SaaS for insurance companies offers key advantages over traditional on-premise solutions, helping teams manage core operations more efficiently, leverage advanced technologies, and enjoy better cost-efficiency.
Given the rapid pace of technological advancements in the insurance space, SaaS solutions make it easier for organizations to utilize innovative tech without being concerned about its ongoing maintenance, security, or upgrades.
Let’s take a closer look at the advantages of SaaS applications, how they compare to on-premise systems, and some helpful tips for finding the right solution.
Introduction to SaaS in the Insurance Industry
Software-as-a-service (SaaS) refers to cloud-based applications that users access over the internet. These programs don’t need to be installed onto each device for use. Instead, teams access them on a subscription or pay-as-you-go basis.
In the insurance industry, SaaS programs can help teams manage all aspects of operations, from underwriting policies and interacting with policyholders to processing claims, monitoring fraud, and more.
Benefits of SaaS for Insurance Companies
By design, SaaS solutions are typically a more cost-effective, low-maintenance, and scalable solution to implement compared to traditional on-premise software. Insurers can adjust their subscriptions and usage to cater to their specific needs rather than making a large upfront payment to purchasing traditional software.
In addition, SaaS vendors continually deploy updates to the platform without any additional costs and minimal downtime. So insurers always have access to the most up-to-date tech capabilities needed to compete in today’s fast-paced environment—without worrying that the solution will become obsolete.
SaaS solutions also help to streamline insurance operations, giving teams a single interface to manage various workflows and leverage automation features, improving efficiency while reducing the time spent on tedious administrative tasks.
Core Applications of SaaS in Insurance
There are several main applications of SaaS solutions in the insurance industry, including:
- Policy Administration Systems: A platform where insurers can manage premiums billing, policy renewals, and related documents.
- Claims Management Solutions: Applications for managing all stages of the claims process, from first notice of loss to settlement.
- Underwriting and Risk Assessment Tools: A solution to help insurers assess policyholder risk, determine coverage limits, and calculate premiums.
- Customer Relationship Management Platforms: A database for storing policyholder contact information, communication history, and other account-specific details for promotional and support-related purposes.
Comparing SaaS vs. On-Premise Solutions
Insurers considering implementing SaaS solutions should understand how they differ from traditional on-premise systems. Here’s a quick overview of the key differences between the two.
Hosting
While on-premise solutions are hosted on local servers, SaaS applications are hosted by third parties on the cloud.
Pricing Structure
Insurers pay an annual or monthly subscription fee to use a SaaS platform, either as a fixed cost or a per-user basis. On the other hand, on-premise solutions are typically purchased upfront, with ongoing maintenance costs.
Scalability
SaaS solutions are typically more scalable, as it’s easier to add more licenses and modules as needed to accommodate the insurer’s changing needs, which can be a cumbersome and costly process for on-premise software.
Customization
On-premise solutions may offer more customization of features to suit the organization’s unique needs and requirements. However, this will often require a larger upfront investment and may not be upgraded as easily as a SaaS application.
Security
Both SaaS and on-premise solutions can be subject to data breaches and hacks. However, SaaS vendors can more easily roll out security patches and updates to address security vulnerabilities. Insurers with an on-premise solution will need qualified IT professionals on staff to implement and monitor system security.
Challenges and Considerations in Adopting SaaS
Despite the many benefits of implementing SaaS for insurance companies, there are several considerations to keep in mind to ensure a smooth transition:
- Data Security: Large-scale data migrations and cloud-based solutions should adhere to industry standards to uphold policyholder data security and achieve compliance with relevant laws.
- System Integrations: Insurers should make sure their new SaaS solution integrates with existing platforms. If the system is not compatible, it can create inefficiencies and redundancies in insurance workflows.
- Resistance to Change: Insurers should engage in proper change management to support team members during the transition and help them embrace the new technology.
How to Choose the Right SaaS Provider for Your Insurance Business
The insurance SaaS market continues to expand with ongoing digital transformation efforts in the industry. As such, it can be difficult to choose the right solution for your unique needs, given the growing number of options available. The following steps provide a basic outline of how to select the best vendor for your business:
- Assess Your Objectives: Determine the specific workflow or problem you’d like to improve (e.g., streamlining policy administration, enhancing customer communication, etc.).
- Identify Key Criteria: Make a list of the must-have features the solution needs to support your goals, additional useful capabilities, and budget restrictions to evaluate potential providers.
- Make a Shortlist: Identify the solutions that meet your criteria; consider additional factors like industry reputation and customer reviews to narrow down your options.
- Complete a Demo: Request a demo or free trial of the shortlist solutions to test them out firsthand and see how they compare side-by-side.
- Make a Selection: Based on the information gathered and hands-on experience using the platform, choose the solution that best fits your needs in terms of functionality, budget, company reputation, and other criteria.
How Insuresoft Can Help
SaaS solutions are a step forward from clunky, slow-to-upgrade on-premise software. However, not all SaaS platforms are built alike. Some insurance SaaS solutions have limited functionality or only support certain workflows.
But Insuresoft’s Diamond platform offers one holistic system for all P&C product lines and core processes like claims management, policy administration, billing, and more.
Delivered via secure cloud hosting with Microsoft Azure, Diamond Cloud is an affordable and scalable solution that supports bi-monthly upgrades and hands-off maintenance of the core platform.
For over three decades, Insuresoft has provided insurers with an innovative digital insurance platform to help teams engage policyholders, adapt to changing market conditions, and scale distribution to stay ahead in today’s competitive landscape.
Schedule a demo to see how Insuresoft can help position your business for success.
