Technology research firm Gartner released its report on megavendors in January, which highlighted the parts that shape a successful service provider in this sector.
What is a megavendor? Gartner explains, rather academically, that this group includes service providers which target a large portfolio of insurance solutions, such as tailored insurance software and services. The need for this unfolding of services has further been fanned by the digitisation of the entire financial services industry; it is driving the need for vendors to offer robust digital platforms that can be tailored to the needs of specific insurance lines.
“Megavendors are evolving to build digital platforms by augmenting their core system offerings with additional capabilities, such as digital front ends, analytics, Internet of Things (IoT) support and cloud enablement,” Gartner says in the report, Insurance Megavendors Shift Focus to Digital Platforms. SAP, CSC and Oracle are the main competitors in this space, of which SAP was named by Gartner as the leader in four of the five digital platform categories that drive this sector.
“When we look at developing new tools and solutions for insurance, it is from a holistic perspective,” says Neo Mathe, industry value engineer at SAP. The company shapes solutions for clients around prebuilt templates, which are dictated by the nature of the client’s front office, middle office and back office. “Each solution is tweaked for a certain line of insurance but there is a golden thread that runs through these solutions,” he adds, “and the most important thing is that it integrates seamlessly.”
It starts with building a data store from every single transaction in the entire business, says Darrel Orsmond, industry head of financial services at SAP Africa. It’s not trying to supplement the processes at a later stage when you are trying to pull everything together to answer a specific question, he stresses.
This technology can be tailored to provide solutions for the entire office space – front, middle and back – explains Mathe, and it’s mobile. “These solutions are accessible anywhere and are available to be deployed on premise or in the cloud,” he says. It gives customers the flexibility of choice in the solutions they want for their company. SAP came out top in the Gartner report with regard to customer-centric solutions, product-centric solutions, and process-driven solutions, adds Mathe.
With these solutions, there’s no reason why insurers can’t immediately calculate profitability, pricing or solvency, advises Orsmond. “These solutions are architected in real time,” he explains. The infrastructure that SAP employs is a world apart from the traditional batch processes, which can take weeks to make these sort of calculations necessary for management and the rest of business, notes Orsmond. “It is a completely different world view of solving these complex problems,” he says.