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 has revealed that within the next 5 years, 63% of respondents intend to begin the selection process for an insurance core platform. With procurement resources ranging from dedicated departments to a staff side-project, the research and selection process looks very different from one company to the next.

In the final installment in our blog series, we seek to better understand the differences in the selection process by asking the question, “If you were tasked with finding a replacement for your organization’s existing core systems, describe how you would go about finding a provider?” The answers were wide-ranging.

“I would start by doing an internet search. After I narrow down my list I would check expert reviews and then I would contact companies for a more in-depth presentation of the product.”

“First gather all the important requirements across the company, and then proceed with research.”

“We'd partner with independent outside consultants to do an RFP to look at core systems providers across multiple vendors and identify the ones that will meet our needs.”

“Search suppliers' reviews on social platforms to find system suppliers with good reputations.”

“I would begin by speaking with my peers at other organizations, select the top three, and invite them in for a demo.”

“Word of mouth and extensive research.”

“I would first talk to friends and colleagues in the industry about their experiences, then I would read reviews, publications, and whitepapers before finally engaging with a trusted consultant to narrow down the list before engaging with the final vendor list.”

“I would first look at the market and see what’s the cheapest.”

As evidenced by a sampling of the responses, it’s not only the amount of resources dedicated to the search itself but also a difference in procedure. When considering a new core system partner, industry track record, vendor skills, and talent are the most frequently cited key considerations.

Perhaps as a nod to their responsibilities for driving growth, senior business unit executives selected the scalability of the solution as a primary criteria at 64%, higher than the 47% respondent average.

Summary findings

Given the research presented over the course of the series, we can make some general conclusions about technology trends for the P&C industry.

Today, most insurers utilize more than one core system and there’s little consistency in the vendors used and operating environments. While most feel their core systems are keeping pace, only a quarter would say they are leading the way relative to competitors.

Nearly all have or will begin core modernization within the next five years; however, only two out of five say that modernizing core technology systems is a key business priority — despite the strong link between digital transformation and cited higher priorities. For those who anticipate beginning their core modernization in the next two years, the cost of the effort rises to the top of the expected obstacles.

Reception to a SaaS-based model for core systems is extremely positive as 78% say they are very or somewhat likely to consider a switch. Vendor-hosted SaaS platforms are more likely to help insurers digitally transform to the degree they can serve new markets, delight customers, and adapt to change. For those beginning a selection journey, reputational assessment through word of mouth is extremely important as part of the consideration criteria.

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% as 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.