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Insurtech – Buy or Build?

Colin Robertson
Colin Robertson

Founding Partner

Budding Insurtech firms are confronted with a critical decision early on—how much of their pricing software should they build in-house, and how much should they leverage pre-existing software? This decision is not merely financial; it profoundly shapes the firm’s growth trajectory, making it imperative for Insurtechs to carefully weigh the options rather than hastily deciding.


Several universal factors should be considered when making this decision. The expertise of the people involved, particularly experienced pricing professionals, is crucial. Understanding software vendors, their strengths, and pitfalls is essential. Data capabilities, pricing sophistication, scalability, and costs are also key considerations.


The build or buy decision comes down to a trade-off. Buying offers simplicity, quicker time to market, and predictable costs. However, it sacrifices customization and flexibility, relying on external developers. Building provides agility, control over code and IP, and potential long-term advantages but demands a skilled team, entails security and regulatory responsibilities, and is resource-intensive.


Pricing sophistication, data utilization, scalability, and cost-effectiveness are vital factors. Whether to buy or build depends on a firm’s priorities, but careful consideration of all elements is crucial. Advisors and experts in the insurance sector can assist Insurtechs in navigating this decision, guiding them toward the right pricing software strategy based on their specific needs and accelerating their progress on the pricing sophistication curve.


Ultimately, whether to buy, build, or adopt a combination approach, the decision-making process requires a comprehensive evaluation of all aspects to pave the way for the Insurtech’s successful journey.