In today’s rapidly growing insurance industry, an insurer will need to update to a flexible, scalable, and highly innovative digital system. While exploring new technology solutions, insurers always face one fundamental question. Is it better to buy an insurance software system or build a new one from scratch?
This question applies to many types of systems including policy management, underwriting solutions, CRM, claims systems and portals for intermediaries as well as customers.
So, how should insurers approach this decision? To make a choice that ensures the organization’s growth and end customers’ satisfaction, insurers need to delve deeper.
The Clock is Ticking
The insurance market, with the advent of digitalization is moving too fast, too far. Building a proprietary software takes a lot of time, from finding the right team to build the insurance software, developing, testing, and implementing it. So, are insurers willing to spend the time to build a system from the ground up?
On the other hand, many insurance software solutions come as a whole package which can integrate with the core seamlessly. They are designed with extensive APIs, are highly configurable, and allow for faster implementations.
Integration of Insurance Software Systems
Ease and the level of integration is an important factor to consider when evaluating ‘build vs buy.’ First and foremost, the new insurance software system should be able to integrate. Likewise, the functions should be seamlessly on top of the core system.
Earlier, issues with integration pushed many insurers to go the ‘buy’ way. However, today’s insurtechs have come a long way as they have extensive APIs and they come pre-integrated with other solutions in the marketplace.
What Does the Insurance Software’s Future Look Like?
It is important to consider the life expectancy of a solution. When considering the ‘build’ approach, insurers will have to continue to modify the systems based on specific needs and market trends. Basically, insurers will be responsible for the upgrades and associated resource management.
In contrast, in the ‘buy’ approach, insurers are not responsible for the upgrades. The software company they are partnering with will upgrade and take care of the evolutions of the systems.
Earlier, insurers found it difficult to find an insurance software solution that was made to adapt to their unique environment accommodating all the workflows. The issue became bigger when the insurers’ niche was more complicated like health insurance. So, insurers can choose the ‘build’ pathway when it is proven that there is no established solution available.
However, the times have changed and many insurtechs offer a custom-built solution for the insurers’ specific business areas. The ‘buy’ pathway introduces insurers to insurtechs like iNube with proven, competitive solutions that are capable of swift implementation.
This way, they can take advantage of insurtech’s innovation and ongoing investment in advanced features and functionality, as driven by the market and its users.