Outsourced Software Development: A Game-Changer for Insurance and InsurTech Firms

With fewer barriers to entry, the insurance industry is thriving with new players entering the markets. The upward momentum picks up further as InsurTech proliferates and penetrates the sector. Such trends have offered established giants and emerging startups a level playing field to differentiate and earn an appreciable customer base.

As the insurance industry is becoming more and more digital-first in nature, the lesser the time-to-market for introducing new products the more first-mover advantage insurance firms and insurTechs will have in this competitive market. However, to reduce the time-to-market for new products, not everyone has the resources to host an in-house insurance software development team to build custom InsurTech tools and platforms faster without compromising on quality. The problem aggravates when one considers the talent crunch and gaps within the industry. In this context, outsourcing such projects can be an excellent move to obtain the desired product without worrying about constraints like hiring time, project delivery time, budget, or talent that goes into it.

Here is a look at the benefits of outsourcing for insurance software development.

Why Should Insurance Companies Outsource Software Development?

Outsourcing insurance software development services can fetch the following benefits:

1. Ability to Focus on Core Competencies

Operating an insurance business is not easy. The skills and expertise required are fairly nuanced. With such niche requirements, adding another feather to your hat in the form of a tech expert can be far too demanding. Further, it can drive the spotlight away from the insurance business’ core competencies as businesses enter a whole new digital turf. As such, you will find yourself more preoccupied with feature sets and specifications than identifying ways to improve processes or personalize insurance products and services.

Outsourcing insurance software development services can be helpful on this front as organizations can stay laser-focused on their core competencies while expert developers can handle the development aspect. Such separation of function and delegation of tasks allows all stakeholders to play to their strengths and make smarter choices for guaranteed results in their respective spheres.

2. Access to Talent With Domain Knowledge

As mentioned previously, the current talent crunch is debilitating. According to IDC, the shortage could touch nearly four million developers by 2025! Such a shift can be worrying for businesses that are late to join the digital revolution or plan on securing talent in the long run. With events like the Great Resignation and Quiet Quitting, scoring and retaining talent would be one of the most challenging tasks.

However, that’s not the case when you outsource talent. Insurance software development outsourcing grants access to a wider pool of professionals with most of them carrying the required skills, experience, and expertise. In some cases, it is very much possible to engage an entire pre-selected software development team that can cater to your insurance-specific requirements. Once you have the right team on the task, building the perfect InsurTech solution would be a piece of cake.

3. Faster Time to Market

Naturally, when you have a team of skilled professionals who excel at the job at hand, you can expect faster and high-quality results. That would not be the case for in-house talent as you would have to spend considerable time (and money) onboarding, orienting, and training the staff before they start working on your project.

With outsourced software developers, you have employees that can get started from the word go. All you need to do is brief them on the project and offer inputs every now and then rather than continuous handholding. You can also rope in professionals who have worked in the insurance sector and understand the nitty-gritty of the industry. They can also anticipate possible obstacles that can come in the way of development. As a result, they can draw from their experience to shorten the development cycles and deliver the InsurTech solution of your dreams.

4. Cost-Effective Development

Cost efficiency is one of the greatest thrusts to the popularity of insurance software development outsourcing. Building an in-house InsurTech development team is costly. Everything, from hiring to training, could cost far more than the break-even point of the product under development. This fact is even more true in the case of cash-strapped insurance businesses that are just getting started. Not to mention that talent retention is equally expensive, especially once you hold on to the development team for maintenance purposes.

Against this backdrop, outsourcing software development comes as a breath of fresh air as insurance companies will only have to pay for the exact deliverable. No investment needs to be made in hiring, training, or infrastructure. They can simply pick and choose an outsourcing plan, which is often tiered and modular to match business budgets and requirements, to get more out of your investments.

5. Security and Regulatory Compliance

The insurance industry is highly regulated. As such, insurers cannot afford to get lax about regulatory and legal compliance. At the same time, given the sensitive and confidential nature of the data involved, security and privacy should also top their checklist of software development musts. These demands are non-negotiable and require a mature understanding of the technologies involved in the insurance landscape. So, you want nobody short of an expert to shoulder such a responsibility.

Once again, doing so means recruiting an expert and retaining their services. On the other hand, outsourcing security and compliance experts means they can almost instantly get down to business and ensure that your products are up to standards – even if they were to change overnight!

6. Sustainable Continuous Development

Hiring in-house developers is a long-term commitment. You will need them for maintenance, upgrades, and updates, which means that you will have to keep them at hand even when your product is live. However, since such developers have primarily worked for you, they might struggle with thinking outside the box. They could lack innovation or a fresh perspective on how they can better the solution.

In contrast, outsourced developers have worked for a variety of customers and have multi-faceted exposures to allow cross-pollination of ideas. As a result, they can cherry-pick different industries or companies to identify what would be best for your insurance business. Plus, you can engage them only for periods when you genuinely require their assistance, which would cut down your financial liabilities.

Closing Thoughts

Whether you outsource talent to build something from scratch or configure a whitelabel solution, you will need the right set of hands for the job. In either case, insurance software development outsourcing can be an excellent option for insurance businesses. Such a choice offers tangible benefits in the form of strategic resource allocation, faster results, higher productivity, greater compliance, and innovation. These advantages are sure to put your insurance business on the map!

Case in Focus

A leading independent insurance company was on the lookout to develop claims-related products that leveraged cutting-edge technology. When they came to us with this requirement, we tapped into technologies like OCR, AI, and ML to develop a claims management platform that catered to their business requirement. Further, it integrated with the business’s existing tech stack to work as a useful extension. Such intervention eliminated claims errors and expedited the claims cycle for a smoother and richer customer experience. Their success story is an exemplary case study that you can read about.