Insurance infrastructure is not your differentiator

No one walks into a store for the shelves.

They come for the products. 

The shelves are essential, of course - they hold the goods, keep things in order, and make it possible for customers to browse and buy. But shelves don’t define the success of the store.

The same is true in insurance.

Insurance infrastructure is invisible, but critical

Behind every insurance product is an infrastructure layer: systems that handle product design, underwriting and pricing, distribution, policy management, claims and more. 

Customers don’t buy insurance based on this infrastructure alone; they are however influenced by the availability of products and the experience of dealing with an insurer. Reliable infrastructure, like the shelves in a modern world, is no longer a differentiator but instead a necessity; a foundational element of being a provider of insurance services. 

Without it, nothing works.

In many industries, the infrastructure layer has already become invisible. Digital-first businesses don’t build payment systems from scratch - they use Stripe. They don’t reinvent communications - they use Twilio. Leveraging the cloud means using Amazon Web Services, Azure or Google Cloud, not building your own data centres.  

Insurance has headed the same way. 

The infrastructure layer is moving into the background, freeing leaders to focus on what really matters: innovative products, compelling customer experiences and smart distribution strategies.

However, the decision to invest in insurance infrastructure and switch insurance platforms is risky and complex because choosing the wrong foundation upon which to build can lock a business into years of limitations and scupper any growth plans. 

Choosing the right one opens the path to continuous innovation.

Build vs. buy: where to differentiate

The critical question for insurance businesses is this: what do we build, and what do we buy?

Whenever we receive this question, the answer is: it depends on where your differentiation lies.

Infrastructure is not differentiation for insurers, MGAs and brokers. 

Data hosting, policy administration, claims workflows, compliance reporting - these are essential domains in insurance, but they are shelves, not products. They don’t make customers choose to buy insurance. 

They don’t set an insurance business’ brand apart. They need to be strong, resilient, flexible and scalable, but they don’t need to be proprietary.

However, products and experiences are differentiation. 

How you design cover, price risk, distribute policies, and craft experiences - that’s where insurers, MGAs and brokers will deliver value. That’s what customers remember. That’s where innovation pays off.

Building infrastructure in-house often feels attractive because it promises control. But the trade-off is speed, cost, and flexibility. Every year spent building a custom platform is a year competitors spend testing new products and reaching new customers. Worse still, by the time it’s finished, the infrastructure market will have moved on.

The better lens is this: spend time and effort on what differentiates, and buy what enables.

Masters of scale

Another lesson from digital industries is that scale changes everything.

Building core infrastructure in-house might appear cheaper in the short term, but for most businesses it quickly becomes more expensive as they lack the scale to justify the unit costs, all while hampering their ability to execute on new emerging market opportunities. 

By contrast, infrastructure services that already operate at scale across multiple clients can deliver higher resilience, better performance, and lower unit costs across the board. 

This isn’t merely a case for efficiency.

It’s about unlocking the ability to innovate quickly without being weighed down by technical debt. A great rule of thumb is to apply a 20% annual cost of maintenance to your internal systems. 

The future of insurance is built on strong shelves

In the end, no one wins customers with their “shelves.” They win with the products, the experiences, and the trust they deliver. But without shelves, the store doesn’t exist.

For insurance leaders, the challenge is clear: treat infrastructure as the invisible enabler it should be. Don’t over-invest in what customers will never see.

Instead, ensure your foundation is strong, scalable, and built with the future in mind.

Because when the shelves are solid, you’re free and nimble to focus on the products that truly set you apart.