skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view

Summary

In the last two years, software-as-a-service (SaaS) technology has established significant inroads into the normally cautious global insurance sector, with at least one-third of all insurers adopting it. SaaS adoption is now poised to move beyond horizontal support functions and become increasingly embedded in core insurance functions. However, concerns around compliance, reliability, and building a robust business case linger, slowing the potential impact of SaaS on the insurance industry.

Insurers increase SaaS spend significantly as doubts about compliance, risk, and the business case recede

A recent Ovum study shows that the level of SaaS adoption among insurers is remarkably consistent across both the life and non-life sectors. Larger insurers have slightly higher adoption levels, driven by greater deployment opportunities across their larger application ecosystems.

Unsurprisingly, early SaaS uptake has been for horizontal and collaborative-focused functions, with the majority of insurers’ email, backup/archive, and business continuity systems now being supported by SaaS. More significantly, SaaS is increasingly being adopted to support activities that have traditionally been seen as core and business-critical. The top-three core functions for which insurers are starting to use SaaS are policy administration, regulatory compliance, and customer services. Enthusiasm for SaaS is strongest among carriers in North America and Asia-Pacific, with over one-third expecting to significantly increase spend on SaaS in the next 18 months.

However, the difficulty of developing a business case in support of SaaS is a one of several barriers to wider adoption, and this is an issue in all the regions surveyed. A strong element of any business justification for SaaS to date has been the potential operational cost saving. This has gained strong traction in an environment focused on reducing IT spend.

Less emphasis has been placed on the more intangible but strategically more important benefits, such as improving the ability to launch new products, enter new markets, add new processing capacity, and respond quickly to market opportunities.

Ovum believes that issues with business case development will be overcome in the next two years, particularly as the Ovum survey revealed a positive correlation between insurers that are already significant adopters of SaaS and those that expect to see a significant increase in spend over the next 18 months. This suggests that early adopters in the sector are increasingly confident with the technology and are realizing a broad range of business and cost benefits, which are accelerating adoption within the organization.

Appendix

Further reading

The Current and Future Role of SaaS in the Global Insurance Industry, IT0004-000417 (December 2014)

Author

Charles Juniper, Senior Insurance Analyst, Financial Service Technology

charles.juniper@ovum.com

Recommended Articles

  • Service Provider Markets, Consumer & Entertainment Services,...

    MWC 2018 Highlights

    By Ronan De Renesse 27 Feb 2018

    Over 20 of our senior Ovum analysts and consultants attended this year’s Mobile World Congress in Barcelona at the end of February. In between meetings, briefings and presentations, our analyst team were blogging and tweeting about key developments, trends and rumors. Have a look through our daily MWC 2018 Highlights to find out what happened.

    Topics 5G AI IoT Cloud Payments SDN/NFV Smart home

  • Internet of Things

    IoT Viewpoints 2018

    IoT Viewpoints explore the IoT opportunity in 2018 and beyond. Download our latest e-book to get our newest collection of thought leadership articles on the emerging IoT trends, technologies and opportunities.

    Topics IoT

  • Consumer & Entertainment Services

    US pay TV: Is it facing an existential threat?

    By Adam Thomas 28 Mar 2018

    With US pay TV having endured the worst year in its history, thoughts have inevitably turned to the future. The likelihood remains that the immediate future will remain highly uncomfortable for everyone except the scaled multinational digital platforms.

;

Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700


Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

Email us at ClientServices@ovum.com

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 788 597 5160 or email us at pr@ovum.com

Contact marketing - 
marketingdepartment@ovum.com

Already an Ovum client? Login to the Knowledge Center now