The events of the past year prove SaaS is the right tech for right now

By Scott Ericson, Chief Operating Officer, Clearwater Analytics

Insurance Investor promotional contentposted on Monday, April 12, 2021

This article was produced by Clearwater Analytics as part of their valued Industry Partnership to Insurance Investor.

Over the past year, technology providers heard from people in the insurance industry who were concerned about their systems keeping up with a rapid change of pace. We at Clearwater heard questions like: Is service affected? Can we operate effectively? Does the website and the data behind it work the same for people working from home?

For us, the answer to each of these questions is, ‘yes’. And the reason, put simply, is Software-as-a-Service (SaaS).

The kind of technology you use matters, and never has this been more true. While vaccines have brought hope in this time of uncertainty, we are still living in a changed world. Here are some of the big questions business and operations leaders are asking, and what SaaS means for their answers:

  1. Will my systems continue to work?
  2. Can my systems scale on-demand and under stress?
  3. What is my key-person risk?
  4. Does the quality of my data exceed industry standards?
  5. What about my budget?


Will my systems continue to work?

If a system is truly cloud-based, users access the system via a web browser, regardless of whether they are at their desks, at home, or anywhere else (or if they’re using a desktop machine, laptop, or mobile device).

A true SaaS system does not install software at clients’ facilities, or build single instances and store them. Robust infrastructure delivers the computing power and storage for all users. And that super-robust infrastructure is replicated, safeguarded, and duplicated multiple times, to ensure its safety and viability.

Can my systems scale on-demand and under stress?

The behaviors of the financial markets and their participants have been predictably unpredictable. The word ‘volatile’ is having a moment.

Not all systems are built to withstand a change in the status quo.

For example, consider the trade volumes captured on our system through most of Q1 2020, when, I am sure I don’t need to remind you, so much changed. Prior to March 2020, the average trade volume fluctuated between 47,000 and 75,000 trades per day, with only four days above 100,000 (and none above 115,000). In March 2020, we saw the 30-day average steadily climb to over 100,000 trades per day and had a single day that topped 200,000.

Our SaaS solution was built to scale and handle this massive uptick. Most on-premises systems cannot. Our ability to scale has everything to do with the features I mentioned above: cloud-based technology, automation, and a broad base of support and development expertise.

What is my key-person risk?

A frightening feature of the COVID-19 health crisis is that such a high percentage of people are exposed to and sickened by the virus. The vast majority, thankfully, recover completely, but with a minimum of at-home rest and required quarantine. Quite simply, anyone on our teams may need to take a few weeks off.

If you felt you had key-person risk before COVID-19, you are surely feeling it acutely now.

How does SaaS mitigate key-person risk? Through automation.

Automation can solve key-person risk. For example: roughly 95% of Clearwater’s daily reconciliation checks are completed automatically, with zero human intervention. That impressive accomplishment is a testament to the strength of our technology; and it means data is available sooner and at a higher level of repeatability, transparency, and auditability than if it were processed manually.

Does the quality of my data exceed industry standards?

Multi-tenancy is the keystone to data quality. It’s a shared system: any improvement made is to the benefit of all users.

Beyond our own data scrubbing efforts, the real power comes from our thousands of Clearwater clients, many that invest in the very same instruments, reviewing the data in their portfolios on the Clearwater platform each day. Inconsistencies are quickly communicated and corrected. Each correction fortifies our common security master data set: the work is shared, to the benefit of all.

Additionally, multi-tenancy ensures the security master data used to model your investments is accurate, verified, and trustworthy. And (it must be noted) that work continues uninterrupted when individuals need to miss work. 

What about my budget?

Another feature of many SaaS models is their approach to contract and billing agreements. Many contracts are month-to-month, providing flexibility as strategies are adjusted in challenging times.

While several companies are trying to ensure that their infrastructure holds up, many Clearwater clients are playing offense: acquiring new customers or companies, investing in new pools of assets, adjusting their portfolio strategies. Our solution — truly, our partnership — enables them to do so now, without adding to their operational burden. We help them scale, and we open new investment opportunities.

From all of us at Clearwater, I wish you well during these challenging times. Request to meet with a Clearwater team member to learn more.


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