The build-or-buy dilemma is as old as insurance technology. And developing an in-house system for reinsurance may seem appealing. But its substantial challenges can outweigh the benefits. Here are the key reasons why licensing an established tool is often the wiser option:

1. Time and Resource Investment
   Building a secure, reliable, and scalable system requires a significant time commitment from the product and software development teams. Every nuance of the system must be carefully designed and configured to meet user expectations, which can lead to prolonged development timelines.
2. High Development and Maintenance Costs
   In-house development is not just about the upfront costs. It also includes ongoing maintenance expenses. As the business grows, the system's requirements will evolve, needing frequent updates and interventions from developers. This can strain budgets and resources.
3. Integration Challenges
   Integrating an in-house system with existing systems is often a challenging task due to compatibility issues, unexpected technical hurdles, and resource bottlenecks. These challenges can lead to significant delays and operational inefficiencies.
4. Scalability and Reliability
   Scaling an in-house system to meet growing business needs requires extensible infrastructure and constant monitoring. The system's flexibility to adapt to changes and increasing resource requirements has to be determined in advance, which ties back to the first two key challenges of time and cost.

5. Proven Solutions Are Readily Available
   Licensable reinsurance management systems are built with domain knowledge, years of refinement, and user feedback. They’re designed to address complex reinsurance calculations, offering seamless integrations, scalability, and regular updates to keep pace with industry changes.

Ultimately, the decision comes down to budget, time, and the willingness to navigate uncertainties when building your own reinsurance management tool. Licensing a system, however, gives businesses access to a proven, cost-effective system while freeing up internal resources to concentrate on strategic goals and core priorities.

The world's leading reinsurance management system, SAP S/4HANA Insurance for Reinsurance Management, is scalable, comprehensive, and designed to integrate with other systems and SAP modules. It adapts to ongoing industry changes, trends, and regulatory requirements with regular updates, ensuring businesses stay current and compliant. Trusted by customers on every continent, SAP S/4HANA Insurance for Reinsurance Management has been chosen by four  out of the five largest global reinsurers.

Since 1987, msg has been developing reinsurance systems, leveraging our extensive expertise. With a global team of more than 300 consultants, we provide comprehensive support for product development, system implementation, and ongoing client needs before and after go-live. This commitment has earned the trust of more than 65 international clients who rely on our expertise to ensure their success.

msg global has all the necessary resources for project implementation and management, from rapid design to final delivery. With a global presence from Asia Pacific to the Americas, we guarantee efficient and timely execution of projects worldwide. If you are interested to learn more, please contact us via link.