What is Software as a Service (SaaS) and How Does it Impact on the Insurance Industry?

SaaS in the insurance industry

If there’s one thing the digital world has plenty of, it’s jargon. Acronyms and abbreviations galore – each describing a new product or feature, designed and implemented to change the world (or at least your little commercial corner of it) in some miraculous way.

Which brings us to Software as a Service (SaaS).

SaaS in the insurance industry“Software as a What-Now?”

Software as a Service

OK, some explanations.

Quite simply, SaaS is the accessing of software and applications via the internet, as opposed to the more traditional method of directly purchasing and downloading it onto the drive of your computer.

This delivery of essential functions and services has been made possible by the steady evolution of the internet and its migration into ‘the cloud’. Applications that have been designed to perform a certain task no longer need to be physically installed as they are virtually hosted in the cloud, with the user able to call upon its service when required.

Social media apps such as Facebook or media sites like Flickr are SaaS examples at play in everyday life; with users accessing the platforms courtesy of an internet connected device (be that a mobile, tablet or PC).

In a professional, working environment we see the steady move towards SaaS and away from traditional business software solutions in all manner of areas such as with Microsoft 365 offering its different applications as and when required through the internet. As opposed to the entire package sitting upon each device in the office.

In fact, enterprise style applications such as Microsoft 365 is the very epitome of SaaS in operation. Software on-demand, only using the application you require at that particular time for that particular purpose.

As you might gather, this style of application use has a number of tangible benefits in the workplace

  • Cost-Effective – reduced need of hardware as well as no set-up and installation charges makes SaaS a cost-effective solution. Furthermore, as you only pay for what you use, meaning no redundant subscription and licence fees.
  • Scalable – Additional services or capacity are simply provided through the internet, without having to re-install and upgrade your system
  • Future Proof – As the software is delivered through the internet, you know it’s always up-to-date with upgrades and additions instantly added
  • Mobile – Businesses are mobile and so should the software you need to operate. SaaS has the capacity to deliver the application or service needed seamlessly across the different internet enabled devices in use. And, from whatever location you might be working.

As per the Facebook or Microsoft 365 examples, SaaS is already a significant aspect of our daily online activity both in and out of work. And there’s no reason to think that its momentum will be slowing down anytime soon.

Indeed, as businesses increase their migration (in whole or part) to the cloud in the coming years, so the reliance of SaaS is predicted to exponentially grow, with sales in SaaS expected to have doubled globally by 2020.

What does this mean for the insurance industry?

Well, while the insurance industry may have a reputation in certain quarters for not wholly embracing the advances of modern technology, the reality is that SaaS is already playing a major role in the sector.

As reported in an article in the Actuarial Post, approximately a third of all global insurers have adopted or trialled SaaS, with the widely held view being that it will increase in significance in the industry over the next five years.

Similar to all industries, the cost benefits will certainly have a significant bearing on the move towards more widespread SaaS adoption. However, cost is only a starting point.

  • Data management – In an industry which relies so heavily on data a service which can handle huge volumes without adding capacity burdens on a business is something surely to be embraced
  • Reporting – Again, with reporting so critical to the industry, utilising the ability to generate reports accurately, speedily and delivered to any location brings a visibility and efficiency to your operation
  • Marketing – Cloud-based tools to enhance marketing and putting schemes in front of the right people is another crucial area in which SaaS has the scope to make life easier for insurers and brokers alike. This might take the form of web analytics helping target traffic to your site (or focus your PPC campaigns) or specific marketing and CRM applications to develop customer insight.

We believe that technology should be introduced into a business to make life easier, to make work more productive and to help the business grow. This is the fundamental feature behind adopting SaaS. Tailoring the services you need and using them effectively and efficiently when you need them.

There have, of course, been concerns over security risks; loss of data and other breaches. And while they remain legitimate concerns, the risk still boils down to the same thing it always has – ensuring you carry out your due diligence. Have safety nets in places to overcome data loss in the cloud (such as backup systems) and ensure that your security measures, such as up-to-date encryption methods maintains the integrity of your system.

SaaS is here to stay, bringing with it tangible benefits to help the sector and improve the way businesses operate.

Welcome to the future.