Insurance software from the cloud: the Road to SaaS

Insurance software from the cloud: the Road to SaaS


“Today, it only makes economic sense for organizations with more than 100,000 employees to operate their own data centers. For organizations with fewer employees, it’s difficult to justify the quality of their operations if they want to remain competitive,” says Oliver von Ameln, Managing Director at adesso insurance solutions in an interview with the German trade magazine Vb Versicherungsbetriebe, thus making a plea for cloud technology and software as a service. The advantages are obvious, but insurance companies have many unanswered questions about how to implement these services.

The aim of this blog article is to help ensure that the “Road to SaaS” does not lead into the unknown.

Getting on the right track from the start

A well-thought-out cloud strategy can increase productivity and efficiency. An important prerequisite is a high degree of standardization and automation of deployment and IT operations. But whenever “the cloud” is mentioned, the discussion often revolves around the technology. But upstream, the biggest pain point is the complex operating model. This includes employees, processes, tools, control, sourcing, KPIs and performance.

A suitable roadmap is indispensable for procuring software for insurance processes as a service. This should include a fundamental analysis of the status quo and the requirements, including IT operations.

Stopovers on the “Road to SaaS”

Insurance companies should make the following intermediate stops on the “Road to SaaS” in order to make the vision of a “plug-and-play application landscape” a reality:

  1. It is important to have goals
  • Define a cloud strategy that includes a vision, goals and benefits
  • Define responsibilities and ensure “top management commitment”
  1. Analyze the application landscape and create an enterprise architecture map
  • Where are the pain points in the current application landscape?
  • Is the “end of life” of the current system foreseeable?
  • Which applications can be outsourced?
  • Would a „greenfield approach“ be useful?
  1. Review the legal framework / compliance
  • Is the client able to verify the compliance capability of an external service provider (SaaS provider)?
  1. Specific decision: which applications should be outsourced?
  • Define the size of the system context to be outsourced: is it for individual lines of busi-ness, applications, parts or the entire application landscape?

For this purpose, adesso insurance solutions offers discovery workshops in order to perform a due dili-gence process within the scope of a business case. This provides information about which applications can be outsourced and what effect the outsourcing will have on the TOC (total cost of ownership).

  1. Interoperability must be guaranteed

Before complete or even partial outsourcing of applications to the cloud, it is important to check, par-ticularly from an insurance perspective, if interfaces are available and if or how future-proof interoper-ability with third-party applications is ensured (e.g., DMS).

  • Basically, in the case of a partial SaaS reference, the on-premises systems must be opened up to such an extent that interoperability with peripheral systems is possible.
  1. Requirements: define the services

Precisely define the services that the SaaS provider is expected to provide for system operation beyond application operation after go-live and how this is to be done. For example:

  • Incident management
  • Disaster recovery
  • Service management
  • Service and support requests, and many more.
  1. Requirements: Application Management Services

Another IT service offered by SaaS providers is Application Management Services (AMS), namely software-side end-to-end support for applications and customer-specific customizations.

This includes, for example:

  • The number and scope of possible enhancements
  • Implementation of regulatory changes: how quickly are these implemented and how many are covered?

During the preparation of an outsourcing, it is important to define which AMS are needed.

  1. Migration

Migration projects in the insurance environment are very individual. There cannot be a “one-size-fits-all approach” here – the various lines of insurance differ too much for that to happen. The RFP phase should therefore address the issue of “data migration.”

A technically complex migration of critical business data from an on-premises source system to a cloud-based target system, for exam-ple when changing systems and providers, must proceed efficiently and be audit-proof. When develop-ing a migration scenario, there is the question of specific line-of-business requirements. For example, whether:

  • all data must be migrated at once or
  • data will be migrated gradually, for example, for new contracts and whenever changes are made to existing contracts.

The journey is not over

Once all these points have been taken into account and the applications have been successfully moved to the cloud, nothing stands in the way of further digitization in terms of faster processes and innovation cycles as well as creating a customer-centric frontends. Excellence in the core business can thus be supplemented with important components that enable insurance companies to stand out from the increasingly tough competition.

This blog post is the second part of a three-part series entitled “Insurance software from the cloud.” In the first post, we looked at this topic against the backdrop of digital transformation. This will soon be followed by a look at “Compliance and Security.”

If you don’t want to wait for the next part of this series, download our free whitepaper, Plug & Play – Application Landscape for Insurance Companies as Software as a Service (only available in German), now and learn what insurance companies need to consider when they want to obtain software as a service.

Are you looking to modernize your IT and are you thinking of switching from on-premises systems to a SaaS operating model? Then get in touch with us. Karsten Schmitt will be happy to answer your questions.

Do you have any questions or comments? Then please leave us a comment.

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