(Roni Al Dor speaking at Sapiens’ client conference in Rome in 2019.)
Far from slowing down insurance innovation, the coronavirus crisis has turned out to be a catalyst. The crisis came at a crucial moment in the evolution of insurance core systems, as vendors were making the transition from integrated suites with added capabilities to a cloud-based platform paradigm. We recently spoke with Sapiens’ CEO Roni Al Dor to talk about the company’s strategy during a period of accelerated change, how it is progressing to the platform, software-as-a-service delivery model, and how it is helping its clients transform.
Insurance Innovation Reporter: Tell us a little about where Sapiens is today, financially and strategically. How would you characterize the company’s mission today, and how it is prepared to achieve its objectives?
Roni Al Dor, CEO and President, Sapiens International: Sapiens today is in a strong position, both financially and strategically perhaps despite the current global pandemic. We have consistently been committed to strengthening our market position and our propositions to the insurance market. From a financial and growth perspective, we continue to see long-lasting continuous growth which reflects the industry’s adoption of our solutions.
Our strategy consists of four main pillars:
- Continue providing best-of-class insurance software products to the market through innovative and committed product development
- Leverage our existing global footprint across North America, Europe and Asia-PAC and continue to increase our market share in those territories and expand to additional ones
- Continue our successful track record of mergers and acquisitions, focusing on acquiring innovative solutions, technologies and knowledge that provide additional values to our proposition and our customer base
- A one-stop-shop approach, where we provide a comprehensive set of innovative solutions, professional services and cloud services to our customers, thus operating as a trusted advisor that can fulfill the various technology needs of our customers across the board
More recently, the acquisition of sum.cumo, a leading provider of digital-first solutions for the insurance industry in the DACH region, enhanced our digital capabilities and strengthened our proposition of digital solutions. The immense value in maintaining a diverse global operation through acquisitions will continue to be a vital part of our business strategy.
At the heart of our mission is a customer-centric organization that focuses on serving our customers through our wide set of products, solutions and services. We have a strong professional services arm with deep knowledge in delivering our own products. Having said that, we are also proud our partnership with several leading system integrators, collaborating with them in cases where it provides added value to our customers.
IIR: How do you read the insurance systems market today, particularly how the COVID-19 pandemic may have shaped how insurers think about digital transformation?
RAD: COVID-19 has very much convinced insurance carriers to re-evaluate their current footing and path of digital transformation. Insurers have had to look at areas where they may not have wanted to invest and innovate quite yet and pivot direction, simply because they have had no choice—“forced innovation,” you might say. In the wake of COVID-19 we’ve seen carriers shift their focus towards process improvement and simplification, better customer experience tools and providing access to self-service for customers when the ability to meet face-to-face was suddenly removed.
And we see this not only in P&C, but with Life/Annuities/Pensions as well. COVID-19 really has been a defining moment for the space. Shifting entire work teams to remote operations was successful for most, after some changes and adjustments, but it has been eye opening in terms of gaps. We see, as a result, carriers becoming laser-focused on bridging that digital gap and looking for digital platforms and ecosystems to help take that leap.
IIR: Insurance core systems have been moving steadily toward the cloud-based, API-enabled platform paradigm. Where is Sapiens today in that journey, with regard to both P&C and life/annuities/pensions systems?
RAD: The shift towards cloud and digital has been a longer road for insurance. But in the last few years, we’ve seen the change manifest itself. The industry has come to understand the benefits to be gained by moving to the cloud, not only from a cost perspective, but also around improved/faster innovation. Such understanding has rapidly accelerated with the COVID-19 situation.
At Sapiens, we saw the need to solve for this with our Digital Platform—a full, end-to-end cloud-native insurance platform that includes core, data and digital engagement platforms.
A key factor is our focus on simplification of the orchestration and API management through our digital API layer and API Composition Engine. This tool truly empowers insurers to take control of their digital transformation by full enablement of integration with the latest innovation and InsurTechs—simply and easily, enabling carriers to benefit from low-code and configurable capabilities and achieve self-sufficiency and rapid time-to-value.
We see such needs as quite common across both P&C and Life business, and our operation across both domains allows us to take a holistic view across the industry and leverage capabilities, ideas and solutions from various domains to produce a powerful consolidated approach.
IIR: Just how cloud-native are Sapiens’ offerings today, and what are your plans for being a purely cloud-native, software-as-a-service provider?
RAD: Being cloud-native is a cornerstone in our product proposition. Through our fully cloud-native insurance digital platform proposition, we enable our customers to benefit from rapid and flexible deployment capabilities, automated DevOps, operational efficiency, and critically benefit from a very rapid and simple upgrade process, that enables us to provide on-going releases throughout the year and allows our customers to benefit from a rapid, frictionless and low effort upgrade process. Accompanied with our strong managed services proposition, we provide a complete cloud-native service to our customers, enabling them to focus on their business objectives where we are handling the entire operation of the software in the cloud for them, as a service.
IIR: How do you envision the insurance platform as a nexus for multiple services within an ecosystem of partner providers? What activities has Sapiens been engaged in to develop an ecosystem of partner and capabilities?
RAD: The success of insurers to transform, become digital and enhance the customer experience to both consumers and brokers/agents require today is paramount. This can only be achieved through the ability to simplify the complexity of API orchestration and management and take advantage of the innovation and emerging technologies available today.
Sapiens has strategically worked over the last few years to develop a partner ecosystem where we’ve focused on providing our insurers with partners that provide real value along the insurance value chain. We’ve carefully selected each partner and pre-integrated with them to offer carriers a readily available solution. We are proud of how we’ve developed our partnerships. Helping our customers to navigate the complexity, to automate, is first and foremost in our mindset.
IIR: How ready are insurers for the platform paradigm, and how are you persuading them to adopt core systems in the cloud?
RAD: COVID-19 has proven to the industry that the time is now. Never has there been a such a perfect storm, where insurers saw the necessity for digitalization and had the power of the cloud to help elevate them. The economies of scale are only the tipping point, the flexibility the cloud offers—so imperative with COVID-19—the improved efficiencies and scalability the cloud offers allow for faster upgrades than ever, allowing insurers to take advantage of the latest and greatest in innovation. As well as the collaboration the cloud offers sharing updates, increasing productivity. We haven’t even talked about security or disaster recovery. The benefits are enormous.
IIR: What kind of success has Sapiens had in bringing new customers into the cloud? What about existing customers—what about on-prem customers does Sapiens has through its various acquisitions?
RAD: We’ve been very successful with both new customer acquisition and with transitioning existing customers to the cloud and to our Managed Services solution. The market in general, has seen the advantages and benefits of making the move. Covid-19 has accelerated this decision by a number of our customers. We see this as part of a digital transformation for our customers and we are invested in helping them make that transition. Naturally, we have many long-standing customers who still have on-prem implementations from past acquisitions or engagements, and the cloud transformation is something that we definitely propose to work with them on how to take it forward.
IIR: Will Sapiens’ development investments be focused on the cloud? If so, will that leave on-premise customers at a disadvantage with regard to functional improvements?
RAD: We see the cloud as the natural progress of insurance software; hence it is a strategic domain for our solutions and our roadmap investments. Having said that, we are devoted to our customers and have a strong commitment to maintain the value they get from us irrespective of whether they are on-prem or in the cloud. We wish to ensure they are both benefiting from new functional capabilities that we constantly develop and deliver. We also provide various options for such customers to take advantage of new developments by leveraging our componentized solution approach, for example, taking gradual steps in adopting new capabilities like our API layer or dynamic portals without having to make a full big-bang cloud transition, and thus incrementally progressing towards a digital transformation while still benefiting from our roadmap and releases
Or, in the words of a recent Celent report: “This year’s customer feedback reflects Sapiens’ growth from new digital offering to an established vendor…dealing with the difficult challenges of not leaving customers behind while growing the product set…” (Celent, Xcelent Awards, Jun-2019)
IIR: How does Sapiens see itself as a transformation partner, particularly with regard to the cultural and process changes needed to take full advantage of newer technology?
RAD: We believe one of the reasons that an insurer selects Sapiens, is because of our level of partnership in helping them down the path of digital transformation, which has been very successful for us at a global level. Our entire philosophy is predicated on walking the path with our customers. We aren’t just about software delivery. We are heavily invested in the success of our insurers to achieve their digital goals. We pride ourselves on our understanding of the industry and market as well as our one-stop-shop approach required to bring a holistic solution to our customers in order to support the digital journey they are undertaking. We also believe at Sapiens that we have the expertise and delivery methodology to support our insurers through an implementation. One hand to shake. But as mentioned, we have great partnerships with leading system integrators, and we are joining forces in the areas where it is the right way to work, and we’ve had many a success there. We are the partner that has the knowledge, the credentials and the tools and technology to help take our carriers to the future. That won’t change. We are here today for our insurers and for what is to come.