The Economics of IT Modernization for Small and Mid-Size Insurers 

Why Owning Your Core Technology Can Drive Better Financial Outcomes 

For small and mid-size P&C insurers, every investment must deliver meaningful value—and technology is no exception. As core systems become outdated and vendor lock-in continues to drain resources, many insurers are reevaluating the true cost of traditional vendor-managed solutions. 

The good news? A modern, customer-managed core system can help level the playing field—delivering enterprise-grade capabilities, long-term cost savings, and greater control over your technology roadmap. The financial case for modernization has never been stronger. 

The True Cost of Traditional Vendor-Managed Systems 

Legacy systems and vendor-controlled platforms often appear affordable at first glance. But over time, the hidden costs add up: 

• High licensing and maintenance fees with little flexibility 
• Long wait-times (and high costs) for configuration or changes 
• Limited customization without expensive developer work 
• Ongoing reliance on vendor roadmaps—not your business needs 

For smaller insurers, this means spending more just to keep up—without ever truly gaining a competitive edge. 

Modernization Through a Customer-Managed Solution 

Customer-managed core systems turn the traditional model on its head. Instead of renting a black-box platform from a vendor, you license the underlying technology yourself—giving you full ownership and control over the system. 

Breaking Down the Financial Benefits 

1. Lower Total Cost of Ownership (TCO) 
With customer-managed platforms, you’re no longer paying recurring fees for vendor-hosted environments, change requests, or basic system updates. Instead: 

• License and host the platform on your own Microsoft environment  
• Control your own maintenance schedules and system evolution  
• Eliminate long-term vendor dependency fees 

Result: Lower costs over time, with more predictable IT spend. 

2. Faster Time to Value 
With a modern, low-code core system, you can make changes in-house without waiting (or paying) for vendor development cycles. 

• Launch new products faster  
• Configure workflows, rating engines, or forms in days  
• Respond to compliance updates instantly 

Speed = savings. The faster you adapt; the sooner you realize revenue. 

3. Greater Operational Efficiency 
Customer-managed systems let you streamline processes and automate tasks that previously required manual intervention or vendor support: 

• Self-serve data access and real-time analytics  
• Built-in workflow automation  
• Custom portals for agents, customers, and adjusters 

This drives down administrative costs and improves staff productivity. 

4. Scalable Growth Without Scaling Costs 
Vendor systems often charge more as you grow—adding users, expanding to new states, or introducing new products. Customer-managed solutions, especially those built on cloud-native platforms like Microsoft Azure, let you: 

• Scale infrastructure on demand  
• Avoid per-user or per-feature pricing traps  
• Grow without re-architecting your core 

You pay for what you use—not what the vendor decides to charge. 

5. Full Data Ownership = Smarter Decisions 
When you manage your own system, you own your data—full stop. That means: 

• No additional fees for data access  
• Easy integration with analytics tools  
• Real-time reporting for faster insights 

You unlock the ability to make data-driven decisions without financial friction. 

Why This Matters for Smaller Insurers 
Big carriers have the resources to maintain legacy systems or build custom solutions. Smaller insurers need smarter, more efficient, and less costly ways to modernize—without compromising capability. 

• Customer-managed, low-code platforms offer the best of both worlds: 
  Enterprise-grade tools  
• Predictable, lower costs  
• Freedom to innovate independently 

The Bottom Line: Modernization is a Financial Strategy 

This isn’t just about technology—it’s about making smarter financial choices that position your organization for long-term success. By investing in a customer-managed core system, small and mid-size insurers can: 

• Control costs  
• Improve agility Increase profitability  
• Eliminate vendor bottlenecks 

Take Control of Your Technology—and Your Budget 

SpearSuite™, built on Microsoft Power Platform, is a modern, customer-managed solution designed to make this shift easy, affordable, and strategic. 

SpearSuite™ empowers insurers with a modern, low-code core platform that’s customer-managed, cloud-native, and built to scale. Built on the Microsoft Power Platform, Spear’s core software solutions are designed to enable insurers to have full control of their environment with added speed and increased ROI, while still offering expert support when needed. 

Ready to rethink the economics of your core systems?  Schedule a Demo to explore how low-code SpearSuite™ can help your business modernize with confidence—and control. 

 To discover how Spear’s solutions for core system modernization can help insurers of all sizes compete with the Titans without a titan budget, Request Pricing.