Innovation Without the Pain – How Guidewire Cloud Is Reaching Tipping Point

We live in a constantly evolving world of technology, where software providers are perpetually improving and updating their solutions. This can be time-consuming if software is self-managed, with maintenance and technical upgrades taking time and effort. This is often so onerous that it can delay or even stop upgrades, with insurers missing out on competitive new features. And that’s before we factor in the support limitations posed by self-managed software. The new breed of cloud-managed software breaks this cycle and delivers a seamless continuous experience, with no onus on the customer, just a gateway to innovation without the pain.

In this blog, we’ll walk through our experience with Guidewire Cloud™ and why we have forged such a long relationship with this innovative provider.

Every insurer is trying to do three essential things:

• Engage
• Innovate
• Grow efficiently

Self-managed software is holding insurers back from effective delivery as it requires significant investment in terms of resources from internal IT teams, with a lot of energy spent on maintenance and technical upgrades. Indeed, self-managed enterprise software is often so complex and expensive to upgrade that it often results in insurers resisting upgrades for four or five years at a time. This means that insurers risk falling behind on important security and fix updates and have a low rate of new feature adoption, missing out on new ways to save costs and to be, or even stay, competitive.

There’s also an opportunity cost here, as with the cost of maintenance and upgrades, that inevitably results in fewer resources left for innovation and other IT services.

Choosing a better model

Self-managed environments have a heavy reliance on internal IT to manage them and deploy them to production. This is often an extremely heavyweight process that can result in production systems being down for several days, resulting in a very slow deployment cycle compared to the speed of cloud delivery, which takes minutes or hours. Additionally, self-managed changes can potentially cause breaks, making it a fragile and risk-filled process.

Increasing costs of system upgrades

As time passes, upgrade costs inevitably increase. And if providers have committed to an aggressive release cadence for their versions, self-managed insurers can fall behind versions of the platform. Yet, committing to an aggressive release cadence shouldn’t be seen as negative, as it means the provider is effectively investing in development. Point in case, Guidewire have committed to an aggressive cadence for their cloud versions, with a new major release every four months. So, for every extra year an insurer stays self-managed, they can fall behind an additional three versions of the platform. And, as the platform evolves by another three versions, the gap between self-hosted and cloud widens, potentially meaning even more effort, time and expense to upgrade.

Looming sunsetting

Then there is the issue of looming support limitations. Although Guidewire has committed to supporting InsuranceSuite v10 in the immediate short term, standard support will eventually be phased out. This could result in customers becoming unsupported or forced into expensive extraordinary support arrangements.

Meanwhile, the supporting tools and technologies, such as Oracle RDBMS, Microsoft SQL Server and Java platforms, also impact software when they reach their support end-of-life. Each version of InsuranceSuite requires specific versions and faces a material impact.

Insurance innovation - addressing insurers’ top opportunities

Engage

Guidewire Cloud’s Jutro Digital Platform, enables the creation of rich and compelling digital experiences for insurance customers throughout the insurance life cycle, including account management, billing, quote and buy, policy management, First Notification Of Loss (FNOL) and claims management.

Automation features like Straight Through Processing (STP) and AutoPilot (that automates business processes across the P&C insurance life cycle) simplify claims processing, provide a more satisfying customer experience and reduce operational costs.

Innovate

With Advanced Product Designer (APD), insurers can rapidly launch new products without expensive production code deployments. Insurers can then quickly react to evolving markets and launch innovative products in days and weeks, rather than months and years.

With a modern and constantly evolving API and the Integration Gateway, Guidewire Cloud™ integrates seamlessly with the entire insurance ecosystem.

Grow efficiently

A unique hybrid tenancy architecture deploys individual customer configurations in a single-tenant model, backed by core Guidewire Cloud™ services deployed in a multi-tenant model.

This means that the core cloud platform can be upgraded directly by Guidewire, rather than the customer having to engage in a lengthy and expensive upgrade programme. Once a customer has tested their own configuration, they can choose to update to the latest cloud version. Blue/Green deployments allow customers to transition to an update release with zero production downtime.

The result is a much easier and simplified upgrade, with much of the effort performed by Guidewire rather than the insurer. To back this, if a customer has enough test coverage, then Guidewire will automatically upgrade customers. No effort is required on the customer’s part (other than user acceptance). For this service, Guidewire requires that customers take at least one major release per year, allowing insurers to remain within the N-2 target, which means two releases away from the latest release.

As Guidewire continually updates its core cloud platform services three times a year, new features are automatically deployed, making them instantly available to cloud customers. Features are deployed behind ‘feature switches’ – they are turned off by default and can be easily activated by customers in their own environments.

Leveraging analytics

Guidewire Cloud™ provides a rich analytics platform as part of its core system, which can contribute to an enterprise-wide data strategy. It helps insurers to accelerate, adapt and innovate with far more speed and flexibility in response to market changes or new advances.

Fast-evolving digital insurance

In a world where goods can be ordered on Amazon and arrive the next day, an Uber can be ordered and tracked on a phone, or food can be ordered and delivered to your doorstep with the tap of a button, customers expect similar services and experiences in all aspects of their lives.

Guidewire Cloud™ is designed to enable insurers to provide this level of service and experience.

Direct path to the cloud

Regardless of the version you use, you can move directly to Guidewire Cloud™. In the past, the only path was linear upgrades, this is no longer the case.

Now, all v8, v9 and v10 self-hosted customers have a direct path to Guidewire Cloud™.

Take the next step

Insurers have a reputation for being naturally risk-averse, and adoption of Guidewire Cloud™ was initially slow. However, as of the start of 2024, Guidewire has 110+ InsuranceSuite customers on Guidewire Cloud™, with almost 50% added in the last two years alone.

The initial release of Guidewire Cloud™ had strong technical benefits, but since the Elysian release, customers are starting to see many more business benefits that contribute to growth and profitability, including:

• Product agility – accelerating the time to launch new products, enter new markets and manage and optimise existing products
• Market expansion – enhancing distribution channel effectiveness, with better broker and agent experiences
• Price risk optimisation – improving the accuracy of pricing and risk selection
• Digital transformation – strengthening customer relationships through better experiences that enable more intuitive and self-service interactions
• Claims efficiency – reducing operating costs and improving customer satisfaction through streamlined processes and workforce productivity
• Business innovation – providing on-demand scalability and flexibility, seamless integration and interoperability and agile development capability

The future for Guidewire is the cloud and Guidewire Cloud™ has already matured significantly. For Guidewire customers who have been waiting for a tipping point where momentum clearly shifts towards cloud, we believe we have now reached that point.

Need some help understanding your unique situation? Reach out to the insurance team today.