Outsourced Software Development for InsurTech Firms

In the changing world of technology InsurTech companies are using cutting edge software solutions to shake up traditional insurance practices. Many InsurTech firms are opting to outsource their software development as a move enabling them to concentrate on their core strengths while tapping into skills and advanced technologies.

InsurTech, which blends insurance with technology, is changing the insurance sector by introducing methods to handle risk, enhance customer interactions and streamline processes. From tailored insurance offerings, to claims processing InsurTech enterprises are reshaping the industry landscape.

This article explores the advantages and tactics of outsourced software development, for InsurTech businesses showing how this approach can foster innovation, effectiveness and expansion.

The Rise of InsurTech

InsurTech companies are successful based on their ability to quickly innovate and respond effectively to what the market is asking for. Outsourcing software development allows these companies to deploy the best talent available worldwide, leveraging state-of-the-art technology and reducing or avoiding delays in delivering their product.

• Lemonade, a unicorn-backed InsurTech play that uses AI and machine learning to provide tailored insurance coverage plans as well as immediate claims processing. It allows companies to double down on their expertise in AI algorithms and customer experience while outsourcing sections of software development.

Focusing on Core Competencies

Insurtech can focus on operations such as their core business (underwriting, risk assessment and customer relationship management) while returning complex software development to third-party vendors.

• Hippo Insurance, with its dynamic home insurance policies, opts out of software development in order to seamlessly integrate IoT devices and data analytic. This emphasis on core competencies gives Hippo the ability to develop innovative insurance solutions that differentiate them from traditional insurers.

Outsourced Software Development Advantages

There are several advantages InsurTech firms gain by choosing to outsource software development, from cost savings and access to expertise in different technologies or industries, these options give them an advantage.

• Cost Efficiency. By outsourcing, you can cut those costs significantly-benefiting from lower labor rates in other regions without losing quality. As a result, InsurTech companies can reduce costs here and allocate resources more efficiently rather than being forced to spend on another necessary element.
• Access to Expertise. Outsource partners have the specific skills and expertise that might be difficult to find or at a cost too high to maintain in your own company. This type of access to specialized skills enables InsurTech companies in applying the latest available technologies and their best practices into their solution offerings.
• Scalability and Flexibility. One of the biggest benefits to outsourcing is that it allows companies the flexibility to staff up or down as needed based on project requirements. This level of scale is essential for InsurTech startups in order to react quickly and effectively to changes in the market, consumer needs.

Strategies for Successful Outsourcing

InsurTech companies must have fool-proof strategies in place to get the most benefits out of outsourcing, allowing for a successful partnership and palatable results.

1. Choosing the Right Partner

Choosing the right outsourcing partner is important. InsurTechs should explore opportunities to partner with experienced healthcare investors who have a focus on the entire life sciences ecosystem and can provide valuable technical guidance. Nowadays it is convenient and cheaper to outsource IT to places like Mexico. You can find the best software development companies in Mexico specialized in various industries especially in the insurance field.

InsurTech companies might want to partner with vendors familiar in building financial applications having stringent information security measures and rapid release cycles at the time of selecting an outsourcing partner, like N-iX.

1. Efficient Communication and Cooperation

One of the key elements for success with outsourcing is effective communication, frequent updates, strong documentation practices and well-established workflows to connect in-house teams with outsourced developers.

For example, InsurTech firms can leverage collaboration tools such as Slack, Jira or Confluence to keep their in-house and outsourced teams on the same page about project goals, timelines and deliverables.

1. Secure and Compliant

With the kind of data insurance companies handle, security and compliance are crucial. The partners, to whom work is outsourced should also be compliant which basically means they need to meet strict standards of security and satisfy existing regulatory requirements that ensure the use of customer information remains trustworthy.

InsurTech companies who are working with an outsourcing partner must ensure that the provider could comply with regulations such as GDPR / HIPAA etc., and has strong data encryption and access control mechanisms.

Case Studies in the Real World

There are many success stories emerging of how this greatly benefited InsurTech firms and they have been able to innovate and achieve growth through outsourcing.

Case Study: Root Insurance

Root Insurance, a developer of auto insurance based on how people drive and not according to their demographic group or location, has tapped outsourced software development shop EPAM Systems (the firm that designed the application Ballmer showed off) for its mobile app and backend systems. This setup also allowed Root to get its inventive product to market quickly and increase efficient scale as users join in.

Case Study: Trov

Trov – Outsourced Mobile Development Platform, a provider of on-demand insurance for personal items. This allowed Trov to refine its business model and grow the products being offered via app while providing a holistic experience.

Conclusion

InsurTech firms can use outsourced software development solutions to innovate, scale and stay competitive in the fast-paced insurance industry. By selecting the right partners, maintaining strong communication and being serious about security and compliance, InsurTech are able to outsource their non-core functions in order to focus on what they do best from a strategic perspective for long-term success.

As InsurTech matures, outsourcing will remain an important lever for firms providing sustainable and long term value to their customers.