Insurtech UK CEO on the shift to SaaS
“We’ve seen a significant shift in business models, with more companies moving away from being regulated insurance entities to using a SaaS model,” stated Insurtech UK CEO Melissa Collett. She noted the trend is a response to the heavy capital and regulatory burdens of operating as a traditional insurer.
- The global insurance SaaS market was valued at $81.7 billion in 2023 and is projected to reach $156 billion by 2028. A 2025 survey of 250 U.S. insurance decision-makers revealed that over half of their firms plan to adopt a SaaS solution within the next two years. - Venture capital funding reflects this operational shift, with 43% of all insurtech VC investment in 2024 going to B2B SaaS companies—the highest share ever recorded. This trend is moving away from funding challenger insurance companies themselves and toward startups that provide technology to improve the existing insurance value chain. - SaaS platforms are significantly impacting claims processing by digitizing document submission and automating policy checks, which can lead to 20-30% faster claim processing times. For underwriting, AI-powered SaaS solutions from companies like Cytora and Artificial Labs help commercial insurers to price risks more accurately and simplify the placement of specialty risks. - Companies exemplifying this trend include Shift Technology, which provides AI-powered SaaS solutions for fraud detection, and Instanda, which offers a no-code platform for insurers to create and manage new policies. Another example is Bestow, which provides a comprehensive software platform for life insurers covering everything from product development to policy administration. - The move to SaaS is driven by the sheer volume of data insurers handle; two-thirds of firms manage at least 10 data sources for premium payments, and more than half process over 10 million transactions each year. Legacy systems struggle with this complexity, leading 21% of firms to report their premium receivables processes are ineffective. - By adopting SaaS, insurers can reduce the reliance on manual updates and data silos that are common with on-premise legacy systems. SaaS vendors provide continuous, automatic updates, ensuring insurers are using the latest features and security protocols without costly downtime or manual intervention. - The evolution of this trend is toward "Service-as-Software" (SaS), where AI agents handle the entire claims process—from intake and fraud detection to customer communication—with minimal human oversight. Gartner predicts that by 2029, this type of agentic AI will resolve up to 80% of customer service issues and cut operational costs by up to 30%.
