SaaS Platforms Give North American Insurers Speed, Agility

Rhea-AI Summary

North American insurance companies are modernizing their IT infrastructure by adopting new core systems and SaaS platforms, driven by evolving policyholder demands and rapid changes in industry practices, according to the 2024 ISG Provider Lens™ Insurance Platform Solutions report. The report highlights that outdated IT systems are impeding insurers' ability to innovate and compete. SaaS platforms and modern tech frameworks help insurers manage risks, acquire customers, and enhance policyholder services. However, integration with legacy systems poses challenges. The report also notes the potential of generative AI to improve insurance operations, though it is currently in the pilot phase. Major insurance providers like EIS and Majesco are recognized as leaders, while companies like Accenture ALIP and Guidewire are also notable players. The report underscores the importance of data modernization and the elimination of data silos.

Positive

• North American insurers adopting SaaS platforms and modern IT systems to enhance agility and competitiveness.
• EIS and Majesco named leaders in both Life and Retirement, and Property and Casualty Insurance Platform Solutions.
• Potential of generative AI to improve efficiency and productivity in insurance operations.
• Smaller companies successfully migrating to SaaS for faster product rollouts.

Negative

• Integration with legacy systems poses significant challenges, requiring extensive hard coding.
• Legacy systems' high operational costs and maintenance issues.

Companies are replacing or augmenting legacy systems in search of product innovation, technology integration, ISG Provider Lens™ report says

STAMFORD, Conn.--(BUSINESS WIRE)-- Insurance companies in North America are upgrading systems and adopting advanced technologies to overcome the limitations of decades-old IT platforms, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Insurance Platform Solutions report for North America finds that evolving policyholder demands and rapid changes in practices and methodologies are forcing insurers to replace legacy technologies with new core systems and software-as-a-service (SaaS) platforms. To compete, firms need new ways to provide quotes, underwrite risks, process and settle claims and carry out other processes.

“Outdated systems are holding North American insurers back,” said Dennis Winkler, director, insurance industry, for ISG. “Those that have moved decisively to modern IT infrastructure and SaaS are unlocking their full potential.”

Further changes coming over the next decade will make agility vital for competitiveness in North America’s life and retirement insurance industry, ISG says. In the property and casualty insurance industry, inflation and bigger losses from natural disasters are likely to drive aggressive cost-cutting and efficiency efforts.

Modern technology frameworks enable companies to better manage risk, acquire customers and serve current policyholders’ needs, the report says. But integrating them with legacy core platforms often requires extensive hard coding, so some insurers are operating new and old side by side when it is too risky to migrate existing insurance policies. Integration issues also complicate cloud migration if older systems cannot match the performance of cloud-native software.

Many life and retirement insurers are integrating new and legacy technologies via APIs, which has eased the introduction of process automation, new services and improved customer experiences, ISG says. Some, especially in North America, are modularizing core systems and processes as microservices, achieving better product customization and integration with insurance agents’ systems.

North American property and casualty insurers are the most aggressive adopters of SaaS for core systems, the report says. Most larger players keep older systems but adopt SaaS for new policies. Smaller companies have largely migrated to SaaS already, especially for faster product rollouts.

Insurance companies in North America are at the forefront of experimentation with generative AI (GenAI), but the technology is still in limited pilots, ISG says. If integrated into core workflows, GenAI may help insurers improve efficiency and productivity throughout the lifecycle of a policy.

“AI as a whole has a significant potential to improve insurance operations,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Modernizing core systems is the first step to enable AI adoption, so providers are helping insurers get started on that transition.”

The report also explores other trends related to North American insurance platforms, including the growing importance of data modernization and the elimination of data silos.

For more insights into the technology challenges of North American insurance companies, including the high cost of running legacy systems and the dwindling workforce to maintain them, along with advice on resolving those issues, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Insurance Platform Solutions report for North America evaluates the capabilities of 50 providers across two quadrants: Life and Retirement Insurance Platform Solutions and Property and Casualty Insurance Platform Solutions.

The report names EIS and Majesco as Leaders in both quadrants. It names Accenture ALIP, BriteCore, Duck Creek, EXL Life Pro, FINEOS, Guidewire, Infosys McCamish, INSTANDA, Insurity, NTT DATA GIDP, OIPA, OneShield, Sapiens, Verisk FAST and Vitech as Leaders in one quadrant each.

In addition, Origami Risk, Sapiens and Zinnia are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

Customized versions of the report are available from Infosys McCamish and Verisk FAST.

The 2024 ISG Provider Lens™ Insurance Platform Solutions report for North America is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240712533594/en/

Press Contacts:



Will Thoretz, ISG

+1 203 517 3119

will.thoretz@isg-one.com



Julianna Sheridan, Matter Communications for ISG

+1 978-518-4520

isg@matternow.com

Source: Information Services Group, Inc.

FAQ

Why are North American insurers adopting SaaS platforms?

North American insurers adopt SaaS platforms to modernize their IT infrastructure, improve agility, enhance risk management, and better serve policyholders' needs, as per the 2024 ISG Provider Lens™ Insurance Platform Solutions report.

What challenges do insurance companies face when integrating new technologies with legacy systems?

Integrating new technologies with legacy systems often requires extensive hard coding and can complicate cloud migration if older systems cannot match the performance of cloud-native software.

Which companies are recognized as leaders in the 2024 ISG Provider Lens™ Insurance Platform Solutions report?

EIS and Majesco are recognized as leaders in both Life and Retirement, and Property and Casualty Insurance Platform Solutions.

What potential does generative AI have for the insurance industry?

Generative AI has the potential to improve efficiency and productivity in insurance operations, though it is currently in the pilot phase according to the report.

What is the significance of data modernization in the insurance industry?

Data modernization and the elimination of data silos are important for improving insurance operations, enabling better risk management, and integrating new services with legacy systems.