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Different pricing and business models for companies selling enterprise software to insurers in the US
Hello! Thanks for your question about the different pricing and business models for companies selling enterprise software to insurers in the US. The short version is that most companies are offering software solutions that at a minimum address the core functions of the industry including policies and claims. They then choose to differentiate themselves in the market place by offering value-added options from industry experts.
Below you will find a deep dive of my findings.
METHODOLOGY
In researching your request I looked for companies who provided technological solutions to insurance companies. From there I refined the search to newer US companies by reviewing corporate websites and industry reports. I also sought to find companies where there were distinct differences in their business plans or marketing strategies.
ONE, INC.
Founded in 2005, One, Inc. is a Californian company that provides an all-in-one system scalable Software as a Service (SaaS) solution for property and casualty (P&C) insurance providers which is either cloud based or on site.
Business Model — All in One Solution
Their sole business focus is the provision of a single comprehensive software solution for businesses working within the insurance industry.
One, Inc. market themselves as industry experts who will work with their clients to “support and grow” their companies from inception with software that incorporates standard business functionalities such as payments, reporting, customer relationship management with the industry specific components of policy and claims.
This allows them to have more control over their production costs, marketing and growth as they are not reliant on their programs needing to integrate with third party platforms. This immediately removes the risk that such a reliance exposes them to, giving them an edge over competitors and allowing them to run an agile, responsive business.
Their business model enables the software to be used via the cloud or on site, allowing them to cater to a broader range of companies with an attractive message of being a scalable “faster, lower cost” and “less risk” comprehensive solution.
Price Model
Pricing information for One, Inc.’s software solutions is not publicly available and whilst they talk about the components being integrated, it doesn’t indicate if they can be purchased separately or must be purchased as a single package. In cloud and on-site solutions are offered and this presumably comes at different price points.
SOCOTRA
Founded in 2014, Socotra is a San Francisco based company offering “next-generation” digital solutions to insurance companies both in the US and internationally.
Business Model — Two Tier Highly Configurable
As a more recent company, Socotra has taken a client centric approach when building their software solutions. They have put their clients’ needs first and taken on board criticisms, concerns and wish list ideas when creating their product.
Socotra’s marketing focus is on providing “robust”, “safe” and gives their clients control in choosing how they “create, manage, retrieve and update” their data.
They have given a greater level of configuration control to their clients to enable them to be “responsive and agile” to changing customer needs. They promote the reliability of their software and discuss the in-built safe guards which sees client data stored across multiple sites and robust backup measures.
Their business model further builds on this by including test environments and audit histories, giving their clients confidence in the strength of the solution through transparency.
Their software platform, however, is solely focused on industry specific components of policy information, underwriting, claims, billing and reporting. It has the capability to integrate with third party software such as archived data and other business functions.
Price Model
Specific pricing information for Socotra’s digital platform is not publicly available, however, it appears that they offer two tiers to the clients depending upon their business needs. An insurer would not need to purchase the entire package if the base tier was suitable.
CHSI TECHNOLOGIES
Founded in 2010, CHSI Technologies is a Nevada based company that describes itself as focusing on the future of technology for the insurance industry and built its business model around offering cloud solutions.
Business Model — Modular Packages
CHSI Technologies highlights the “deep experience” and knowledge of the insurance industry, demonstrating their capacity to provide robust and “meaningful solutions” that focus on their clients.
They utilize a SaaS approach and offer their services via the cloud and use this as the basis of their business model. By having SaaS located online, they can offer their solutions to “top-tier” clients as well as smaller businesses who have equally small budgets for technology.
Self-described innovators, CHSI Technologies promotes their product as being “best-in-class” and built by “insurance program administrators” and not sales people; robust software solutions supported by a team who understands the industry and will work with clients to provide the right advice and software product. By using a modular approach individual businesses can create scalable solutions that will allow for growth as needed.
As with One, Inc., by providing an end to end solution they are minimizing risk and embracing an agile business model by not being reliant upon third party platforms.
Price Model
CHSI has priced their product by the module or individual component to allow their clients to choose what they need at the time of purchase, with the capacity to add on further modules as their business needs change.
Some modules do have dependencies and this means that the software is offered in price tiers.
For multi-line pricing the base package available is the CRM tier offering CRM, committee management, member reports, member reports scheduler and distribution groups for $75.00 per month per user.
The GROUP tier is $2,000.00 per month plus $150.00 per month per user. This tier offers the additional services of quoting, billing and reports for both.
The PROFESSIONAL tier is $5,000.00 per month plus $125.00 per month per user with the additional features of ACH, lock box and credit card integration, quoting — advanced, accounting system integration, commission management, policy endorsements, cancellations, schedule management, email integration, batch document insert, broker portals, member portals, summary claims data import, media library, safety inspection tool, claim intake and renewal applications.
The ENTERPRISE tier is $7,000.00 per month plus $100.00 per month per user. Additional modules offered at this level include claims system integration, custom report maintenance, database read access, database read/write access.
Workers Compensation has a different price point respectively for the GROUP, PROFESSIONAL and ENTERPRISE tiers, being $1,500.00 per month, $4,500.00 per month and $6,000.00 per month. The individual user per month fees remain the same.
GUIDEWIRE
Founded in 2001, Guidewire Software Inc. headquartered in California with an international presence, they offer technology solutions to P&C and workers compensation insurance providers. They also offer implementation and assessment services for P&C claims in North America.
Business Model — Flexible Out of the Box Functionality
Guidewire Software Inc.’s business model is about offering a comprehensive solution that can be easily implemented with little modification. Based in the cloud, the solution focuses on providing core functionality, together with data and online portals for accessibility.
They rely on their long history and the quantity of clients they serve in supporting their claims of providing effective, effective solutions that combine flexibility with ease of deployment. They also offer value-added services including assessment.
As an older company, they have grown in strength through their own client base increasing as well as through the acquisition of other companies. Guidewire focuses on its clients and their customers and in doing so have sought to be responsive and adaptable to changes in technology and customer habits with their trademark being “Adapt and succeed”.
They market their product as flexible and encompassing the full life cycle, removing unnecessary road blocks for clients and their customers.
As with other companies who offer end to end solutions, Guidewire's business model allows them greater control over a fluid marketplace so that they can be proactive in how they move into the future.
Price Model
In line with their marketing approach of an adaptive and agile product, Guidewire offers three price points for their product. All at Once is the complete package where the focus is on providing a risk free, swift roll out. One at a Time is a modular approach to implementation, growing only as the clients’ business needs change. Some Combination is a mix of the previous two.
Whilst the tiers are available, the actual pricing information for these tiers is not publicly available.
INSURITY
Acquired by Genstar Capital in 2011, Insurity has been offering software solutions to P&C insurance providers for over 25 years. They are headquartered in Connecticut and provide core technology and data solutions to “commercial, personal and specialty” insurance providers.
Business Model — Engagement
Insurity chooses to differentiate from competitors by focusing on “how they do what they do” and focuses a lot of their marketing customer engagement, being agile and embracing diversity. Their business objectives include business analytics and risk management, together with scalability and “rich functionality”.
They deliver their products quickly and with predictable outcomes, ensuring that any risks are minimized.
From the software perspective itself they offer strong functionality and an enterprise management approach for policy, billing and claims decisions and reinsurance.
They offer their clients implementation services with dedicated support teams who take a project management approach to rolling out new technologies to their clients. Insurity offers hosting with up to date servers and support and value adds to this by also offering business process outsourcing to customers who need additional support.
Not much information is available on the actual software itself, however, I chose to include it in this response because they offered a different way to differentiate themselves in the market place by focusing on client engagement and customer service.
Price Plan
Unfortunately, there are no price plans publicly available.
APPLIED SYSTEMS
Acquired in 2013 by Hellman & Friedman, Applied Systems is an Illinois based company with some presence internationally. They were founded in 1980 and have been “pioneers” in the technology sector for insurance companies.
Business Model — Value Added Services
As with the other companies discussed, Applied Systems offers a comprehensive range of services and products including day to day management as well as core features needed by an insurance provider. They differentiate themselves in the marketplace by offering value-added services and products including performance management and an application that allows for policy information to be shown on mobile phones or tablets. Also, offered is a range of professional services such as “consulting, education, training and support” either on site or via webinars.
The software solutions provided by Applied Systems focus on expansion and growth for their clients by providing data in a way that allows the client to make better business decisions They talk about connectivity and creating “better customer experiences”.
Specifically their software allows an insurance provider to manage their core business and supporting functions, as well as enabling online connections to their customers and other insurers. For business management, the software enables insurance providers to leverage better outcomes.
Much of the information online for Applied Systems focuses on these areas of differentiation rather than the specifics about what their software does. It has been provided to demonstrate another alternative for capturing market attention.
Price Plan
No price plan is publicly available for Applied Systems.
CONCLUSION
To wrap it up, the companies providing technology solutions for the insurance industry are competing in similar arenas in terms of the actual software and technology being used, with some providing more complete solutions and others offering modular options to suit smaller agencies. They use a variety of marketing strategies to help capture larger areas of the industry sector.
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