The analysis, sponsored by Socotra, found that the benefits of shorter time-to-market exceeded the costs by as much as 40 times
Austin, TX (Oct. 11, 2022) – Coretech Insight, an independent advisory firm focused on core technology for the insurance industry, has released a report finding that insurers that launch products faster by deploying cloud agile technology are able to generate a revenue gain of as much as $25 million over five years.
Insurers know that speed and agility are key to growth. But they struggle to quantify the value of investing in new technologies in terms of speed-to-market and revenue.
To address this challenge, Coretech Insight conducted a breakthrough study modeling three real-world scenarios to assess the economic value of speed-to-market, using publicly available industry and government data and validation by senior industry participants. The results compared product launches for incumbent systems against new cloud-native agile platforms.
The report also found that:
- The benefits of shorter time-to-market exceeded the costs of implementing and operating new cloud technology by a wide margin—as much as 40 times the cost of implementation.
- Cloud agile technology can trim product launch times to a matter of months versus typical timeframes of a year to 18 months for outdated systems.
- Cloud agile platform product launches enable insurers to capture revenue that would otherwise be lost to extended launch timeframes.
- Insurers are forfeiting millions of dollars in new premiums due to delays common with incumbent systems.
“Speed-to-market should be a primary decision factor for insurance executives when evaluating core solutions for new products,” said Jeff Haner, founder of Coretech Insight. “A technology solution like cloud agile platforms that enables insurers to rapidly launch new products – in some scenarios years faster than incumbent systems – will provide tremendous gains by capturing revenue that would otherwise be lost. The benefits of speed-to-market far outweigh the costs of technology and implementation. With their speed, flexibility, and operational efficiencies, cloud agile platforms offer an alternative to the challenges and costly delays common with incumbent systems and provide insurers an essential lever for growth.”
The research study was sponsored by Socotra, a provider of cloud-native core technology for the insurance industry.
“A modern core platform can greatly reduce ongoing maintenance cost, eliminate disruption from upgrades, and reduce the pain and frequency of eventual system replacements,” said Dan Woods, the founder and CEO of Socotra. “However, it’s not as straightforward for insurers to measure the ongoing financial benefits of faster product launches. That’s why Socotra commissioned this industry-first study to quantify the business value of speed-to-market. With this report, insurers will be able to compare the tradeoffs of deploying incumbent systems vs. cloud agile platforms and make better decisions to support long-term financial growth.”
About Coretech Insight
Coretech Insight serves P&C insurers and coretech solution providers by providing research, frameworks, and insights to bring them together to accomplish great things. An independent advisory firm, Coretech Insight was founded by Jeff Haner, a former Gartner analyst. Prior to Coretech Insight, Jeff served in senior IT and advisory roles with Deloitte, Oliver Wyman, NJM Insurance Group, Gartner, and BriteCore. For more information, visit www.coretechinsight.com.
Socotra brings unparalleled speed and ease to insurance technology. With Socotra’s modern core platform, global insurers and insurtech MGAs can accelerate product development, reduce maintenance costs, and improve customer experiences. Socotra provides open APIs, a product-agnostic data model, and out-of-the-box capabilities to manage the entire policy lifecycle, making insurance innovation faster, easier, and more affordable. For more information, visit www.socotra.com.
Source: SocotraTags: Agile methodology (agility), Cloud, core systems, Core Systems Modernization, legacy system replacement, legacy systems, Modern Core Technologies, Socotra