Why Legacy Mindset Around the Insurance Technology Stack is Holding You Back — And How to Fix It

The insurance industry is known for its conservative approach, which has served it well in managing risk. However, as technology orthodoxies evolved over the last decade, insurers did not strike the right balance between caution and embracing innovation. Insurers must step outside traditional norms to realize what their technology stack can achieve with the flexibility and efficiency that innovation offers.

For years, insurers were advised to adopt suite solutions from a single large-scale technology vendor for policy, billing, claims, and all core operations. Adopting a suite solution made sense in the past when data exchange, integration complexity, cost management, and compliance were significant concerns.

However, those risks and challenges have been largely mitigated by modern SaaS providers. This shift enables insurers to adopt an integrated best-in-breed approach, partnering with the best solution for each operational area, integrating data and platforms seamlessly to enhance results.

Outdated Traditional Suite Model for Core Systems 

Relying on a single technology vendor (“Suite”) for core platforms is legacy thinking. Best-in-Breed models benefit insurers in a similar way consumers choose specific products to match their personal needs - whether it’s a Samsung television, a Whirlpool refrigerator, or an Apple iPhone. Locking in a single core platform vendor for diverse business needs, given the investment, changing technology landscape, opportunity costs, and integration needs, creates bottlenecks, prioritization issues, and overall business risk.

Modern APIs enable seamless integration between platforms from multiple vendors, offering flexibility and adaptability. Insurers no longer need to be tied to one vendor’s product lifecycle, strategic roadmap, or upgrade schedule. With an integrated best-in-breed approach, insurers avoid bottlenecks that occur when focusing resources on one part of a suite while neglecting others, such as policy, billing, or claims, and avoid prioritization between revenue generation, service, and compliance activities.

An Integrated Best-in-Breed Model Improves Results

Given the pace of change in technology and the scale of the insurance value chain, no vendor’s platform can be number one in each function. Suite solutions expose these weaknesses while locking in carriers to potentially decade long bottlenecks. A best-in-breed model allows insurers to optimize each area by selecting top technology that integrates smoothly with others.

For instance, a vendor specializing in claims management can provide a best-in-class claims platform while connecting via API with top platforms for policy and billing. This integrated modular approach results in faster time to market, reduced costs, and continuous updates—ensuring the insurer always operates at peak efficiency.

The key to success in this model lies in partnerships that embrace collaboration. It’s not just about adopting best-in-breed technology, but ensuring these platforms work seamlessly together to drive measurable results. Insurers that leverage integrated best-in-class solutions unlock agility, innovation, and growth.

The real question isn’t whether insurers should embrace an integrated best-in-breed strategy, but when they will. While the traditional suite model may offer convenience, it limits forward momentum and growth. Now is the time to embrace a carefully curated approach designed to drive success and meet the demands of an evolving industry.