Analysis: What’s New About Capgemini’s PaaS Core System Offering?

Capgemini’s Insurance Connect cloud-based insurance platform carves out a new space among hosted core insurance processing options.

Global consulting firm Capgemini recently debuted Insurance Connect, which the global consulting firm describes as a platform-as-a-service (PaaS) offering featuring a preconfigured set of optimized services built on Guidewire’s InsuranceSuite. The solution provides insurers with implementation, integration, maintenance and hosting on a single platform, available on a flexible subscription basis, according to Capgemini. The announcement of Insurance Connect has left some industry observers wondering what’s new about it, apart from perhaps Guidewire’s entrance into the realm of hosted core systems.

Externally hosted solutions, including software-as-a-service offerings are not new to the industry – or even to Guidewire, which has provided hosted solutions in partnership with IBM, according to Karen Furtado, a principal of Boston-based research and advisory firm SMA. “The difference here is that it’s platform-as-a-service, not just using cloud in a pure private cloud manner,” she remarks. “That should help people to stand up the solution faster, speeding implementations and making them cheaper and more consumable.”

As with PaaS in general, Insurance Connect is more consumable because it is because its functionality is, by design, more limited than that a typical private cloud SaaS solution highly customized to a user’s needs – that’s the “preconfigured” and “optimized” part. Insurance Connect aims to provide “highly targeted solutions,” according to Capgemini VP Christina Colby, and is currently available in North America only for non-standard auto. It will be expanded to cover specialty commercial lines in North America and the U.K. during the coming year. In its current form, Insurance Connect is delivered in individual private cloud instances – not in a multi-tenant mode, according to Colby. The offering does allow for some “additional minor configuration and integration tailoring,” she emphasizes.

To the extent that Insurance Connect makes a tradeoff of customization in return for speed of deployment, it is to address a market segment that might otherwise find best-in-class software – and the necessary infrastructure to run it – out of reach.

Smaller carriers need the same capabilities as larger carriers in order to compete with them, but historically pricing for top-flight systems has not been proportionately lower for them, suggests Chad Hersh, managing director of Novarica’s insurance practice. “Also, many carriers don’t have the expertise to maintain those offerings, which leaves them having to choose between systems designed for the little guy or perhaps a BPO solution,” he says.

Hersh adds that, “having a solution that’s popular among both large and midsized carriers available as a PaaS/SaaS solution could create significant demand in the market, as it eliminates the high upfront cost, the need to maintain the solution, the need to manage upgrades, and many other hurdles common to core systems replacement.”

Unique Offering Among SIs

In that respect, the current announcement signals an attempt by Guidewire to compete for carriers that might not otherwise have been its customers. However, multiple sources affirm that the Capgemini platform is designed to be vendor-agnostic and will likely feature other insurance core system software in the future. Many vendors currently offer hosted solutions today, with or without partners, but Capgemini’s platform approach could enable the firm to carve out a unique space in the insurance core systems market among systems integrators. (Editor’s Note: See also IIR’s reporting on MFX’s alliance with Cover-All to provide hosted core system and ancillary capabilities on the multi-tenant SaaS model.)

Capgemini’s market positioning may be a smart play, but it can also be seen as the manifestation of the larger trend of supply chain horizontalization, suggests SMA’s Furtado. Insurers have approached cloud offerings very cautiously, particularly with regard to core system capabilities, so uptake can be expected to be slow. “Currently a small percentage of insurers will be interested, but it’s where the future is heading,” she says. “I think we’re on the early side of a trend.”

“Going offsite is not so significant, but going offsite to scalable infrastructure is very different,” Furtado adds. “Cloud offerings tend to be less vertically focused. We are on the early side of vertical offerings in the insurance market.”

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at or (503) 936-2803.

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