For many years, IT departments have chosen Software as a Service (SaaS) as a route to manage and deliver software, but actuaries have resisted. Is this a justified concern, or can SaaS deliver a better experience for life financial reporting? How can quality be retained in an outsourced world? This third article explains.
Software-as-a-Service (SaaS) is a distribution model where the vendor hosts applications and makes them available to subscribers over the internet. This means your IT department does not need to install and maintain the software on your business’s servers or its cloud.
SaaS is often provided via cloud environments. These offer increased options for business continuity, disaster recovery and scalability. Such features are therefore common to SaaS offerings but not defining features; your own IT department is probably getting such cloud benefits for your IT-managed software.
SaaS may be associated with other aspects, such as different pricing models, browser-based interfaces, and access from phones or tablets; but this is not necessary.
For compute-heavy software, such as actuarial tools, the cost of the hardware is included in the SaaS supplier cost; while the headline cost might appear higher, the total cost to the company is not.
As long as you have access to the internet, SaaS is reliable. Service level agreements with the supplier formalize the availability and support. Agreements will also lay out other areas of responsibility.
Regulations (including S-II, DORA) and standards (ISO/SOC) ensure that the risks of using a third party are discussed and addressed; this typically results in a clearer relationship than with an in-house IT team who offer best-efforts support.
Actuarial software, from an IT perspective, is a large and complex estate of business-critical components that are used by a very small number of people. This makes it complex to deploy and causes a “don’t touch it” mentality towards its maintenance. Moving to cloud has improved matters in terms of offsite access, disaster recovery and hardware updates, but the core issues around support and updates remain.
By contrast, when the vendor hosts the software, the support and updates come from the people who know the software best and therefore happen in a timely fashion. This results in significant business benefits:
One of the key challenges with SaaS is ceding control of areas that you don’t need to manage. Would you review all Windows updates on your laptop? Would you review a new point-release of Excel? Would you review a Teams update with a new feature? Do you trust your IT team to manage these for you today?
Where are your business’ red-lines on control? Is it perhaps only reproducibility of results?
When adopting SaaS, you will need to research, plan for, and undertake several activities that you’ve not faced before. Often, though, your IT department will have already walked this path; its experience can be used as a baseline for what your company will accept. For example, if your HR system is in the cloud, your company must have considered and resolved how it handles data sovereignty issues.
Areas that you should consider include:
This summary was correct as of November 2025.
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