The Pet Insurance MGA’s Guide to Choosing the Right Technology Partner

Key takeaways

• Pet insurers have several insurtech partner choices. However, choosing the right one is challenging.
• You must evaluate a vendor based on their ability to understand your business, costs, and scale.
• This guide offers a checklist to evaluate technology partners and simplifies the process.

As a pet insurer, you have several choices of potential technology partners. However, choosing the right one is intimidating. For instance, is multi-tenant cloud infrastructure better than single? What about low versus no-code platforms?

This challenge becomes even more complex when you introduce cost-effectiveness to the mix. You could choose the lowest-priced vendor, but you might create vulnerabilities in your business. McKinsey and Company recently offered an example of how technological choices impact your insurance business.

It stated that regulators are paying attention to an insurer's technical debt. Your technical choices have an impact far beyond customer experience and platform usability.

This guide to choosing the right technology partner for your pet insurance business answers the questions above. In addition, you'll also learn how to translate tech choices into numbers that reveal bottom-line impact.

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TCO is central to measuring your insurance platform's ROI. In a bid to optimize TCO, many insurers choose the lowest-priced technology provider by default. This choice is a mistake. 

The lesson here is: Always view TCO from a long-term perspective. For example, if you choose a provider that lacks development resources, you'll struggle to scale your business. You'll have to revamp your tech platform to adjust to new market conditions, increasing your overall TCO.

Instead of lowering TCO, measure the ROI your tech partner generates. When evaluating vendors, you can screen them based on the following factors:

• Does the vendor understand how TCO impacts your business? Does it know the cost metrics you track and how it fits into your financial projections?
• Can they classify technical features based on nice-to-have lists versus must-haves? These lists directly impact your ROI.
• Do they offer a simple pricing structure that allows you to export into your projections?
• Are they proactive and suggest solutions with scaling needs in mind?

These questions will reveal the ROI a technology partner can offer you. Let us explore them in more detail.

Do they understand the cost metrics you track?

The ideal pet insurance tech partner is more than a plug-and-play solution. It must offer technical backup and preempt any hurdles you'll face when growing. Your partner must achieve these goals while minimizing costs.

For instance, cloud infrastructure choices offer an easy way to evaluate how "ROI-oriented" your vendor is. Good technology partners typically offer multi-tenant cloud infrastructure since this architecture streamlines costs without compromising quality.

As you scale, your tech partner must help you transition to a single-tenant system or a hybrid model. Ask your tech partner how they plan on achieving this transition or whether they have this need in mind.

Most importantly, can they justify their choices using ROI metrics and business impact? For instance, a multi-tenant cloud system might experience strain under too much traffic. Can your vendor quantify these conditions (number of visitors, server load, app loading times, etc.) and explain the impact on CX?

The right vendor will speak your language and understand metrics' role in your expense projections.

Do they understand nice-to-haves and must-haves?

Technology vendors can introduce advanced features into your tech stack. However, if you don't need these features during business-as-usual (BAU) scenarios, you'll increase your TCO and decrease ROI.

When questioning your pet insurtech vendor, check whether they classify technology choices based on your business' needs. For example:

• Is automating claims escalation and approval worth the investment? Can they quantify the hours your employees save and compare that to automation costs?
• Should you aim for a bare-minimum reporting suite to satisfy regulators? Or do you need unique features given your business strategy?

Look for a vendor that lists primary considerations and explains why some functionality is not worth your investment.

Are they proactive and transparent?

How can you evaluate an insurtech vendor for transparency? One of the easiest ways is to look at their pricing structure. The right vendor will explain all components of their quote and simplify billing. 

From the vendor's perspective, pricing their solution is complex. Your vendor must account for development, maintenance, and infrastructure expenses. Much like you need to simplify customer onboarding experiences, your tech partner must reduce intelligently and build the proper workflows.

Thus, any vendor that simplifies pricing will likely understand your design needs. Good vendors also keep the future in mind and proactively suggest enhancements.

For instance, a good technology partner will keep an eye on trends in pet insurance and suggest platform enhancements that boost CX.

Pet insurance is a fast-changing space. You must get to market quickly and introduce flexible products to keep pace. Your technology partner must assist this process instead of turning infrastructure into a hurdle.

Technology is one of the reasons small pet insurers can outpace larger ones. Large companies are saddled with inflexible legacy technology that makes it impossible to:

• Innovate and experiment with new products
• Build self-directed customer onboarding
• Simplify complex actuarial considerations when offering a quote
• Offer muti-or bilingual support to customers

Here are the most important factors to consider when evaluating a vendor's GTM speed.

How much comes out-of-the box?

An experienced insurtech partner will offer core functionality that you can use to launch your business quickly. This core platform will also be flexible enough to add more modules as you scale.

Look for policy handling, claims management, and self-service customer onboarding as standard with a vendor's package. Any vendor that offers less than these features will demand lengthy development times that delay your GTM.

Is it low code or no code?

Insurtech vendors offer both low and no-code systems. Both have their advantages, but low-code tends to provide more possibilities. No-code systems make sense if adopting a "technology on top" model. This business model works well for insurers that target less tech-savvy audiences.

A no-code solution will help these insurers' employees create products and test distribution. However, changing workflows and customizing no-code platforms can be challenging. No-code vendors create a templated solution that fits most insurers. You might find these solutions unsuited to your needs.

Low code platforms suit insurers built with a "technology-first" approach. In this business model, an insurer uses technology to transform everything from claims handling to customer onboarding. Low-code customization will thus give you the ability to tailor CX based on product choices.

The result is a memorable experience that leaves customers returning for more. In addition, you can customize employee workflows to suit your unique needs, reducing manual burden.

Is it API-first?

An API-first approach will help you easily integrate your backend systems with new data sources. For instance, if you wish to incorporate IoT data from pet wearables down the road, your tech partner's API library must give you the option to extend your business seamlessly.

This approach goes against the rigid insurtech system currently prevailing in the industry. You can evaluate a platform's customizability by asking the following questions:

• To what extent are workflows customizable?
• Who does the vendor integrate with? Does it empower you to choose partners and simplify integration through its API library?
• What resources do you need to execute any integration?

Many insurers focus on technical details when evaluating a technology partner and ignore the vendor's business. Pet insurance is a growing market. You will likely scale quickly. Can your technology partner keep pace?

Here's how you can evaluate the scale-related variables you must consider.

What is their service model?

The right insurtech partner will have templated service agreements and transparently communicate SLAs. Most importantly, their service model will not present growth barriers.

For instance, let's say you have to choose between two technology partners.

Partner A's ability to help you outsource all tech development sounds enticing. However, this vendor's business model is not scalable. You will encounter variable monthly costs based on developer resources used. As a result, you cannot gain a complete picture of TCO.

Partner B offers a scalable and flexible model by removing backend complexity and giving your developers the tools they need to build a great UI. B will thus provide stable prices, and you won't run into any resource allocation issues.

What is their security posture?

Can your vendor maintain security at scale? Data breaches can do more than ruin your reputation: They can land you in jail. Gartner predicts that 75% of CEOs will be personally liable for cybersecurity incidents by 2024.

Ask your vendor for security documentation and subject them to a third-party security audit. 

Are they transparent about their business situation?

As a growing pet insurer, you must avoid partnering with companies likely to go out of business in a year or two. How secure is your insurtech partner's capital structure, and what are their growth plans?

Migrating to new systems is a painful task. Choose a technology partner that understands its product well and has a proven track record in raising funds for growth.

Question four - Do they understand your GTM strategy?

Pet insurance MGAs have different needs from carriers. A good technology partner understands these differences and proposes functionality accordingly. 

Here are the most critical questions you must ask during the selection process.

Is the vendor's support proactive?

Scaling pet insurers will encounter issues. A choice in one portion of the platform can break something else. A good technology partner will proactively map dependencies and alert you to potential problems. 

They will also propose solutions and communicate costs transparently.

How robust is its audit system?

Pet insurance might lag the rest of the industry for now, but regulators are increasingly paying attention. Insurance regulators place stringent auditing measures. Your technology partner must offer a complete audit log documentation process that simplifies issue tracking and reporting.

Does the vendor understand CX?

Translating a complex price matrix and actuarial process into intuitive onboarding is challenging. Your technology partner must understand CX's role in your business and design functionality accordingly. For instance, the vendor must advise you of the front-end impact of backend changes.

If you automate a portion of the onboarding process:

• How must your UI change? 
• Will you maintain transparency with your customers despite these changes? 
• What are the costs of these changes?

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 And so on.

How Cloud Insurance powers innovative pet insurers

Since 2016, Cloud Insurance has helped insurers in 26 countries grow their business and deliver memorable customer experiences. Whether designing new products or experimenting with distribution channels, Cloud Insurance is your ideal technology partner.

Our partnership with American pet insurer Kanguro Seguro highlighted many advantages we bring to the table. Here are some of the highlights from our ongoing partnership with Kanguro:

• Launched an innovative bilingual pet insurance experience in 6 weeks.
• Decluttered a complicated pricing engine with our low-code solution.
• Advised on claims and policy-handling best practices.
• Created a self-service onboarding portal for Kanguro's customers.
• Simplified price quotations for customers by reducing the process to 15 clicks.

Our partnership with Kanguro is just beginning. Over the next few months, we will support Kanguro's new product launches and automate more significant portions of their workflows.

 Learn how Cloud Insurance tailors technical solutions that get you to market quickly and deliver memorable customer experiences.

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