7 tips for insurers selecting a new core system
With decades of experience as an industry leading provider of SaaS platforms to the insurance industry, we have acquired vital knowledge and a deep understanding of the key steps required for insurers to adopt the right core system to meet their business objectives now and in the future. Read our 7 tips for insurers selecting a new core system:
1. Standard vs Custom software
When selecting a new core solution, a very important decision needs to be made – standard software or a custom build/low code solution approach?
Standard software solutions are pre-built software applications designed to meet the common needs of many organisations, rather than being customised for a specific organisation’s unique requirements. While standard software solutions may not address every wish of every insurer, they are designed to be flexible and configurable, allowing insurers to adapt them to their business needs and workflows, while also ensuring that the insurance market’s standard processes are in place out of the box.
The key distinction for an insurer to make is whether they wish to follow market best practices (standard) or want to design their own solutions (custom). Some insurers will want to introduce completely new products to the market, which can be achieved with standard software, and perhaps do so without the interference of the software vendor or IT department. This is a key point in your strategy and influences what core systems fit your needs. Therefore, the decision of standard vs custom software must be made early in the process.
2. Perform a proof of concept
No matter how great the software, without proof-of-concept frameworks and small-scale product demonstrations, insurers may struggle to envision how the system will address their business objectives, as well as how it compares to competitor offerings.
It’s one thing for platform providers to run good marketing campaigns, advertise shiny new features or deliver a hyped and enthusiastic sales pitch, but the old rule of “show, don’t tell” will always come out on top when the stakes are so high. Put simply, insurers needs to be able to test software within their own unique environments, enabling them to see how easily (or not) the software can be integrated into their existing systems and workflows.
Proof-of-concept tests allow insurers to assess user interfaces, data management capabilities, flexibility with regards to insurance products, and test features and functionality that are critical to strategic business goals.
By experiencing a proof of concept, insurers are better equipped to ascertain the best solution for their needs, and are armed with much more than a glossy sales brochure on which to base their final decision.
Last but by no means least, a proof of concept allows the insurer to get to know a provider’s experts better, as well as observe how they approach problem solving. In the long run, such hands-on understanding of a provider’s technical and support capabilities in terms of problem and solution management will pay off dividends and strengthen the collaborative nature of your partnership with the platform provider.
3. Look forward, not backwards
A clear and concise future business strategy is crucial when selecting new software solutions, because it ensures that the software solution aligns with the organisation’s long-term goals and objectives, as well as preparing an insurer for tomorrow’s disruptions. When an insurer looks forward and works toward future-proofing their operations, they become more agile and adaptable and better positioned for long term growth.
However, insurers will often map their current solution functionalities onto the new solution and focus on the differences. This is of course natural behaviour. Change breeds uncertainty and nostalgia for the familiar. However, a new solution will more often provide new opportunities as well as enable a new future of expanding possibilities.
At Keylane, we recommend an ‘adopt over adapt’ strategy that emphasises the adoption of software solution processes that will drive positive changes and enable organisational and strategical growth, and empower operational ease, rather than maintaining the organisation’s current processes and workflows. Such an approach ensures that the software solution is a good fit for the organisation’s current and future needs, rather than trying to build the ‘old solution’ in a new system.
4. Migrations matter
Of course, the quality of a vendor’s software is of critical importance, but just as important is that a software vendor has a lot of experience in performing migrations. You cannot have one without the other and expect a successful outcome. The migration of data from legacy systems to new systems is both a complex and critical process, which will have a significant impact on an insurers future business operations.
Thus, an experienced team in the area of migrating insurance policies will bring a depth of knowledge and understanding of the complexities and challenges involved in data migration, including identifying and resolving issues with data quality, data mapping, and data transformation. Migration experts leverage best practices, methodologies, and tools to streamline the migration process, enabling insurers to transition smoothly to the new system with minimal disruption to business operations.
A team with a track record of successful migrations can provide confidence to insurance companies that their migration will be executed efficiently and accurately.
5. Understanding the difference between SaaS and on-premise solutions
Standard SaaS software solutions are generally less expensive than on-premise custom solutions. This is because the development and maintenance costs are shared across a larger user base.
The choice between a Software-as-a-Service (SaaS) or on-premise software platform is an important consideration when selecting a software vendor because it determines how the software will be deployed, managed, and maintained. SaaS platforms are cloud-based, meaning that the software is hosted and managed by the vendor. On-premise platforms, on the other hand, are installed and run on the organisation’s own servers and infrastructure, or are maintained by a third party.
Having a single responsible party for the software and infrastructure can provide a benefit when it comes to flexibility in scaling up, dealing with performance issues or security issues.
SaaS platforms are highly secure, with data stored in secure data centers with the vendor responsible for data backup and disaster recovery. On-premise platforms, however, may require more internal IT resources to maintain security and disaster recovery.
Some insurers may prefer the flexibility and scalability of SaaS, while others may prioritise the control, security and known way of working that comes with an on-premise solution.
Ultimately, the choice between SaaS and on-premise should be based on the insurers requirements and long-term strategy.
When selecting a provider, it is also important to check whether an initial on-site installation, for example due to an open cloud strategy, can be changed in the future to a SaaS solution with calculable costs.
6. Try before you buy
Earlier we discussed the importance of proof of concepts. When selecting a new software solution, it is important to make sure that you see working functionality and not just slides, mock-ups or presentations. Going beyond the proof of concept stage, focus on the use cases or processes that are important to your business or include specific insurance product characteristics, because seeing working functionality allows you to experience the software in action and allows you to better understand how it will perform in a business setting.
Seeing use cases in a demo allows an insurer to assess how easily the software can be customised to meet their specific needs.
However, it is important to focus on what a solution can do and not how it should do something. Trying to enforce the ‘how’ means that you as an insurer may not see the full potential of the solution. Next to the functional fit, in-depth demonstrations allows for collaboration between the software vendor and the insurer, ensuring that all requirements are clearly understood and addressed.
7. The right cultural fit
The importance of a good cultural fit cannot be overstated. At Keylane, we place extremely high value in building long term partnerships over fire-and-forget solutions, and a good cultural fit between software vendor and insurer results in a stronger, more productive relationship marked by increased collaboration, better communication and a higher likelihood of project success.
The implementation of SaaS solutions can be a complex and long winding road, so it stands to reason that the success of such partnerships depends upon shared values, work ethics and cultural expectations. A shared understanding of both parties company cultures and values will build trust, promote open and honest communication, and greatly improve a collaborative approach to problem solving.