5 signals it’s time to revisit your build vs. buy decision

The “build vs. buy” decision is not made once. It is made continuously.

Most insurance businesses don’t get the framing wrong - they get the timing wrong. They make a sound capital decision early, usually to build, and then leave that decision in place long after the business has changed shape around it.

A useful way to think about this is as a spectrum rather than a binary - in other words, it’s not build vs. buy but build and buy.

At one end, capital is fully allocated to building and maintaining technology in-house. At the other, it's allocated entirely to a third-party platform, with internal teams focused on differentiation. Most insurance businesses sit somewhere in between. 

Where you sit today doesn't have to be where you sit tomorrow. The right question isn't which side to pick. It's when to rethink your position.

Why timing is the part most insurance businesses get wrong

There is a body of evidence that explains why this decision is so often made too late. McKinsey has consistently reported that around 70% of transformations fail to deliver their expected value, listing causes like low aspirations, weak engagement and underinvestment in the capabilities needed to sustain change. 

The pattern repeats across industries, but what is less discussed is how often the failure traces back not to the decision itself, but to the years that passed before it was made.

Insurance is a particularly clear case. Celent’s research on North American life insurers found that maintaining current systems makes up more than half of IT budgets. That is capital allocated to keeping infrastructure alive rather than building anything new, and that expenditure compounds, quarter after quarter, while leadership debates whether to act.

The cost of staying in the wrong position is rarely calculated but the cost of changing it is always visible. That asymmetry goes a long way to explaining tech inertia in the insurance industry and why most businesses don’t move early.

These are the signals that tell you the moment to rethink has arrived. 

The 5 signals

1. Engineering capacity has become a constraint on growth

The clearest signal is also the most uncomfortable. Your roadmap is no longer set by what your business needs, but by what your engineering team has capacity to deliver.

New product lines wait in a queue. Distribution integrations take quarters, not weeks. Regulatory changes consume engineering cycles that should be funding growth. 

Once a meaningful share of your engineering payroll is absorbed by maintenance, the system has stopped enabling the business and started defining its limits.

If your CTO or technology leadership regularly explains what the team can’t get to this quarter, that is the signal.

2. Distribution partners are moving faster than you can integrate

Insurance distribution is unbundling. Retailers, banks and affinity brands are looking to offer protection at the point of need, and they want partners who can move at their speed.

As BCG puts it: “While traditional insurance products can take months or even years to launch, embedded offerings must go live rapidly to stay competitive in today’s fast-moving digital markets.” 

The implication is actually more urgent than it sounds. If your standard integration timeline runs into multiple quarters, you are losing partners you’ll never see. They may not tell you they walked away - they simply choose someone faster.

The businesses winning embedded distribution today are the ones that can be live in weeks. Not because their engineers are better, but because their underlying policy administration infrastructure layer is built for it.

3. Change has become a cost of doing business

Healthy insurance technology should make change cheap. Every product launch, every distribution adjustment, every regulatory update should be a configuration task, not an engineering project.

When small product changes require release cycles, when adding a cover type takes multiple sprints, when regulatory updates compete with roadmap items for engineering time, the system has stopped enabling change. It is resisting it.

That resistance has a price. It shows up as slower product cycles, longer go-to-market timelines, and a growing gap between what the business wants to do and what the system allows.

4. Competitors are launching products faster than you

Speed-to-market is one of the most measurable competitive advantages in insurance. And it is one of the easiest to lose when your infrastructure is the bottleneck.

If competitors are launching new lines, new bundles or new pricing models faster than you can respond, the gap widens. Every quarter your team spends on infrastructure is a quarter their team spends on differentiation.

A delay that runs for several product cycles is not a delay. It is a market position.

5. Finance is asking questions tech can’t answer

Eventually, the conversation moves out of the engineering team and into the boardroom. The questions get sharper.

What is our return on engineering investment? Why is the run-rate of platform spend growing faster than top-line revenue? What part of this stack is differentiation, and what part is plumbing?

These are good questions, but they are also questions an internal build can rarely answer cleanly. When the finance team starts asking them, leadership is no longer dealing with a technology decision. It is dealing with a strategic capital allocation decision.

The signal isn't buy everything. It’s reallocate.

If two or more of these signals are showing up in your business, the answer isn’t necessarily to throw out everything you’ve built. It’s to draw a sharper line between what should be built and what should be bought.

Buy the infrastructure. Build the differentiation.

Your real competitive edge as an insurer, MGA or intermediary doesn’t live in your policy administration system. It exists in your underwriting, your distribution, your customer experience. Those are the things worth your engineering capital. Everything underneath them is simply infrastructure. Necessary, but not what makes you distinct.

Reallocating capital to a proven insurance technology platform isn't a retreat from technology as your differentiator. It's a reframing of it. The team doesn’t disappear, but moves to the work that actually moves the needle.

The decision is already on the table

The build and buy question isn’t whether you should pick a side. It’s whether you can answer, today, where you sit on the spectrum and whether that position is still earning its keep.

If the signals above are familiar, the decision is already on the table. The only choice left is whether to make it deliberately, or wait until it makes itself.

Our Build and Buy guide sets out the full capital allocation framework, including how to model the cost of your current position, how to make the case to your board, and what a deliberate move on the spectrum looks like in practice.