Technology becomes critical for any insurance company looking to raise efficiencies and customer experience. Modern insurers facilitate, or automate, manual back-office processes to free up resources and time.
A survey of European insurance executives in 2020 revealed that 89% of the respondents expected a powerful acceleration into digitization. And yes, they were not mistaken. The purpose of insurance technology is clear. However, if you are asking yourself whether to execute your transformation journey internally or partner up with an insurtech company to reach your goals, you are not alone. We have summarized the advantages of both options to support your choice of path.
Outsource or self-build
When deciding whether to buy or build, consider the problem you’re striving to solve. Do you acknowledge this issue as a common insurance problem or is this a unique one for your organization?
As you consider your options, estimate the total expenditure of your organization’s resources when building or buying software. When deciding, make a rough estimate of the cost of both costs and capabilities. By costs, we indicate development, implementation, and maintenance. And by capabilities, what problem does the product aim to solve? Are there currently solutions out there that can fulfill your needs?
The three path options
- Start from scratch and use internal resources to build. Pull together a project team to manage a program of tasks to create the requirements of the project. Then, delegate developers to locate and build out the systems
- Partner up with a provider specialized in insurance technology. You operate with a digital architecture team to browse the market and see whether there’s a solution that corresponds to your organization’s requirements
- Continue to use what you have on-sight today
There are certain benefits to building insurance software internally. The important thing, in that case, is to be aware of the risks and time that may be required. For the project not to end in discomfort, remember ongoing development, support and maintenance, are often forgotten when the decision is first made.
Pros of building insurance software in-house
- Internal ownage of the code, and you can build it to function with other software in your present tech stack
- Bypass the approval of an in-house corporate counsel for projects with a third-party vendor
- If the software is lacking a specific feature, you have the ability to pivot and re-arrange
- In case of ongoing internal excess of knowledge, time and resources
How a specialized vendor can help
Insurtech companies offer insurers fast and secured insurance products, providing scalable and efficient benefits. To reach, acquire or develop customer relationships with data-fueled, fast time-to-market configurable settings — without the need for a specialized internal development team.
Pros of partnering up with an insurtech company
- Tried-and-tested, proven best practice methods of industry processes ensuring industry requirements
- Enables fast time-to-market with secured and tested implementation strategies and methods
- Unlimited configuration possibilities to optimize your desired effects
- Well-established vendors keep track of industry development, providing a proactive approach
- Remain compliant with software updates and regulatory requirements
- Well-established vendors with configurable systems offer training for your team to get started instantly
- Dedicated project manager to ensure delivery, expected effects and best practices
- Upfront costs are close to always lower compared to building in-house
Don’t hesitate to reach out if you need further support in making the most appropriate decision for your next digital project.