The impact of delay costs in a build or buy decision

The build vs. buy decision is now one of the most impactful choices for technology and transformation leaders. As competitive pressure intensifies across the market, customer expectations are rising in parallel with technological advancements. The ability to modernize quickly is now a direct driver of both competitiveness and profitability.

Insurers are under pressure to evolve away from legacy infrastructure while enabling innovation that creates tangible business value. This decision is especially urgent now, as the opportunity to seize competitive advantage is matched by the risk of falling behind. Delays or missteps come with heavy costs: from lost underwriting performance to increased operating inefficiencies. The window to act is narrow.

The decision to build or buy must be weighed not just in terms of technical ownership, but through the dual lenses of Total Cost of Ownership (TCO) and Time to Value (TTV). These metrics have become essential for making informed, future-proofed investments. Often though, these analyses do not go far enough to paint a clear picture of the total value realised, or the total costs incurred.

Build vs buy: a false dichotomy?

The build vs. buy conversation is no longer a binary choice. Insurers are increasingly adopting hybrid strategies, building where they can create competitive advantage and buying foundational components. This is an approach that accelerates delivery, scalability, and integration.

Internal development remains a vital lever for differentiation. The insurers leading the market are those focusing IT resource on unique pricing logic, proprietary models, and domain-specific data enrichment capabilities. These are areas that drive true advantage.

However, this focus requires discipline. Foundational capabilities such as secure infrastructure, deployment pipelines, DevOps, and API orchestration should not justify a bespoke build by default. These are well-served by modern, extensible platforms that remove the operational burden and free in-house teams to invest in more strategic layers of the stack.

In one case, a multi-year internal build covered only 30–40% of the functionality offered by a commercial platform like hx Renew. Despite high investment, the scope was too narrow to meet enterprise-wide needs. The project failed to scale beyond a single line of business, ultimately leading to its demise.

Buy technology that supports internal innovation

Platforms like hx Renew help insurers reallocate effort to high-value activities. Rather than spending years recreating infrastructure and core workflows, insurers can deploy Renew to provide:

• Actuary empowerment. Actuary-owned model deployment and maintenance

• Version control and governance. Automated version control and governance capabilities

• Data enrichment. External data ingestion and enrichment via internal and external data pipelines

• Underwriting excellence. A seamless underwriter workflow, 100% configurable by model and line of business.

This enables insurers to concentrate internal resources on areas that shape their business identity while still ensuring scalability, security, and integration across the pricing ecosystem.

Risk controls and accelerating time-to-value in transformation projects

When the build vs. buy decision is made without a structured evaluation of TCO and TTV, the consequences can be significant:

Cost Risks

1. Underestimated TCO: Build project scopes often fail to fully explore the cost of long-term maintenance, platform upgrades, and internal support.

2. Cost overruns: Initial estimates frequently fail to reflect the full scope of resourcing, especially when dealing with integration complexity, architecture changes and multi-geo/product roll-out.

3. Opportunity cost: Resources allocated to foundational build efforts are diverted from initiatives that could be driving underwriting performance or customer impact.

4. Lost innovation leverage: SaaS providers invest 30–50% of revenue into R&D, delivering continued platform enhancements that would be difficult for insurers to replicate.

Delay Risks

1. Delayed time to market: Internal builds take up 2–3 years to deliver a MVP (Minimum Viable Product). One large insurer reported a 2.5-year timeline, while others observed delays of up to 5 years. Elixirr found that timelines can extend out as much as 10 years.

2. Technical debt upon launch: Long build cycles mean that solutions may lag behind current needs by the time they are delivered.

3. Slow user adoption: Underwriters are slow to embrace homegrown tools that lack modern UX or real-time feedback loops, sometimes preferring their own "parallel" tools.

Resource Risks

1. Talent challenges: Hiring and retaining technical talent capable of building and scaling a modern pricing platform is increasingly difficult. With AI tools becoming the norm, this specialist talent is already in severe shortage. Skilled technical actuaries and underwriters want to develop their skills in widely applicable technologies, developing skills in a niche, in-house platform that won’t aid them in future endeavours won’t be as appealing.

2. Operational strain: IT teams are often pulled away from innovation to manage infrastructure, integrations, and support. This tech debt racks up quickly.

3. Sustainability: Even if the initial build is successful, ongoing upgrades and performance tuning require significant investment - let alone factoring in improvements and innovation needed to manage an ever changing risk landscape.

The impact of a modern pricing solution

hx Renew is a pricing engine, but much of the value derived from the platform comes from its capabilities outside of the engine itself. These come out-of-the-box, but equally Renew is designed to be built upon. This includes:

1. Submission ingestion

2. Data cleansing & validation

3. Third-party data ingestion

4. Optimised model updates

5. Authority referrals & peer review

6. In-rater management information & analytics

7. Portfolio steering tools

8. Document generation

9. Impact analysis & testing

10. Audit logs & version control

11. Benchmarking, to name but a few.

For insurers with broad transformation goals, buying a flexible platform provides a path to scale that is faster and more stable than building from scratch.

Conclusion: Buy to build better

In the current environment, delaying or misjudging the build vs. buy decision carries significant commercial, operational, and strategic consequences. Insurers risk falling behind competitors, missing windows of opportunity, and locking valuable talent and budget into initiatives that fail to deliver. In some cases, projects are abandoned entirely after years of effort, leaving legacy issues unresolved and momentum lost. The insurers that succeed will be those who:

• Invest internal resources in building differentiated pricing and decision capabilities

• Deploy proven platforms to support scale, speed, and stability

• Use TCO and TTV as core decision metrics, not afterthoughts

Buying is not an outsourcing of strategy, it’s an investment in acceleration. It’s how insurers modernize efficiently, reduce delivery risk, and free up internal teams to build what truly matters.

The most forward-looking CIOs and CTOs aren’t abandoning internal development - they are still providing bespoke value but have turned their attention to building “on” existing platforms, instead of building the foundation themselves. By leveraging expert vendors strong foundations, they reduce complexity, accelerate change, and future-proof their transformation roadmap.

Interested in learning more? Book a demo to see the full capabilities of hx Renew and we can talk you through how a transformation project could be executed, leveraging your pre-existing systems, integration requirements and meeting your requirements.