Gartner Research

Software Licensing Basics Insurance CIOs Need to Be Aware of to Manage Costs

Published: 27 July 2017

ID: G00323587

Analyst(s): Richard Natale, Juergen Weiss

Summary

North American and European life and P&C insurance CIOs evaluating policy administration software face a plethora of vendor licensing models, making financial comparison hard. Insurance CIOs driving digital change need to understand those models to manage the total cost of ownership of IT assets.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • A fragmented and challenging policy administration software market will allow insurance CIOs to benefit from more-flexible licensing options
  • Policy administration software vendors are using multiple license schemes, making price comparisons and TCO metrics for insurance CIOs very difficult
  • Two-thirds of policy administration software vendors charge 18% to 20% of initial licensing fees for annual maintenance, so insurance CIOs are required to carefully evaluate maintenance scope and service levels
  • A growing number of policy administration software vendors offer cloud computing licensing options, but insurance CIOs need to analyze the scope and licensing implications to avoid costly mistakes

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