Proofs of concept (POCs) are meant to help enterprises test their ideas and projects in real-world conditions. Such experimentation and innovation have brought incredible insurance products to life, but the term “POC” doesn’t always have the best connotation in the insurance world. Conducting a POC has historically been a time-consuming and costly process with little return on investment. The insurance IT world is littered with failed POCs that began with great intentions but ended as PowerPoint presentations and some half-finished code.
So how can insurers make sure their POCs are as beneficial as possible?
Through our work with some of the world’s largest insurers, we’ve developed five key criteria for delivering valuable POCs.
#1: POCs must be functional
A POC should actually build something that does something. To justify an investment in a new core system, insurers must be convinced that the software does what it’s designed to do. POCs that culminate in a presentation or report are not enough. Producing something functional should be a simple and easy task—if it’s not, consider a different vendor—and will go a long way toward making the POC actually worthwhile.
#2: POCs must be relevant and impressive
When conducting a POC with an insurtech vendor, insurers must verify that the underlying technology is flexible enough to support the desired product or process. However, many POCs are merely carbon copies of something the vendor has done for another customer. While that project may have been valuable for that specific customer, it may not be relevant or even interesting to the insurer being pitched.
Valuable POCs identify and address at least one big pain point for the insurer. Doing so shows that the vendor’s technology is flexible enough to meet whatever challenges the insurer may be facing.
#3: POCs must be deployable
By definition, a “proof of concept” means that something can be proven possible. However, a valuable POC proves that something is possible and that it has a direct path to going live and creating real business value.
For example, a POC that prototypes something in a rapid-development framework isn’t very valuable to an insurer. The prototype isn’t substantial enough to go live as is, so the insurer would need to rebuild a more robust version from scratch. Because of the time and effort involved on the insurer’s part, the probability of that prototype actually going live is low.
In contrast, a valuable POC can be expanded and quickly deployed as a live product. The path from zero to live is a series of incremental improvements where the final product becomes more and more visible and attainable. Insurers don’t need to waste time in a “go backward to go forward” situation.
#4: POCs must be fast, cheap, and efficient
If an insurer is spending $2 million and six months on a POC and the project doesn’t go live, something isn’t right. A good POC creates something that can clearly be successful within a discretionary budget and in less than a month. Enabling remote execution is another big advantage, making it convenient to collaborate on the POC anytime, anywhere. Keeping POCs small and agile means insurers can conduct many of them quickly and inexpensively and double down on successful experiments.
#5: POCs must deliver results that ensure executive sponsorship
To get the most out of a POC, insurers should be ready to market the results to stakeholders or executive sponsors who can help create conditions for success, garner internal support, and overcome objections. A POC’s business value should be immediately evident and indisputable to prove it’s worth an investment.
Many insurers are ready to commit tens of millions of dollars to a new core system without doing a single functional POC on the underlying technology. It’s not that they like betting on technologies they’ve never tried; they simply don’t know that you can conduct a meaningful core system POC in under a month. That just isn’t possible with legacy technologies. But it is possible with modern core technology, and Socotra customers do it all the time. To derive real value from a POC and test the limits of a new system, insurers must insist on seeing something functional, relevant, and deployable and should distrust any vendor that doesn’t provide a clear and easy path for doing so.
Socotra’s cloud-native platform, open APIs, and public documentation make the creation of valuable POCs easy. We offer insurers several low-risk, low-investment options, including:
- A 30-day free trial of our platform—providing plenty of time to build something functional and deployable. Start your trial now.
- A two-week virtual POC in which our team works closely with insurers to prove or de-risk a critical business objective. Complete this form to learn more about Socotra’s Virtual Proof of Concept Program.
- A development license that insurers can use to empirically prove platform capability by exploring scope and de-risking a project. Request a demo today.
