In this series, we share insights from a recent study* which seeks to understand the current state of core insurance systems and market sentiment for adopting SaaS-based models.

Our survey began by examining priorities for insurers’ underwriting and claims organizations before providing insight into the platform architecture and the degree to which they allow for true digital transformation. 

While respondents have expressed that vendor-hosted platforms instilled the most confidence in adapting to market changes, growth opportunities, and catering to the needs of customers, we also see that private cloud and on-premises systems aren’t nearly as successful in building that confidence. 

The survey was designed to dig deeper into cloud adoption trends, specifically as it relates to software as a service. We asked how likely a company would be to consider moving its core system to a SaaS-based model.

We next asked participants about the benefits of migrating their existing core system to a SaaS-based model. The consistent response was improved operational efficiency, followed by speed to market for new products and a stronger customer experience. 

Of note, those with annual premiums under $1 billion are more likely to cite faster speed to market as a benefit (71% vs. 48% among those with annual premiums of $1B or more). The ease of building, testing, and launching new products is more commonly seen as a benefit by multi-line insurance carriers (56%) and MGA/MGU brokers, and other third-party administrators (67%).

The vast majority were somewhat or very likely to adopt SaaS architecture. The free-form responses for such adoption varied but were firmly rooted in the benefits of efficiency, scalability, and customer experience, as previously noted. Responses included:

“This allows us to move faster to market changes and scale much quicker with technology shifts.”

“We would like to adopt this because of cost efficiencies, scalability, AI and machine learning, and the ability to adapt to future demands.”

“I believe it will be the new standard in the future. To be competitive we must adopt the newest technology.”

Those less convinced remarked:

“I do not have enough information to determine if SaaS-based technology would be compatible with our company’s specific functions.”

“Just uncertain if there would be enough benefits.”

Support for insurers moving to vendor-hosted public cloud options is clearly growing, with the opportunity to more confidently tackle digital transformation. Navigating vendors and settling on the right SaaS strategy can be daunting given the options available.  In our final installment of the series, we’ll take a look at how insurers are selecting core platform providers.

To learn more about why the architecture matters for selecting core insurance cloud technology, download our eBook. 

*Research Methodology and Respondent Profile

This research was commissioned by Origami Risk and conducted by Arizent/Digital Insurance between September 22 and October 20, 2022, among 100 qualified respondents. To qualify, insurance industry professionals had to have a management role (in a non-legal/HR function) and have knowledge of their organization’s core systems or primary supporting services.

51% of respondents self-identified as P&C insurance carriers, 25% insurance broker/agent, 12% MGA/MGU and 12% third-party administrators. 

Total Respondents: n=100; Annual premiums under $1B: n=35/Annual premiums of $1B or more: n=65; IT/technology role: n=16; Primary core system is all or mostly on-premises: n=26; Senior business unit executive: n=28/Division or dept head/director: n=36.