Increasingly, life insurers are being asked to do more with less: drive better performance, attract new business and achieve faster underwriting. At the same time, they’re expected to reduce costs, improve efficiencies and, of course, manage risk effectively. It’s a tall order, but one that can be met by automating new business and underwriting systems.
While automation will never replace talented agents and underwriters, it can help insurers simplify their processes—and free up their talent to focus on more complex cases or value-added activities.
Software as a service (SaaS) in life insurance
Software as a service (SaaS)—and more generally, cloud computing—can enable insurers to:
- Take advantage of pre-defined templates and configurations.
- Benefit from best practices developed by the SaaS provider.
- Shorten implementation times.
- Simplify IT maintenance and monitoring requirements.
- Share infrastructure and help desk services.
More specifically to new business and underwriting systems, SaaS can help insurers:
- Reduce costs and risks. Since insurers pay for cloud computing based on usage, they can reduce redundancies and achieve economies of scale in run and maintenance costs. This also eliminates the need to pay licensing fees, and reduces the IT burden on the insurer in terms of hardware, software and people needed to manage systems.
- Greater scalability. As an insurer’s products, markets and customers grow, so can their SaaS solutions. In many instances, SaaS can also give insurers innovative ways to sell new products. In addition, as most SaaS products are built on service-oriented architecture, interoperability and compatibility with business systems is often simplified.
- Higher employee productivity. SaaS takes a cross-channel approach to business data entry, helping employees get the information and help they need, faster.
Barriers to adoption
While insurers have been slow to adopt SaaS licensing, the tide may be changing. A recent Gartner study found that 35 percent of insurers currently use some form of SaaS, while 20 percent plan to adopt it within the next year. While the benefits of SaaS seem to favor smaller insurers, larger insurers can also benefit—notably, as an alternative way to improve speed to market, and as a way of maintaining 24/7 operations in multiple languages.
Key barriers to adoption include concerns about data security, a desire from technology teams to create customized solutions—and a (false) perception that these low-cost solutions might not have the functionality that insurers need to achieve high performance.
Join me next week as I share four key considerations for life insurers seeking a SaaS partner.
To learn more, download How Software as a Service Is Revolutionizing Automated New Business and Underwriting Systems (pdf; opens in a new window).