Migrating Insurers from On-Premise to SaaS

Digital transformation is a reality for most IT departments, but they can find it a huge challenge to deliver alongside the business-as-usual demands of running a busy, complex technology estate. Maintaining in-house solutions is costly and time consuming, requiring significant resources and as requirements and subsequently solutions grow it only adds to the pressure IT managers are under to keep infrastructure and systems up-to-date, efficient, and secure.

Running software on-premise requires a capital investment in IT, such as machine servers, network infrastructure, etc. Specialized skills are needed to manage, maintain, and secure those servers and networks.

By adopting SaaS, you’re effectively offloading a lot of that IT infrastructure required to run your processes and applications - things that are required internally in the business or digital services you want to offer to your end clients. So, insurers reduce the infrastructure cost of the skilled people needed to manage it and offload that onto a SaaS provider.

Typically, a SaaS provider offers a subscription or ‘pay-as-you-go’ model, empowering insurers to transform a large upfront investment in infrastructure and major software license fees into a more manageable, flexible payment plan. This ‘pay as you go’ model allows you to sign up quickly and cancel at any time, giving you full control over your financial commitments.

Overall, a SAS provider can offer a lower total cost of ownership.

With a SaaS provider, you get access to software that is always up to date as the provider develops new enhancements or uses the latest technology, such as AI (artificial intelligence) and machine learning. This can be made available to your organization and your team so they can benefit from it much faster than in an on-premise deployment.

In an on-premise environment, deploying software, setting it up, and creating processes are all time-consuming tasks. Introducing change or adopting new features often necessitates a new IT project, which can be a daunting and expensive endeavour. However, with a SaaS provider, these concerns are alleviated. We've observed that organizations and their IT teams, who often have numerous priorities, need help to keep up with the latest software updates in a single department. This is where a SaaS provider can truly shine, offering a cost-effective and time-saving solution.

However, with a SaaS provider, that department always has access to the latest software. 

Furthermore, being hosted in the cloud empowers your team, with their unique skill sets, to collaborate more effectively, even when working remotely. The ability to access the software from anywhere in the world fosters better collaboration between your team, your partners, and your customers, a significant advantage of a SaaS provider. 

Security is often cited as a challenge to adopting SaaS. It’s a fear of change or sharing responsibility with a SaaS provider. However, because SaaS providers support many different customers worldwide, they focus on security, data protection, privacy, and compliance.

These providers make substantial investments in security, which translates to a significant advantage for you. As part of your SaaS subscription, you can now redirect your resources from worrying about security in your own organization to other critical areas, thereby maximizing your operational efficiency. 

Running the solution on-premise requires expert people, potentially external security experts, other vendors, and partners to secure that software in your on-premise environment. But with SaaS, that’s all included in the subscription fee.

By offloading that responsibility, the insurer can focus on its core business—selling new and existing insurance products—and less on securing software applications.

So, with a lower total cost of ownership, improved accessibility to software updates and the latest technology, increased security, and a better focus on core business, SaaS should help insurers bring new products to market in a much shorter time. 

Traditionally, the release of a new insurance product necessitates a new IT project. However, with the adoption of SaaS, insurers can experience a significantly faster time to market for new products. SaaS provides a streamlined approach that allows insurers to introduce new products and services to the market more rapidly.

SaaS providers, particularly those specialising in a specific type of solution for insurance companies, have built extensive domain knowledge. They'll be experts in their services, applications, tools, and business processes. 

As experts in their services, SaaS providers can provide support much faster than traditional on-premise deployment models.

Anyone who's experienced running or using an application on-premise knows that when things go wrong, it can be challenging to find the root cause and determine where the problem lies. Is it in the software? Is it in the software's configuration? Is it in the IT environment? Who knows? 

Time can be wasted.  

Insurers want to use and have confidence in their system. They want to use the service to support their business. With a SaaS provider, they have complete knowledge of the application and the environment that it runs in.

SaaS providers are better placed to support the insurer or the end users, and they can do so much more quickly with fewer or fewer dependencies on partners or local IT teams.

Check out our companion piece by Darren on the barriers to SaaS adoption among insurers.