Property & Casualty Insurance Software: Open-Source vs ISi

What’s an affordable option for policy management software? Open source may sound like a good idea– but is it?

Author: Fran Majidi

Published on: Oct 10, 2025

Small insurance companies, MGAs and niche insurers are increasingly using open-source software for property and casualty insurance software. Open source software differs from the traditional proprietary model more common in the insurance industry, mainly because it is free to use. However, there are costs involved in developing and configuring the software. There are other cons as well.

Insurance companies are not necessarily replacing their legacy systems with an open-source platform, but they are updating operations with it. The operational efficiency of the open source platform they use lies entirely on the developers they hire. There is a better all-in-one insurance software solution that may actually reduce cost and help the insurance company grow. Here’s more.

property-casualty-insurance-software-open-source

Why Insurers Are Using Open Source

For decades, a handful of proprietary software vendors have been servicing the majority of insurance companies. These systems offer comprehensive policy and agent management but can be too expensive for smaller insurers and MGAs. Customizing them is challenging due to the required coding, which can make insurers feel constrained and trapped.

Insurers are looking at open source policy management for these benefits specifically:

Savings: There are no licensing fees with open-source insurance software.
Flexibility and Customization: Insurers have complete control over the codebase of an open-source platform. They can customize the software to their specific business processes and product lines.
No Lock-in: Insurers can choose products, pricing, and support from multiple vendors. They own the technology stack.
Security: Some people consider open-source software to be more secure because developers are continuously fixing vulnerabilities.
Innovation: Insurers leverage AI and data tools like Google’s TensorFlow and Meta’s PyTorch, which developers build on open-source frameworks.

Internet Solutions for Insurance (ISi) vs Open Source Software

The bigger vendors (Guidewire, Duck Creek, Majesco, etc.) offer great solutions but do not fit in all insurers’ budgets. However, there is a better alternative to using open source software that may prove to be less expensive and a better fit for a small insurer or MGA.

Modotech’s Internet Solutions for Insurance (ISi) is a property and casualty insurance (P&C) software that services smaller P&C insurers, specialty insurers and MGAs at a more affordable price. It is the best value for smaller insurers looking to compete with large insurance companies.

ISi does not require coding on the part of the insurer because changes are table driven and easy to make. The platform is also highly customizable and flexible for that same reason. Modotech also offers personnel training and provides an on-call service staff for assistance.

ISi is a licensed system that insurance companies implement and customize. ISi isn’t a subscription-based SaaS product. There is a licensing fee for use of the core system, and additional fees may apply for services like client-specific customizations, integrations and ongoing support.

ISi relies on technologies that other vendors commonly use too, so there’s less of a feeling of being locked in. In addition, the insurer owns all of their own data and can remove it from the ISi platform with ease.

ISi is a licensed system that insurance companies implement and customize.

Feeling Locked In With Insurance Software

In general, all policy administration systems have a certain level of "lock in." To change the software, you have to migrate the data. If an insurer customized their system, they’d have to repeat those customizations in the new environment. Even with open source, they would have to find another platform that does what they need, then customize it and migrate data.

Where a system like ISi locks the client in is with a contract, which means moving off the software at the renewal date. The insurer could run off the system sooner, but they’d have to pay the remaining balance for the contract term. Otherwise, it wouldn’t cost much to switch to an open source system from ISi.

Benefits	Open-Source Policy Admin System	Internet Solutions for Insurance (ISi) Admin System
Costs Savings	Must hire an in-house team of developers and other technology support staff to manage, maintain and secure the software.	Changes are easy to make after training. A support staff is on call, but existing personnel can perform many functions.
Flexibility and Customization	In-house developers or contractors must set up customization by creating a unique codebase.	ISi is highly customizable, including but not limited to: layout, restrictions, validations and application questions. These changes are not code-based and are faster to make.
Getting Locked In	To switch to another system, the insurer would have to find another platform that does what they need, then customize it and migrate data.	Third-party vendors can be swapped out, and carriers retain control over their infrastructure. ISi uses standard technologies, so you can easily switch vendors. Insurers maintain full ownership of their data and can extract it at any time.
Security	Cons include public knowledge of a vulnerability until there’s a patch. Also, poor documentation and defaults leave the system insecure. They do not regularly schedule maintenance.	ISi’s security model emphasizes role-based access, secure tokens for policyholder interactions, encrypted integration and controlled maintenance operations. The policyholder portal is on a separate server, for added security, and enhanced customer journeys.
Innovation	Innovation depends solely on in-house developers.	ISi blends table-driven configurability, integration capabilities and unified administration into one platform. ISi enables insurers to easily change products, states or workflows. An all-in-one software, ISi offers real-time quotes, administration, claims and third parties. Modotech will also work with in-house developers, if the insurer requests collaboration. It also offers a policyholder portal.
Maintenance	Some projects are maintained but others are neglected. An internal team must manually update new regulatory codes or have a developer set up a way to automate the change.	ISi maintenance jobs automate accounting (includes agent commissions), policy processing, documents, regulatory codes, correspondence and third-party integrations.
Customer Service	N/A	Modotech enables the insurer to tailor their platform specifically to their needs. Users can customize underwriting rules, validation questions, portal layouts, and color schemes. The insurer can make changes, report issues or simply ask for more help by submitting a ticket for the ISi support team.
Agent Portal	The insurer must customize a company open source system to allow access to these other parties.	ISi has an agent portal, which masks or hides sensitive information only the insurer can see.
Customer Portal	The insurer must customize a company open source system to allow access to these other parties.	ISi has a separate policyholder portal, which is on a separate server for maximum security and to personalize the customer journey.

Key Players in the Policy Admin Open-Source Space

Nothing is free, and this is true for all free management software that is open source, because it requires developers. There are several open-source platforms and solutions gaining traction amongst insurers. Here are some of the most widely used.

Openkoda: This platform is not a ready-made application. It offers templates for policy management, claims processing, and embedded insurance. Developers can start with templates and customize them for the insurer.
Apache Software Foundation: Organizations use Apache Spark for large-scale data processing in tasks like underwriting risk assessment, claims fraud detection, and customer segmentation. This software requires development and configuration.
GitHub: GitHub offers Open Insure, which provides policy management and claims management capabilities, often targeted at small-scale or group insurance models. Open Insure also needs significant development and configuration.

6 Key Features Missing in Open-Source Insurance Software vs. Modotech’s ISi

1. Ready-Made Functionality

ISi is built as an all-in-one suite for the entire insurance lifecycle: quoting, binding, policy administration, billing, reporting and claims management. ISi offers pre-built workflows and document templates that are customizable. ISi also offers third-party integrations. Modotech can develop ISi in collaboration with the insurer’s developers or independently. Open-source solutions do not offer comprehensive suites that are ready-made.

The open-source space offers various tools (an open-source policy admin platform, an open-source data analytics engine, and open-source APIs). Developers then have to stitch them all together. This extensive effort and expertise can be more expensive than all the requirements and fees to run ISi.

2. Dedicated Customer Support and Develpment

ISi provides a dedicated support team, service level agreements (SLAs) and a single point of contact for bug fixes, troubleshooting and general guidance. With open source, there is no support line to call.

Modotech provides programmers to facilitate custom development while still benefiting from the overall growth of the base system.

Support with an open source platform is largely community-driven as forums with a community of developers. While some companies offer paid support contracts for open-source software, it's not the same as having a full-service vendor responsible for the end-to-end performance and stability of the system. Also P&C insurance is highly regulated, and ISi is only insurance focused and time tested.

3. Quality Assurance and Auditing

A proprietary vendor like Modotech has internal quality assurance (QA) processes, testing suites and a versioning scheme. They are accountable for the quality and reliability of their code.

Some open-source platforms do not follow strict code review guidelines or maintain regression tests. Overall, they do not guarantee the same level of professional testing and quality control that Modotech provides. This can lead to a less stable or reliable product.

4. Security Accountability and Transparency

ISi's security model uses role-based access, secure tokens, and encrypted integrations to ensure that maintenance operations are controlled and policyholder interactions are secure. For enhanced security and an improved customer experience, the policyholder portal operates on a separate server.

With an open-source code, community developers publicly disclose vulnerabilities once they find them. This can leave a window of vulnerability before an insurer can apply a patch. An internal team must actively monitor for security advisories, perform their own vulnerability scans and patch the software.

5. Intellectual Property (IP) Management

Modotech’s ISi comes with a clear, non-negotiable license agreement that defines how you can use the software.

Open-source software has hundreds of licenses, each with its own set of rules. A dedicated legal and technical team must work together to avoid potential intellectual property and legal risks.

Some licenses (like the GNU General Public License - GPL) require that your modified code also be open-source. For P&C insurers, this can be a major issue if they want to build proprietary intellectual property using an open-source platform.

6. Seamless Integration with P&C Third Parties

Modotech has spent decades building deep integrations with third-party data providers, a payment processing platform, rating engines and other tools that are essential for P&C insurance. These integrations are ready to use.

With open-source platforms, the insurer must build necessary integrations. Community developers build open-source solutions with APIs, but insurers must connect to data vendors, payment gateways, and other services This can be a costly and time-consuming process.

The Challenges and Risks of Open Source Insurance Solutions

The adoption of open-source policy management to a legacy system comes with challenges, which include the following:
Staff Expertise: Open-source solutions require in-house technical talent to implement, customize and maintain the system. Depending on the size of the company, this can be an obstacle for smaller insurers. Compliance and Regulation: Insurers must manually ensure that the codes they are using meet all the new regulatory standards. No Client Support: Insurers must rely on the open source community, which may not be as immediate or specific to the insurer’s needs as the support provided by a proprietary vendor like Modotech.

Frequently Asked Questions

What is the main difference between open-source and proprietary software?

The key difference is ownership and access to the code. Proprietary software is owned by a single company that controls the source code, development, and updates. You pay a recurring license fee to use it. Open-source software (OSS) has publicly accessible source code, so you can inspect, modify, and use it without a licensing fee. Think of it as renting a ready-made car (proprietary) versus getting all the parts to build and customize your own car (open source).

Which type of insurance software is more cost-effective?

The answer depends on your long-term goals. Proprietary software has a clear and often high upfront cost with ongoing subscription fees. The total cost of ownership (TCO) is predictable. Open-source software has no licensing fees, but the TCO can be higher due to the costs of implementation, customization, integration, and a skilled internal IT team to maintain it. For an insurer with the right internal technical expertise, open source can be more cost-effective in the long run.

What is the role of APIs in an open-source insurance system vs a proprietary PAS?

APIs (Application Programming Interfaces) in open source act as essential connectors that developers use to bind a highly modular, tailored platform together. In contrast, a proprietary system like ISi is a highly customizable and modular all-in-one product, and APIs are primarily used to connect with various third parties.

The trend is clear: insurers are increasingly integrating open-source technology as policy management software. Open source platforms are not free, however, and there are better alternatives. To find out more about how ISi can save your company money with an all-in-one P&C insurance software solution, book a demo by clicking below.