28/10/2022

How Software-as-a-Service (SaaS) is Transforming Insurance

It’s difficult to speak about digital innovation without ever mentioning Software-as-a-Service. This model has broken the barriers of technology and enabled enterprises to digitalise their systems at lightning speed. In this article, we provide a detailed overview of SaaS solutions, including their benefits and future trends for the industry.

What is Software-as-a-Service (SaaS)?

Software-as-a-service (SaaS) is a model where software applications are hosted on the cloud, accessed via the internet, and delivered as a service to users. SaaS is an alternative to traditional desktop or server-based software that has been around since the 1980s.

The main difference between these two models is that with SaaS there is no need for you to install any software on your computer. Instead, you access the application through the web browser using a web interface. This means that all data is stored in the cloud rather than on your computer.

SaaS products are typically used to automate and optimise processes, enabling businesses to save resources, time, and money. They are often sold directly to businesses rather than individuals.

Types of cloud services

There are three main types of cloud services made available from third-party providers to enterprises through the internet. Each serves a specific purpose, but they all share the same goal of facilitating the flow of user data between the enterprises and the client, optimising operations. Let’s have a look at these three:

SaaS- Software-as-a-Service

As mentioned earlier, SaaS has become one of the most popular methods of running software. Software applications are hosted on the cloud and clients access the application through a web browser, dashboard, or API. It often works through a subscription-based system, in which customers pay a recurring fee to receive ongoing services without having to purchase the product itself.

PaaS- Platform-as-a-Service

Platform-as-a-service (PaaS) offers developers the ability to build and deploy apps quickly while providing the underlying infrastructure required to support those apps. PaaS allows developers to focus on building their app rather than worrying about how it will be deployed. The service provides tools to create databases, servers, load balancers, and other components needed to host an app.

IaaS- Infrastructure-as-a-Service

Infrastructure-as-a-services (IaaS) is another cloud service offered by third parties. This service allows companies to rent computing resources, including storage, memory, processing power, networking bandwidth, and even virtual machines. IaaS can be accessed via APIs, command line interfaces, or graphical user interfaces.

Payments-as-a-Service: the future of payments 

Another type of cloud service that we haven’t yet discussed is Payments-as-a-Service. This model is a mix between Software-as-a-Service and Infrastructure-as-a-Service, specific to the payments industry. PaaS providers offer various solutions and payment capabilities, such as payment hosting, reconciliation and settlement, claim disbursements, and cross-border payments.

This model became particularly popular in the last couple of years as the payments industry has gone through ground-breaking innovation and impactful changes. PaaS providers also help insurers manage the growing security and fraud concerns, as well as comply with the ever-changing regulatory requirements. Partnering with a PaaS provider enables you to focus on other critical areas of the business while still ensuring that you deliver excellent customer payment experiences.

How SaaS is transforming insurance 

Digital transformation in insurance is deeply connected to the rise of SaaS and the growth of insurtech. This is because adopting SaaS solutions has proven to be the quickest, most efficient way to digitalise systems. And by adopting solutions that are built and maintained by third parties, insurers can allocate their resources to other core areas rather than IT maintenance.

According to Mckinsey, 25% of insurance operations will be automated by 2025 thanks to the use of SaaS solutions to improve processes such as underwriting, claims processing, smart contracts, and payments. SaaS solutions enable a full digitalisation of processes and operations and quick delivery.

To stay competitive in such a fast-paced industry and meet the changing needs of customers, insurers need speed to market. They could do it by themselves by building software in-house, but this is a longer, more complex, and more costly process. Given the wide range of SaaS solutions available, covering unique and essential needs, partnering with third-party solutions is a relatively easy decision to make.

Advantages of SaaS for insurers 

The main advantage of using SaaS is that it saves time and money. With SaaS, insurers don’t have to install software on their computer. Instead, they just log into their account and use the service.

This means that insurers don’t have to pay for software licenses, maintenance fees, and other costs associated with installing software. In addition, they don’t have to worry about updating the software because all updates come automatically through the cloud. Another benefit of SaaS is that insurers can access their data anywhere and anytime. They can access their data from multiple devices, which makes it easier for them to stay productive.

To sum it up, these are some of the most significant advantages of adopting SaaS:

Accessibility– SaaS solutions can be accessed anywhere. All you need is a browser and an internet connection. This makes it easier for teams to collaborate and access the same services, regardless of where they are based.

Lower costs- With SaaS, insurers don’t have to build software from the ground up and have no fees with software maintenance and updates. This means they can save money and redirect their investments into other key business areas.

Scalability– SaaS solutions are easily scalable to meet the insurer’s needs. This is particularly beneficial for insurers looking to expand to new markets and reach new customer bases.

Quick deployment- SaaS solutions are ready-to-deploy and installed in the cloud, making them easier to integrate with your systems. They are much faster to deploy than traditional software solutions so that you can speed up the time to market.

Disadvantages of SaaS for insurers

The disadvantages below are more considerations that insurers should keep in mind when choosing their SaaS solutions. They aren’t particularly negative, but they are worth noting:

Lack of control – If you build the software in-house, you have complete control of it. SaaS solutions are owned by third parties, so you have less control over them. However, third parties are also responsible for maintaining and updating their software, so this wouldn’t be your concern.

Security and data concerns – As we all know, protecting your business and customer data is crucial. When choosing a SaaS provider, make sure they comply with all data management and industry standards so your data is secure.

Connectivity requirement -Since the SaaS model is based on web delivery, if your internet service fails, you will lose access to your software or data.

Range of applications – While SaaS is more popular than ever, you may not find the exact solution you need in the market. However, most SaaS solutions are highly customisable to meet the unique needs of every business.

SaaS in insurance: future trends 

According to Statista, the global spending on SaaS in 2021 was $152 billion. 80% of organizations rely on at least one SaaS application for their operations, with large enterprises using more SaaS solutions than smaller enterprises. A BetterCloud report found that organizations with more than 1000 employees use on average 177 SaaS applications.

As technology continues to evolve, more insurers will adopt SaaS solutions. Let’s take a look into some of the most popular trends in SaaS and what the future looks like for this industry:

Integrations

When SaaS first came out, there was no integration solution. Products and services couldn’t be easily integrated, especially when insurers relied on traditional IT systems. Integrations are a considerable part of SaaS because they enable any enterprise, regardless of its IT system, to connect with any modern technology. Integration in SaaS also allows for partial automation of certain tasks by merging multiple applications into one.

Imburse offers connectivity to the entire payments ecosystem. There are many great modern technologies out there for payments, whether that’s payment methods, capabilities, or processors. Yet, enterprises still need to connect with them individually. Solutions like Imburse facilitate this connection, effectively enabling enterprises to save time, money, and resources, all while still benefiting from the innovation and solutions of the payments industry.

Low-code

Low-coders and no-coder development tools have been on everyone’s radar for the past few years, and the software industry is no exception. Because low coders are significantly more accessible than high coders, they let smaller tech companies and individual developers enter the scene, which allows them to diversify the market.

With less coding, projects cost less, so developers, designers, and project managers can focus their attention on innovating and solving the most important issues that their insurance company faces. Low coders enable insurers to quickly develop prototypes, allowing them to test out new ideas before investing too much time and energy into building an actual solution. Earlier this year, Imburse announced its partnership with Mendix, a low-code software platform, enabling enterprises to more easily, quickly, and efficiently manage their claims operations.

Artificial Intelligence

McKinseyestimates that AI investments can drive up to $1.1 trillion in potential annual value for the insurance industry. AI is a disruptive technology that has many use cases and benefits. Some of these benefits include smart automation to streamline claims processing, using chatbots to improve customer service and satisfaction, and, lastly, making the underwriting process more accurate and speedy.

These are just some examples of the trends that will continue to be around for years to come. SaaS is expanding quickly, and the opportunities it brings to insurers are too advantageous to be missed.

About Imburse 

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using various payment technologies and providers around the globe.

In a world where consumers’ payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

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