The Indian insurance sector is going through a once-in-a-generation transformation. The market was already experiencing significant growth thanks to factors including increasing wealth, greater online literacy and population growth. This has now been accelerated by IRDAI’s Insurance For All By 2047 initiative, creating more opportunities to protect more individuals and businesses.
In response, many of India’s largest private general and health (non-life) insurers have started upgrading their existing on-premises, in-house and legacy core delivery solutions by adding on individual applications for extra capacity and capabilities. This is giving them the advantage of being first to respond. But, at the same time, they may have inadvertently put themselves at a long-term disadvantage — one that medium-sized non-life insurers could benefit from.
By upgrading their existing solutions, these larger insurers are only ‘kicking the can down the road’. Their solutions may become more capable now, but they will retain all their underlying flaws. As time passes, these systems will again become out-of-date, deliver poor experiences and limit business outcomes.
But by doing it differently, with future-proof SaaS-delivered core insurtech, medium-sized non-life insurers could potentially out-evolve and out-compete larger and better-resourced competitors now and long into the future.
SaaS-delivered core insurtech — the big differentiator made for medium-sized insurers
Inherent in their medium size come limitations in staff, budgets, technology, and other resources, when compared to larger rivals. This can hamper their ability to compete and capitalise on Insurance For All By 2047.
But SaaS-delivered core insurtech could help medium-sized insurers not only overcome these deficits, but punch above their weight. SaaS core-delivery insurtech could help:
Reduce or remove the costs, complexities, burdens and limitations of on-prem, in-house and legacy insurtech ownership.
Deliver more speed, functionality, capability and capacity than on-prem, in-house and legacy insurtech.
Empower insurers with the speed, flexibility and creativity to adapt to market and consumer changes as they arise, in order to maximise business and policyholder outcomes.
How you can benefit?
Cloud-native core insurance delivery technology is packed with innovative functions, features and benefits made for medium-sized non-life insurers. Here are just a few:
OnDemand delivery: Where in-house and legacy solutions usually operate out of server rooms, SaaS insurtech is delivered via the cloud, OnDemand, and hosted locally in India — meaning there is little-to-no costs or responsibilities associated with technology ownership. The SaaS provider is responsible for the solution’s ongoing delivery, maintenance and development whilst the insurer receives all the benefits — including silent fortnightly updates, not disruptive upgrades.
OnDemand means that medium-sized insurers can operate leaner and more efficiently in multiple areas but have access to the latest and best insurtech features and innovations via a solution that runs reliably and effectively. Whereas achieving a similar level of technological capability for larger insurers means incurring excessive ownership and development costs and waiting months for disruptive upgrades to come online.
Product Factory: The Product Factory, exclusive to Duck Creek Technologies, enables insurers the ability to amend or design and launch new products in a fraction of the time and with significantly less effort than normal. The Product Factory is enabled through innovations like the Coverage Library, Product Hierarchy, and Inheritance, which allow insurers to create a library of reusable and customisable ‘coverage modules’ that form the building blocks of new insurance products. Instead of building from scratch, insurers can now plug and play.
In addition to drastically accelerating speed to market, the Product Factory can reduce the costs of innovation. It allows new products to be built in weeks, not months. It also allows for more personalised products to be created without the associated complexity. This means medium-sized insurers can create new products more efficiently and effectively than their larger competitors. In practice, this could allow for more responsive use and file or a quicker response to changing product regulation, such as the removal of the 65-year age ceiling for health insurance.
Low/no-code configuration: On-prem and legacy core insurtech is typically underpinned by thousands of lines of complex code, whereas SaaS-delivered solutions are low/no-code configurable by smart tools suited to different levels of experience — including business-side users. Via these tools, there are almost no limits to what can be configured.
You no longer need an IT degree to build or amend products. More stakeholders contributing to product development and launch increases speed and decreases costs to market, allowing medium-sized insurers to do more with less. In contrast, the larger insurers need to build each new product one line of code at a time, taking up extra time and inflating costs.
This could give medium-sized insurers a first-to-market advantage. For example, when making price changes in response to recent motor, fire and workman’s compensation de-tariffing. These changes could now be (simulated and) actioned by the pricing/finance teams.
Experienced local providers: Many SaaS-delivered insurtech providers, including Duck Creek, have been specialising in insurtech for decades, accruing deep knowledge through partnerships with the world’s biggest insurers. They also have India-based professional services and local hosting.
This contrasts with the general technology solution providers who either lack specialised insurance experience or offer a less capable cover-all fintech solution.
Experienced insurtech providers can drastically reduce the time and costs of implementation through best-practice strategies, improving ROI and allowing the insurer to get more value from their budgets. They could also impart their extensive, world-class knowledge to their customers.
A perfect fit for medium-sized insurers
With Insurance For All By 2047 creating exciting new opportunities, but requiring new insurtech, SaaS-delivered core insurtech could be the ideal solution for medium-sized non-life insurers, allowing them to run leaner and invest more resources into more valuable and strategic areas that deliver bigger returns.
It also gives them the technology needed to develop exciting new products, services, and experiences faster.
Medium-sized insurers have everything they need to out-innovate and out-compete their larger and better-resourced competitors, who are anchored by their code-heavy, slow, fragile, and unresponsive in-house, on-prem and legacy systems. All it takes is the right solution — SaaS-delivered core insurtech.
The competitive benefits offered by SaaS-delivered insurtech to medium-sized private non-life insurers is explored in Duck Creek Technologies’ new whitepaper, Punching Above Your Weight. Download the whitepaper for free now. Click here to download.
Author: Sudeep Chatterjee, Country Commercial Director, Duck Creek Technologies
Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of IIA and IIA does not assume any responsibility or liability for the same.