Customer experience is a key competitive differentiator in the insurance industry. As such, insurers must invest in innovative softwares and platforms to build and strengthen relationships with customers.

However, when it comes to implementing a technology-based solution, insurers are always faced with the age-old question – do they build it from scratch or invest in a white label solution? As much as we’d like to hand you the answer, there isn’t a universal response to it. Your choice may vary depending on factors like your budget, digital maturity, resource availability, and much more.

In this blog, we will help you understand the different variables that influence this decision. It will help you can make a smart and right choice for your organization.

On that note, let’s explore the various factors to consider before choosing between buying a configurable and customizable solution versus building one from scratch.

Cost of Insurance Software

The cost of developing insurance software is determined by an array of factors, such as:

• Customizations
• Tech stack
• Time frame
• Maintenance
• Support
• Location

On the other hand, the cost of purchasing insurance industry software includes initial purchase price, licensing fees, and maintenance. To determine which approach is more feasible, insurers can compare the price gap between the two. This factor is particularly significant for new and smaller insurance businesses. It allows them to save costs and prevent technical debt in the long run.

Building software from scratch does offer potential long-term value through customization and control. However, the development is costly owing to various factors. These factors include high expenses associated with hiring software development experts, customization requirements, testing for quality assurance, and ongoing maintenance. Moreover, the insurance industry is highly regulated. As such, complying with ever-changing regulations and addressing data security can add to the overall expenses.

Time To Develop and Implement Insurance Software

Project timelines are an equally crucial consideration to bear in mind while choosing between building and buying.

On average, developing a software solution from scratch takes six to nine months. However, these timelines may stretch depending on the complexities of the application. You will also have to spend time testing the solution and ensuring that it meets the standards prescribed for the insurance sector.

In contrast, buying a white label insurance software means that you can get started in just a few days if not hours. These solutions are often customizable. Hence, you just need to configure them according to your insurance business requirements and implement them across your organization.

The former is more suited for when you require something highly specific and niche, and have the bandwidth to watch it come together. On the other hand, the latter would be an express solution if you want some quick software for insurance company where all you need to do is modify an existing solution. It would be an excellent choice for capitalizing on time-sensitive opportunities or as a band-aid solution until you develop something in-house.

Room For Customizations

One-size-fits-all software for insurance companies typically caters to the common needs of a large cross-section of businesses. As a result, they are not set up to easily accommodate changes or updates. Customizing such software can be expensive and difficult. In case the insurance business wants to tackle multi-faceted challenges and the insurance software implementation is a part of their digital transformation strategy, opting for cookie-cutter software may leave them frustrated. Since such solutions are not tailored to the company’s unique needs, the insurer will have to adapt their workflows to accommodate the new solutions, rather than the other way around.

Furthermore, it may be tricky to integrate such a solution with existing systems and data points, leading to data silos. If the insurance business wants an adaptable, scalable, and personalized solution that supports and seamlessly integrates with the existing IT infrastructure, then building software will be the right choice. To that end, cloud-based insurance software also emerges as a viable solution as it is flexible, scalable, and can easily integrate with the existing IT infrastructure.

Resources

After budget and time, resources are the final constraint that influences your decision on whether you should build an insurance management system from scratch or buy an existing one.

While time and investments are resources too, we’re specifically focusing on skill, talent, and capacity in terms of manpower. Insurers that have an in-house software development team can deploy them to work on the next project. They will deliver a well-aligned solution with granular control over the features and specifications that you would want from the solution. However, such resources are costly and often underutilized if you aren’t developing solutions year-round (which is often never the case for an insurance business).

On the other hand, buying a solution means that you have borrowed expertise at hand. Generally, an insurance software company will help you customize their solution to your specific use cases and applications or handhold you throughout the implementation process. It will also take care of maintenance and upgrades. As such, you will be making optimum use of the resources at hand while also gaining access to a diverse and experienced talent pool without having to worry about retaining them.

Conclusion

All in all, the choice to build or buy insurance software should be made after thoroughly assessing the goals, resources, and unique needs of the insurance business. While making the decision, insurers must account for factors such as total cost of ownership, scalability, and customization. Conducting a comprehensive evaluation of these factors will enable insurers to make an informed choice that aligns with their strategic objectives and long-term vision.

Read more: https://www.hituponviews.com/unveiling-the-power-of-insurance-software-for-advisors-and-web-3-0-in-the-industry/