Throughout the past ten years, many in the sprawling global insurance industry watched as others across the financial sector adapted to the inevitable digital revolution. In Canada, more than three quarters, or 76%, of people are using digital channels to conduct most of their banking transactions, with the strongest uptake seen in the younger demographics. But the majority of insurance applications are still completed using pen and paper. 

These organizations have become so large that modernization moves slowly. Long decision cycles hamper their ability to make strategic service improvements. Especially when it relates to fundamental process changes or implementing technology to efficiently capture new target audiences and address existing client needs.

While they wanted to realize the benefits of digital innovations, innovation for life insurers wasn’t going to be easy — for three main reasons:

  1. The considerable amount of analog processes that need to be digitized.
  2. The variability of data points used to calculate policies.
  3. The need to maintain the customer-advisor-insurer relationship throughout the application.

In seeking to address these problems, providers face a choice. Do you build an in-house digital option, or do you buy a Software-as-a-Service (SaaS) platform from a dedicated specialist? Which will give you the best return on your investment? 

In this paper, we will analyze both options to determine which offers the best opportunity for sustained growth. We will explore the key elements of the decision-making process which executives face when shifting their strategies towards an increasingly online consumer. Organizations must analyze how each potential solution will deliver against:

  • Time to market
    • What is realistic? 
    • How long will it take to be fully up and running? 
    • Will other systems or processes be affected? 
    • When will the platform be able to handle customer traffic? 
  • Return on investment 
    • How quickly will the platform generate additional revenue? 
    • Will it achieve the end goal? 
    • What is the cost difference between each option that will affect the payback period?
  • Organizational change 
    • How many new employees will need to be hired and how much training will be required? 
    • How quickly will it be picked up by existing team members? 
    • Are the other departments up to speed and ready to receive more business?
  • Customization, maintenance and security 
    • Is the need well addressed by the solution, or will there be a compromise? 
    • Can the platform iterate to new, improved versions quickly?

Making the right decision

The first two questions typically asked by the executive team before deciding on a new capital investment are:

  1. How long is it going to take?
  2. How much is it going to cost? 

If they are considering an in-house solution, both of these answers can be ambiguous. It is hard to estimate time and cost for something that hasn’t been done before. Both depend on a number of upfront choices the organization makes, such as who will be running the project, what other systems does it need to tie into, are any data migrations necessary, etc. 

Upper management may designate an internal team to carry out the scoping of the project requirements followed by its delivery. Team members will consist of stakeholders who understand the processes being digitized and who usually have other projects going at the same time. There will also likely be dedicated people brought on either as contractors or full time to manage the platform build, implementation, and ongoing functionality. 

In addition to the internal project team, transformative efforts of this magnitude require deep involvement from internal IT. Capacities are often constrained in internal IT departments, or there could be skills gaps. Hiring, training, and retaining all of  these staff members is a lengthy and resource-intensive process which can often slow down an internal build.

The majority of the other factors depend on how many resources are put towards the project. Is there sufficient staff to handle the building, migration, and maintenance required. Does this staff have the knowledge to do it well?  And, most importantly, are they encountering roadblocks from leadership? 

« Most estimates put DIY delivery at up to 2 years. »

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Over this length of time, the project’s scope can often change, adding further complications and delays, which in turn add more costs that will not have been budgeted. 

Compare this to delivering an ‘out of the box’ SaaS solution, and the implementation drops dramatically.

« For example, the Breathe Life Platform can be up and running in three months. »

This reduction in time occurs because a third-party provider will have experience across multiple projects and platform deliveries implementing solutions for a diverse portfolio of customers that exhibit common characteristics. 

They also either have a product ready to go or they are building on their existing platform architecture. Both are much faster than developing a new one. Because of this, the majority of their focus can go towards proper integration between dedicated systems, data migrations and onboarding, which can oftentimes be complex. Having a knowledgeable team with an existing platform come in and hit the ground running saves time in the overall scope of the project; it also means they are being held accountable and have good reason to make sure they stay on track. 

Achieving ROI

To achieve a return on your investment, it is first essential to clearly lay out what that return will look like to you. In the case of the individual insurance sales lifecycle, it is clear that digitization will have a significant impact on ROI. The ability to bring digitization to any part of the insurance value chain means that processing times will be shortened, risk levels will drop and productivity will increase. This will drive positive ROI. However, if you are choosing to build internally and the time to see the product live is upwards of 2 years, it is less likely that you will see this ROI quickly, if at all. 

It is also imperative to understand, in detail, all of the known costs, as well as ones that are hidden and perhaps harder to enumerate. When building yourself there tend to be many more of these hidden costs that spread throughout the organization, especially when multiple departments need to dedicate time to the project. For example, lost hours are not typically debited to the project and tend to spiral given the timelines are so broad. 

Beyond direct labour hours, there are then training hours once the platform is up and running, as well as hosting and ongoing management associated with the tool. It is also unlikely that everything will run smoothly from day one. Management should allocate budget to rigorous testing, bug fixes and patches. In short, when building you sign up to a much longer payback period with a less effective sales force for the duration. All of this decreases your chances of seeing strong ROI.

When buying a SaaS solution, the associated costs are more visible and ROI easier to estimate. The 3rd party provider will provide a defined sandbox of costs and time upfront that are both explained and signed off on before the implementation. With confirmed migration timelines and go-live dates, you know exactly when the platform should start generating revenue from previously untapped markets and customers.

« A conservative estimate puts buying a dedicated tool that is set up by an experienced team at as much as 10 times cheaper than attempting to do it yourself and 5 times faster. »

In a highly competitive landscape, the quicker you are to market with a functioning product, the sooner you will start realizing a return on your investment.

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Managing organizational change 

Organizational change is always slightly complex. As mentioned above, when building in-house, you will need to hire contractors or full-time employees and will be responsible for onboarding, training, and retaining them. This can represent a major investment of time and resources, so you need to ensure that you have both available to dedicate to the project.

Alongside this, you will need to ensure that these new teams coordinate with existing internal teams and that all employees, both old and new, are on the same page when it comes to executing on the project. Processes become entrenched in organizations and people stand behind the fact that ‘it was always done this way’ so why change? People management is one of the biggest causes of internal projects slowing down or grinding to a halt. This can require additional support from HR and management to ensure everything progresses smoothly.

Buying a SaaS platform means that you can avoid the majority of the issues involved in hiring new teams and empowering existing teams to embrace significant organizational changes. However, even when choosing to go with a SaaS platform, you need to understand that there will be some organizational push-back. 

First, employees, especially long-term employees, can be wary of new systems implementation. It is common for employees to wonder whether they will still be relevant, if they will be transferred to a different department, whether they will understand how to use the new technology, or even if they will lose their jobs. 

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Second, you will need to ensure that all departments are trained on the new systems and are ready to handle an influx of new business. In individual insurance this can mean call centres, underwriting, claims management, etc. Implementing new technology tools means that everything will move faster, and likely many departments will be affected by this. 

Navigating these changes as an organization can be very tricky. SaaS companies often understand this and provide you with tools to help you successfully manage this. 

The role of customization and maintenance

Customization and maintenance levels of the SaaS tool depend on your specific market and business niche. A very complex offering may well need much higher levels of customization than a box solution provider will be able to deliver on. While some SaaS platforms offer varying degrees of customization, this isn’t always the case. There are times when building in-house, while a longer and more expensive process, can provide you the exact product to suit your needs. 

However, more and more we are seeing SaaS platforms like Breathe Life that offer both customizations as well as API integrations for what they cannot do. It is often the case that you will use a variety of platforms which all integrate. This is the best solution to save you both time and resources and ensure you have a platform that fits all of your needs. 

On top of this, using an out-of-the box solution means you can have a platform that is always being iterated and improved upon as the provider will likely always be ensuring that their offering is the best and most consumer-friendly. You can also forget about regular maintenance costs and associated stresses; they are taken care of by the SaaS platform. 

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Living with the decision

It is one thing to choose how to bring in the digital revolution your company needs, but then you have to live with that decision. The key is to make not just the transition as easy as possible, but the ongoing management, too. A well-rounded choice will look deeper into the lifecycle of the product and how it will fare in years to come from both a cost and usage perspective, and whether it will keep delivering on target goals set in the beginning. 

No platform can afford to remain static after implementation. For consistent, positive customer engagement, there need to be further iterations that fix issues or bring on improved functionality. With a homegrown solution, these iterations happen slowly, if at all, and therefore there is always the danger that the interface and platform become obsolete. 

Meeting today’s customer expectations doesn’t set you up well for what’s around the corner. Keeping up with the demands of a tech-savvy audience is tough. Internally, people go back to their day jobs and continuous improvement objectives get side-lined. Comparatively, if you have a company with dedicated teams looking out for shifts in consumer trends who proactively bring on change and optimization to their offering based on the feedback of many different users, then you can be sure you, too, are moving at the pace the market demands. 

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Thought also needs to be given to scalability. Once you’ve achieved growth, can the platform scale to fit expanded teams and expanded scope? This might be easier with an externally built tool as the company will have experience in managing scaling and a broadening scope. The SaaS provider likely can also walk you through such a process and ensure your change management adapts for it. Combined with dedicated maintenance of the platform over time, along with custom reporting and analysis options, and buying the tool is frequently the better choice long term. 

Many companies also seek to digitize to reap the benefits of advanced data analytics and consumer insights. They help develop marketing strategies or product offerings that better serve their end customers and therefore increase their market share. A home-grown solution will have direct links into the companies own database and will, therefore, deliver detailed intelligence into the purchasing characteristics of their clients. However, this has its limitations. 

Though detailed, it is still only one dataset; partnering with a provider that has multiple users means different data sets that can be merged to offer anonymous trending insights for a whole industry, which can provide you with a powerful new direction. 


So what does it mean to innovate? Most casual definitions suggest things like the development of new ideas, new tactics or products better suited to the here and now, as well as the undefined niches of the future. 

The degree to which people and businesses innovate has an unbelievably broad spectrum. One might be forgiven for thinking that grand plans for the next steps along the path untrodden typically form in the boardrooms of large corporations where executives deliberate their industry’s future. But is that actually the case? Or are these people in fact too busy with integral, operations that often build on desired growth year on year, who may just blink as the opportunity for innovation passes them by? 

Often incumbent organizations are fully aware of the need to evolve over time, but the realities of being able to flex to ever-changing market stimuli is sometimes harder to achieve. Across the globe it can take entrepreneurs and small businesses seeking plug and play solutions to close those gaps left in the market by the slower moving organizations who define the industry.

With the advantages of agility, low overhead, and the ability to take risks because the reward equation makes sense, it is easy to see why innovation often trickles upwards from entrepreneurs and small businesses. As such, we believe that the biggest ‘bang for your buck’ is achievable through letting a third-party provider meet the challenges of your operation with purpose-built tools for the job at hand.