Just because insurance companies can build custom IT solutions doesn’t mean they should. Despite being immensely resourceful, insurance companies are built to constantly compete in their ability to offer quality coverage at affordable costs, a race of logistics and financials, not software development and IT maintenance.
Here are some key points to seriously consider before taking on the risk of in-house or freelance development to modernize your insurance business:
1. It’s a big gamble
Custom development may be tempting but the risks are high. Many insurers in recent years have invested hundreds of thousands of dollars or more into custom IT solutions that had no meaningful impact on the company before being abandoned for of-the-shelf alternative. The reasons vary but are all rooted in the fact that building software is well outside the core competency and primary focus of the business.
Quality varies greatly among developers and, in the worst case scenarios, they will have little understanding of the insurance industry. Code Project interviewed industry experts with experience hiring coders who reported an alarming number of programmers who apply for jobs and don’t actually know how to program. Exaggerated talent can lead to faulty product, missed timelines, and thousands of dollars in wasted resources.
2. Bad software slows down the sales cycle
Standard to insurance sales is the lengthy and intricate quote submission process between carriers and agents. While many carriers, both institutional and boutique, have tried to create software to streamline this process, they often are built by developers with little to no first-hand insight into this intricate process. This results in tools whose fundamental functions poorly fit the needs of underwriters and agents.
For example, many custom tools will end up relying on PDF uploads to communicate the insured’s personal information. When there’s missing or invalid information, those PDF files need to be edited, re-saved, and re-uploaded, or often just end up being emailed. Other solutions depend on web forms that are extremely expensive to update or reconfigure on a case-by-case basis.
These breaks in communication to simply get a quote can ultimately slow down the time it takes for those insurers to make a sale. Salesforce reports that 53% of all won deals are closed within the first 30 days, and that after a deal is six months in the pipeline, the likelihood of loss is over 80%. At these rates, it’s crucial that software helps to speed up the cycle, not hinder or complicate it.
3. Hiring is a hassle.
Although there are plenty of options available, it takes time to properly evaluate and hire a developer to build advanced tools for things like data capture, document generation, and integrations.
Thanks to IT World and Glassdoor, we know that it takes over a month to hire a coder in the U.S. Not to mention the time lost if that new hire doesn’t work out. Other hiring trends also note that the time-to-hire for advanced tech positions tend to increase year over year.
So, if you’re planning to hire developers, it’s going to cost you a lot of resources that could otherwise be spent acquiring new customers and growing the business.
4. In-house developers are expensive for contractual projects.
While it’s easier to vet and assure quality control with a full-time company hire, costs quickly rack up for little value in return, especially for small to medium sized businesses looking for tools to automate specific processes. Here are costs to consider when hiring in-house full time:
- Top competing developer salaries (average $81,100 per year)
- Health Insurance
- Additional Training
- HR Resources
- Payroll Resources
And, once you’ve invested the average $4,129 it costs to onboard a new employee, there’s always the risk they’ll leave or won’t perform.
5. Unexpected costs or fees.
Sometimes freelancers or in-house developers underestimate things like project timelines, expenses, and tools needed to get the job done. Once you’ve begun investing in product development, you might get stuck with surprise bills you didn’t plan for. Or, worse, if the estimates were way off you might have to abandon the project altogether, resulting in no new platforms or web forms at all.
The Solution: Use an Existing Platform to Streamline Quote Submissions
Instead of wasting time, energy, and money on bad development, leverage modern and scalable tools that have already been built to solve your problems. Surefyre has addressed the pain points that underwriters face by building a platform specifically for small to medium sized P&C insurers. This means:
- Higher efficiency, lower risk. As an industry-specific SaaS platform, Surefyre streamlines the submit-quote-bind process without any outside help or unnecessary expenses.
- More sales, less effort. Data capture, underwriting, quoting, approvals, and binding are all taken care of for you without having to consult a team of developers.
- All your systems working together, automatically. Your existing solutions for accounting, claims, rating and other back end functions can seamlessly connect through Surefyre to make your business more efficient and productive with less cost. No more re-keying data or wondering if your business can incorporate new underwriting technology into your workflow.
To learn more about how Surefyre’s platform is revolutionizing the insurance industry, click here.