Given that software, services, and applications are increasingly virtualised, organisations are realising how advantageous this is to keep their focus on core business functions. Instead of inundating ICT departments with hardware and software maintenance matters, these business units can integrate more effectively with the rest of the organisation and deliver better value around strategic priorities.
Many assume the adoption of SaaS to be all about technology. And while there is some truth to it, the broader impact on the enterprise cannot be ignored. SaaS has the power to fundamentally change how an insurer not only develops solutions but also services customers in a more connected environment.
To remain competitive in an increasingly complex business environment, with a more demanding customer base, insurers need to ensure they can deliver innovative solutions to market rapidly and adapt those offerings as feedback is received. SaaS is one of the mechanisms to achieve this.
Instead of business waiting for ICT to provide infrastructure or software solutions to support the new initiatives, business can now use tailored SaaS offerings. These can be purchased cost effectively for short periods of time to introduce the offering to the market and can then either be customised or decommissioned as the market reaction is analysed.
Even though insurance (and other financial services industries) has always been data-driven, SaaS takes this to a more advanced level. Business intelligence and real-time analytical tools are no longer the exclusive domain of the largest insurers with the biggest budgets. Instead, there has been a democratisation of solutions, thanks in part to the popularity of cloud-based offerings.
Insurers no longer have to spend vast amounts of money to better understand the data they have. You just need to consider what insurtechs are doing to innovate and analyse the information. The incumbents are learning from this. And while the migration from a legacy approach to a more SaaS-driven one is not without its challenges, it is an inevitability for the digital era.
While SaaS provides for the development of more sophisticated or differentiated insurance solutions, it does not mean that only the most connected customers will benefit. Instead, products and services are delivered which meet a broader cross-section of market requirements or can take advantage of niche market opportunities.
In Africa, there is a significant disparity between the banked and the unbanked. The same holds true for those who are insured and those who are not. Being more open to innovations bought about by SaaS and the cloud, also result in a willingness to experiment with different payment models given the challenges of collected stop or debit order on the continent. Insurers are realising that they can adapt and compete with start-ups provided they have the executive support needed.
From data management to reporting and marketing, SaaS is already starting to transform insurance globally and Africa is sure to follow. The burning question though is how quickly will historic dependence on in-house ICT teams be replaced by business-driven solutions enabled by SaaS sourced product and service offerings?
Even though cost-effectiveness and ease of implementation are used as departure points to begin implementation, the benefits quickly scale as the market demands can be serviced more effectively in much shorter time frames.
The competitive landscape sees insurers looking at ways to try and future-proof their business. SaaS is one of the elements in this as it provides the flexibility needed to become more productive and offer tailored services in ways previously unimaginable.
Patrick Ashton is a managing executive at Cirrus
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