Insurance Core Systems: Buy or Build?


April 2019 – Custom building core systems remains uncommon, though instances have increased over the last few years as several carriers embarked on multi-year efforts to build policy, billing, or claims systems. Many others have given serious consideration to build as a viable alternative to implementing a vended solution but have opted to buy.

This brief addresses arguments for and against core custom builds—some of which are legitimate and others of which don’t withstand serious scrutiny. It also outlines the key capabilities IT organizations need to deliver successful custom builds as well as how to evaluate these as part of a maturity assessment. The brief also reviews some risk mitigation approaches like leveraged builds and co-development.

This brief primarily focuses on core systems, though the same concepts apply to any complex custom development effort.

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