing human

creativity and judgment.

This approach ensures that automation and AI enhance decision-making

capabilities, keeping insurers agile while maintaining long term robustness & trust.

The Path Forward

We believe that the future of insurance isn't about replacing traditional processes but

improving them. Insurers who successfully blend their core processes with AI,

automation, and data insights while preserving essential human elements will lead

the industry.

Implementing flexible, API-based systems helps insurers meet regulatory

requirements, leverage new data sources, and quickly adapt to evolving customer

needs. The right combination of automation, verification & control, human expertise,

and strategic decision-making will define the next generation of industry leaders.

vFinance is a Belgian innovative technology company and has developed a state of the

art financial engine. The engine is used by (re)insurance companies and credit

institutions under a client partnership model. We provide our clients with a high

performance, flexible core building block for mid-end and back-end systems. For your

financial ecosystem, we offer a robust engine strengthened by its open architecture.

The engine offers advanced parametrisation and integration with your other core

systems. Our engine has the greatest added value in environments with complex

product characteristics, financial and regulatory constraints that evolve in time, in

combination with advanced financial reporting requirements.