Beyond Build vs Buy: The Third Option for Insurance Administration Systems.
By Thomas Kieck, Business Development Director at Tial Technologies
Why Most Insurance Operations Benefit from Platform-tailoring
For years, technology decisions in insurance have been presented as a choice between two extremes.
You either buy an off-the-shelf system and adapt your business around it, or you build a custom solution designed specifically for your operation.
On paper, those seem like clear alternatives.
In practice, most short-term insurance businesses do not fit neatly either.
It’s a conversation I regularly have with brokers, insurers, underwriting managers and distribution businesses. The assumption is often that they’re choosing between flexibility and stability, between control and cost, between speed and differentiation.
What usually emerges after a few conversations is that they’re actually looking for something in the middle.
Not because they’re indecisive.
Because that’s where the realities of modern insurance operations sit.
The Problem With the Two Visible Options
Off-the-shelf software has obvious advantages.
It’s proven, implemented across multiple businesses, supported by a vendor, and typically faster to deploy than a ground-up build.
The challenge is that every insurance business develops its own operational DNA over time. Products evolve. Distribution models change. Compliance requirements expand. Specialist niches emerge. Reporting requirements differ. Customer journeys become more specific.
Eventually, the organisation starts hitting the edges of the software.
The business is then faced with a difficult question: should we change how we operate to match the system, or should the system adapt to us?
At the other end of the spectrum sits custom development. The attraction is equally obvious. You get exactly what you want, designed precisely around your processes, products, and workflows. But the reality of custom development is often less straightforward.
Building software is one challenge.
Maintaining it for years is another.
Every enhancement, integration, compliance change, security requirement, and operational improvement becomes your responsibility. The expertise required isn’t just technical. It’s ongoing. It requires investment, governance, and internal capability that many insurance businesses were never structured to carry.
Most brokers and insurers are not software companies.
Nor should they have to become one.
The Option That Gets Ignored
What I find interesting is that the market often talks about these two approaches as though nothing exists between them. Yet most successful operations occupy this middle ground.
I call it platform tailoring.
A platform provides the core architecture, stability, compliance foundation, integration architecture, and operational framework. The business then shapes and configures that platform around how it needs to operate.
Rules can be adjusted
Workflows can be designed
Products can be structured differently
Integrations can be added
Processes can be refined
And where genuine business differentiation exists, carefully targeted custom development can be introduced without rebuilding an entire ecosystem from scratch.
The distinction matters.
Tailoring should solve for operational fit. Custom development should solve for genuine competitive advantage. Unfortunately, those two things are often treated as the same problem.
Knowing Where the Line Sits
One of the most useful questions technology buyers can ask is this:
“What actually makes our business different?”
Not what makes it busy.
Not what makes it complex.
What genuinely creates value for customers and differentiates the organisation in the market?
Most workflows, policy administration processes, claims journeys, financial controls, reporting structures and operational requirements are not unique.
They’re important.
But they’re not unique.
Trying to custom-build every component of an insurance operation often results in high cost, complexity and technical debt without creating meaningful competitive advantage.
The areas that deserve custom attention are usually much smaller than organisations initially think.
- A specialised underwriting process
- A unique distribution mechanism
- An innovative digital customer experience
- A proprietary rating approach
- A distinct integration layer
Those are areas where investment can create differentiation.
Everything else should ideally sit on a strong, adaptable platform foundation.
Why COFI Makes This Discussion More Important
The timing of this conversation matters.
South Africa’s Conduct of Financial Institutions (COFI) framework continues to reinforce a principle the industry has been moving towards for years: customer outcomes matter.
Demonstrating fair treatment, operational consistency, governance, oversight, transparency, audibility, and accountability is becoming increasingly important across the insurance value chain.
That creates pressure.
But it also creates opportunity.
Technology decisions are no longer purely operational decisions.
They are conduct decisions.
They influence how consistently customers are serviced, how risks are managed, how processes are governed, and how quickly organisations can respond to regulatory change.
Businesses operating on rigid systems often struggle to adapt.
Businesses carrying excessive custom-development complexity can find every compliance adjustment expensive and time-consuming.
The organisations that are well positioned tend to be those with enough flexibility to evolve their processes, while still operating on a stable platform foundation.
In many ways, COFI reinforces the need for balance.
Not rigidity.
Not endless customisation.
Balance.
What This Means for the Next Few Years
I believe the industry will increasingly move away from binary technology discussions. The old build-versus-buy debate made sense when technology ecosystems were less mature. Today, the more relevant question is how much of your operation you can shape without taking on engineering risk you can’t sustainably carry.
That’s a very different conversation.
It moves buyers away from comparing feature lists and towards evaluating adaptability.
It changes procurement discussions from “Can the system do this?” to “How easily can the business evolve when change inevitably arrives?”
Because change will arrive.
- New products
- New regulations
- New distribution models
- New customer expectations
- New data sources
The ability to adapt without rebuilding becomes increasingly valuable every year.
A More Honest Conversation
Perhaps the industry needs a more honest discussion about where most organisations truly stand. Few businesses can thrive by forcing themselves entirely into off-the-shelf processes. Few businesses benefit from building everything themselves.
Most sit somewhere in between.
They need stable platforms.
They need flexibility.
They need sensible levels of tailoring.
And occasionally, they need targeted custom development where it genuinely creates business value.
That isn’t a compromise.
It’s often the most practical, sustainable, and strategically sound approach available.
The future of insurance technology may not be about choosing between build and buy.
It may be about understanding which parts of your business should be neither.