Software applications for the in- surance industry have evolved over time. After the industry graduated from its earliest
days, in which customized
unique to each company
were dominant, various
emerged for specific functions required by carriers.
From the beginning
of this century, the insurance software market has
matured to where almost all
vendors offer an “all-in-one”
set of software (a “suite” of
applications), which cover
underwriting, billing, and claims. Similar
suites are available on the accounting
side, however, each component in a suite
may not be the most popular, or “best of
breed” program for that function.
As a result, one question often gets
asked today is: Should a carrier choose
a “suite” of core system applications, or
should it purchase “best of breed” applications for each individual function?
Before we go into the details, let’s exam-
ine some of the variables in this decision.
Suites: Most suites come with the
advantage of a consistent user experience
across all applications, and potentially
provide a pricing advantage. Additionally,
maintenance is usually easier and, there-
fore, cheaper since the IT staff only need to
learn how to maintain a single system.
While a suite is usually based on
multiple functionalities developed on
a common platform, in some cases the
suite can also be a pre-integrated set of
disparate systems supported by a common set of tools.
Best of Breed Applications
The advantages of buying individual,
well-regarded applications, on the other
hand, include higher-quality applica-
tions, lower licensing costs (if only one
of the functionalities is needed), and
faster rollout in comparison to full suites.
In most cases, the
following presents indus-try-practiced solutions to
common variables involved
in choosing a suite or a
K The size of the orga-
nization: larger insurance
companies may have so
many existing systems that
replacing all of them with
a suite may be practically
impossible, or at the least
cost-prohibitive. This often results
in best-of-breed applications being
preferred at such organizations.
Conversely, smaller organizations
prefer to start off with suites for ease
K Breadth of the product line (e.g.
whether the product line is a single
line such as automobile coverage vs.
whether the product line is diverse/
complex): diverse lines tend to favor
best-of-breed as handling them require configurability typically found
in best-of-breed applications.
K The scope of the implementation:
if the organization only needs to
improve one of the functionalities,
such as claims management, it may
not be ideal to attempt complete
replacement of a suite. In this case,
the organization usually looks for a
K Diversity of operational markets (
single state/jurisdiction insurer vs. large
insurers having a diverse product
offering or a wide geographic reach,
generally seem to prefer best-of-breed
application components in order to
Which is better for your company, suites or
By Aman Aggarwal