Insurers that launch products faster by deploying cloud agile technology are able to generate a revenue gain of as much as $25million over five years, research has revealed.
Advisory firm Coretech Insight’s new report, sponsored by Socotra, found that the benefits of shorter time-to-market exceeded the costs by as much as 40 times.
The study modelled 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.
- $100million DWP personal lines insurer expands into personal auto
- $500million DWP personal lines insurer adds small commercial/BOP
- $1billion DWP multi-line insurer introduces cyber insurance nationwide
The results compared product launches for incumbent systems against new cloud-native agile platforms.
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technology can trim product launch times to a matter of months versus typical timeframes of a year to 18 months for outdated systems.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.
According to Jeff Haner, founder of Coretech Insight, speed-to-market should be a primary decision factor for insurance executives when evaluating core solutions for new products.
“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,” said Haner.
“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.”
Dan Woods, the founder and CEO of Socotra, believes modern core platform can greatly reduce ongoing maintenance cost, eliminate disruption from upgrades, and reduce the pain and frequency of eventual system replacements. However, he doesn’t see it 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,” said Woods. “With this report, insurers will be able to compare the trade-offs of deploying incumbent systems vs. cloud agile platforms and make better decisions to support long-term financial growth.”
Image and article originally from thefintechtimes.com. Read the original article here.