In the ever-changing world of technology, smaller insurance companies may be finding themselves struggling to stay abreast of the most current trends of their businesses while ensuring compliance with state and federal regulations.
Relying upon traditional in-house software can be problematic for companies looking to grow their businesses. Small insurance companies including captives are often faced with software needs that go beyond traditional captive insurance technology or underwriting software. These companies need more from their software such as algorithms for risk management, claims processing and analytical reporting. For this reason, many such companies are abandoning traditional software systems for Software as a Service, also known as SaaS.
What is SaaS?
Software as a Service is provided by third-party vendors who specialize in the business sector of their clients. For insurance companies, especially small to mid-size entities, SaaS can be a huge game changer.
Instead of purchasing expensive software and the hardware necessary to run it, these companies partner with the SaaS vendors who provide up-to-date, optimum software service that is often cloud-based and accessible to clients through a variety of devices and platforms.
Advantages of SaaS
The benefits of choosing SaaS over traditional in-house software are broad and varied, but they can be narrowed down to some common factors that make SaaS a better choice for small insurance companies.
Less Waiting Time for Launch
Upon completion of the necessary contractual agreements between the client and the vendor, SaaS can be activated and ready for use in a very short span of time. As smaller companies know all too well, time is money and less waiting time means greater potential for profits. There is no need for installation or configuration of software. All that is needed is access and the system is ready to go.
Traditional in-house software must be purchased along with compatible hardware, and tech personnel is usually required to install, configure and keep the system up-to-date. As laws and regulations change, someone must continually monitor the system to ensure compliance.
With SaaS, no expensive equipment or software needs to be purchased. The SaaS vendor maintains the software and keeps everything running, secure, and current.
Because SaaS systems are stationed within cloud environments, they are not as restrictive as software that sits on a server. They can often be integrated into other SaaS solutions to make a customized system unique to the needs of unique clients such as captives.
The Bottom Line
Subscribing to Software as a Service (SaaS) can significantly boost profitability and ease financial constraints on smaller insurance companies wishing to grow their businesses and effectively compete with their larger counterparts.