Build It and They Will Come
I've been helping build technology solutions for the life insurance industry going on more than fifteen years now… and I still feel like a newbie sometimes. I've been fortunate to see the rise of the Internet and how technology has made a significant impact on the way our industry operates.
However, looking back its been a long slow road to where we are today. One of the things that seems slow us down is this never ending debate within the carrier's walls about if its better for them to build or buy a solution.
Many years ago technology platforms were very expensive and most vendors were not truly educated on what the distributor and carrier really needed. This made the justification to buy a very hard one. Even though building technology was not their core competency, the carrier could design, build and support a system cheaper, and most cases better than vendors.
Fast forward ten to fifteen years to today. Hardware prices have dramatically fallen as the horsepower has increased. Vendors are much more attune with the needs of the market and have proven track records of quality delivery at a fair price. The market has vastly changed and aggregation at the distributor level is now critical. Distribution wants platforms that allow them to manage all of their carrier partners in a single location. Whether it is pending case status, commissions, electronic applications or electronic policy delivery the market is demanding single source platforms.
With that said most insurance companies still go through the same process of a buy versus build strategy as they did ten to fifteen years ago. In a lot of cases carriers are still deciding to build their own systems thinking that if they build it they (distributors and agents) will come.
Don't get me wrong I think we would all agree that there are times when a carrier's platform better serves the purpose and that having a duel resource isn't all bad. However, if you were to ask any distributor that works in a multi-carrier environment I would be willing to bet that nine out of ten would say if they had their choice they would rather use a system that helps aggregate data into single systems.
As carriers reevaluate themselves into today's economy they should consider the benefits of vendor supported models. Initial cost shouldn't always be the factor. Consider your distribution and their needs. Also how much is it going to cost to support a platform that is build for one carriers purpose and how fast will it become out date.