It would be difficult to dispute how critical core systems are in the insurance business – they are the enablers of significant in-and-out interactions and help drive efficiency and profitability for an insurance company. Today, many insurers and MGAs are accelerating their transformational journeys by upgrading their policy, billing, and claims systems. And new research suggests that demand for new core implementations is not slowing down.
A new research report from SMA examines core systems deals completed in 2022 from 18 of the top solution providers in the market today. The transactions span insurers and MGAs and support personal, commercial, and combined personal/commercial lines business. What is clear from the research is that the core systems buying is consistent, which, along with continued deployments across all segments over the past few years, indicates a strong market.
However, a few trends are emerging. The 2022 deals show a growing percentage of Tier 4 insurers and MGAs purchasing core systems, indicating how important digital transformation has become to compete in the P&C market, with more smaller insurers deploying new capabilities. In addition, nearly all deals were deployed in the cloud versus on-premise, signaling a need for modern technology to support core deployments.
As digital transformation continues to drive innovation, we will continue to see investments in core systems. But it is important for buyers to be mindful of business objectives when choosing solutions – the wrong fit can obstruct goals, but the right solution can enable a digital insurance enterprise to reach new heights.
For more information on core systems deals and buying trends in 2022, read SMA's recently published research report, "2022 P&C Core Systems Purchasing Trends: Insurance Market Dynamics Shift Foundational Technology Needs."
This blog entry has been reposted with permission from SMA.
