Today’s insurers know that their competitive survival depends on embracing innovation. But for the future-forward insurer, that’s not even half the battle.
The Harvard Business Review notes that insurers have traditionally faced two options for implementing new IT systems, both of which come with considerable tradeoffs. They could either have their own developers build entirely new systems — a model that aligns more closely with a company’s specific business requirements, but which also entails higher costs and longer development times. Alternatively, insurers could turn to external vendors — a much cheaper option that allows for quicker installation, but potentially at the expense of an ideal fit with the insurer’s business needs.
However, this old dichotomy need not hobble insurers pursuing digital transformation. In recent years, a third, more viable option has emerged: No-Code/Low-Code (NC/LC) development, which requires little to no programming skill, with technical specialists typically required primarily for system maintenance.
NC/LC applications check all the boxes insurers need to be filled: They can be well-tailored to insurers’ business requirements. Organizations can quickly deploy NC/LC applications. And on average, these applications cost much less than internally developed systems.
Here’s what insurers should know in order to get the most out of the NC/LC revolution.
Moving toward agility
Insurers vying to become agile organizations could do a lot worse than implementing NC/LC solutions. And agility is precisely what insurers seek in today’s fast-evolving market landscape.
As a recent McKinsey study found, agile companies move products to market five to seven times faster, enjoy a 20% to 30% productivity boost, and far outperform on both customer satisfaction and employee engagement compared to their less nimble counterparts.
Prior to the introduction of NC/LC applications, for many insurers, launching a new product or pivoting to a new business focus came at the cost of valuable time. For example, a product manager would open a project request; then, a business analyst would identify requirements, create a business plan, add the product request to the pipeline, and so on. Meanwhile, actuaries would need to construct risk models, while marketers planned launch campaigns, and operation specialists fine-tuned the required underwriting and claims processes.
These intricate, cross-functional processes didn’t just come at the cost of time and resources: Their inefficiency also meant that insurers were less equipped to deal directly with customers’ needs, making it more difficult to nurture meaningful relationships and sustain engagement.
Given how quickly market conditions and customer expectations are evolving, the flexibility of NC/LC development becomes a vital asset, providing the foundation necessary to efficiently introduce new products and personalize policy features.
NC/LC and the future of insurance
The rise of NC/LC platforms empowers insurers to unlock the benefits of cloud computing and microservices more easily, which enables them to quickly scale and launch new product offerings.
What’s more, NC/LC tools can be tailored for the development of digital-first processes including rating, quoting, issuance, endorsements and renewals — making for a more productive, efficient organization and better-served, more satisfied customers.
Equipped with the infrastructure necessary to fast-track how they build, test and launch new products, insurers will gain a distinct competitive advantage over their more inefficient rivals. Take the plethora of different considerations involved in P&C products: payment schemes, renewals, duration, regulatory requirements, and more. Creating NC/LC “citizen developers” unlocks the speed and self-sufficiency that today’s organizations need to achieve true agility.
Make no mistake: Coders and developers have critical roles to play in the modern digital economy. But are they needed for everything? Too many insurers have learned the hard way that over-relying on them is a recipe for operational inefficiency, which is precisely the opposite of what organizations are trying to achieve with their digitalization initiatives.
That’s why it’s essential for insurers to put product innovation abilities directly into the hands of those who work most closely with customers and can harness their understanding of policyholders’ needs to strengthen product offerings and accelerate development so that pain points can be quickly removed, and opportunities swiftly seized.
Insurance is an inherently complex business with thousands of relevant data points to consider, intricate algorithmic calculations, regulatory requirements and more. To navigate this complexity, insurers can benefit mightily from the combination of a structured data-model application, in combination with NC/LC capabilities that support agility, seamless evolution, efficiency, and self-sufficiency.
As Charles Darwin once put it, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
The same holds for the insurance industry. Fortunately, the NC/LC revolution offers insurers precisely what they need to adapt, survive and thrive.