Insurance carriers are betting big on InsurTech. Money and attention are pouring into this emerging sector from all sides: private equity and venture capital, new start-ups, spinoffs and joint ventures tied to large carriers, and more. But with so much investment saturating the market, how will the gamble pay off for everyone?
There are some important parallels between today’s InsurTech market and the tech bubbles of the ‘90s and early 2000s. There’s a lot of buzz around new and emerging technologies like blockchain, machine learning, IoT, federated architecture, microservices, digital sales and policy administration, and new models for reducing insurance cost. However, many companies are focusing on outdated metrics like “eyeballs” and user signups–while pushing the big questions about ROI farther off into an ambiguous future.
The spending spree won’t last forever. When the buzz wears off and the bottom line comes back into focus, how many of these glitzy InsurTech plays will have delivered tangible value (not just for early investors—but for the insurance executives, underwriters, and other stakeholders who actually rely on these systems for their livelihood)?
As an insurance technology leader, you need to clearly define your goals around bottom-line business results such as profitability, premium growth, and reduction of loss and expense ratios. Equally importantly, you need to understand the costs and risks your organization faces in pursuing large digital initiatives.
InsurTech initiatives can be Expensive and Time Consuming
The process of evaluating and selecting the right systems and components for your InsurTech strategy can consume large amounts of time, money, and opportunity. This is especially true for carriers that depend on monolithic enterprise systems. Traditionally, the decision to build or buy a new system is loaded with risk and has far-reaching effects on the entire company.
Evaluating technology solutions requires the engagement of multiple stakeholders: IT, underwriters, business analysts, etc. Technology needs to meet the diverse needs of internal departments, channel partners, and even customers. Because the system needs to do so much for so many different people, just getting input from everyone can take a lot of time.
Technical people need to understand the workflows and challenges on the business side, while underwriters and analysts need to be consulted on how different technology options will provide the greatest benefits. And meanwhile, the technology landscape is continually evolving in faster and shorter cycles. Even the most prolific CIO will struggle to keep up with the latest changes in today’s tech market. Heck, nowadays even Mark “move fast and break things” Zuckerberg is acknowledging that maybe it’s time to slow down and fix stuff.
The insurance industry is founded on a single principle: Risk can be measured and managed. It’s high time we started applying this idea more rigorously to our InsurTech investments. Fortunately, new approaches to development are making it possible to deploy new technology without betting your entire company’s future on a single project or platform. Now you can use (and pay for) only the components you need, using proven technology in a secure, redundant cloud environment.
3 Ways Solartis Reduces the costs of your InsurTech initiatives
Solartis is dedicated to simplifying insurance quoting and policy administration. We’ve seen how high-stakes technology deployments have blown up budgets and business models in the past, so we’ve changed the approach to eliminate upfront risk.
Instead of spending days, weeks, or months gathering information about requirements and attempting to select one system that meets every need, Solartis makes it simple to discover, test, and deploy specific components you need to support your digital strategy. Carriers can go straight to our sandbox environments designed for developers, business analysts, and users to try out our rating and policy life cycle capabilities first hand.
Our insurance microservices (APIs) de-risk the process of evaluating and selecting new InsurTech components in 3 main ways:
Proven technology that you can try before you buy takes the uncertainty out of deployment decisions and shortens the process of procuring new solutions. Not only can different stakeholders assess Solartis capabilities for themselves, but they can also discover and gain experience with emerging technology and functionality as we add “new toys” to our sandbox.
Independently scalable, deployable, and replaceable microservices are extremely cost-effective because you only use what you need, and there’s no need to maintain and support an entire monolithic infrastructure. Microservices make it easy for your technology to evolve alongside your business requirements and user expectations.
Subscription or usage-based pricing dramatically reduces the upfront financial commitment of deploying your new InsurTech. Huge licensing fees, hardware costs, and other expenses are things of the past with Solartis Insure. Our cloud-based platform was designed to provide maximum flexibility and cost-effectiveness for users.
When starting a new InsurTech initiative, you should have confidence that the underlying technology will work as expected and deliver a reliable user experience. With our sandbox sites, Solartis aims to provide not just a showcase for our microservices, but also a broader setting for discovery and learning about technology and policy life cycle functionality. So, come play in our InsurTech sandboxes and see what you’ll learn!