Insurance Insights: Low Code

Innovation | Kevin Crawford |
06 April 2021

From our conversations with Insurance leaders, several topics have emerged as key focus areas for 2021 and beyond. In this series, some of our experts will provide insights on how to adapt, accelerate, and innovate in Insurance by tackling the areas of Open Insurance, Data Exploitation, Cloud Migration, Customer Retention & Cross-Selling, Intelligent Underwriting Workbench, and Low Code. In this final part, Kevin Crawford traces the shift from more traditional to Low Code development platforms and shares four key lessons for insurers who want to adopt Low Code tools.

FROM LEGACY MONOLITHS TO LOW CODE PLATFORMS

My first introduction to the insurance industry was 25 years ago when I joined what was then a small IT consultancy company that specialised in supporting and developing legacy insurance platforms, which had either been developed in-house or by software houses that were no longer in operation. What became apparent quickly was that the return on investment of maintaining your own platform was not sufficient and brought little in the way of competitive advantage. Thus, one by one, our customer base looked to replace their legacy platforms with more modern packaged applications. There was, however, a lack of faith in the suppliers delivering into the market at that time, which allowed my organisation to build a fresh, innovative set of applications and become one of the market leaders.

A lot has changed since then, but it also feels like history is repeating itself. The organisations that moved from their own platforms to packaged solutions now face the same legacy challenges of maintaining monolithic applications with significant technical debt, manual regression testing challenges, and infrequent and painful release cycles. Being part of a shared investment club worked well for commoditised services where there was no real competitive advantage. However, with the growth of InsurTechs and API connectivity and the newfound fear of being disrupted, the opportunities and the need for Insurance companies to differentiate themselves have increased greatly.

As replacing or changing legacy policy administration systems is very time-consuming and expensive, insurers are now looking to new tools, such as Low Code application development platforms to deliver new products to the market faster and at a lower cost. Low Code platforms enable you to build applications using a visual interface, development toolkits, and reusable components, with little need for coding – depending on the complexity of what is required. This allows applications to be built significantly faster and in a more agile and collaborative way, which ultimately enables organisations to react to change without the risk and cost of traditional development projects.

ADOPTING LOW CODE DEVELOPMENT

The popularity of these tools is on the rise as the demand increases, and the number of new offerings is growing rapidly. In fact, Gartner forecasts that “75% of large enterprises will be using at least four low-code development tools for both IT application development and citizen development initiatives” by 2024. So, there are plenty of reasons for organisations to use them, but what should they take into consideration when looking to adopt Low Code development platforms?

Our experience has taught us the following key lessons:

Keep it real! Low Code tool providers will claim that applications can be built within days or even hours. This may be true for something that can be demonstrated as a proof of concept. However, if you want to build something to be used within a production business application, then the hours and days will more realistically be weeks and months. This will certainly be the case if the deliverables are externally facing, have integration points and include other elements such as document production.
Keep it simple! These tools are designed for creating reasonably simple applications, such as quote-and-bind functions. Trying to extend them further will become quite challenging both from a configuration and maintenance perspective. These tools are not meant to replace complex applications like an ERP system, for example.
Make it repeatable! When developing multiple but similar applications, such as insurance products, create a template first and then try to use this as a basis for the individual products going forward. The adaptation and implementation process shouldn’t be wildly different then.
Know its limitations! If you are trying to create something that is highly customised and complex, it will often be more beneficial to revert back to more traditional development tools. However, this should still be done following an Agile methodology and performed in a collaborative way with the business to maintain buy-in.

Insurance companies need to become able to react to market changes more quickly. Whether this is to increase distribution channels, bring new products to the market, or digitalise existing offerings, Low Code platforms offer a viable alternative to traditional methods. Whether these tools are here to stay is debatable and something that time will show; what is certain, however, is that technology will continue to evolve. Insurers, therefore, should choose platforms that suppliers will continue to invest in to avoid the risk of these becoming the next generation of legacy systems that their IT departments will want to replace at some point in the future.

Kevin Crawford

Global Head of Insurance Delivery

Kevin has spent the last 25 years working with insurers and brokers and helping them maximise the value they are gaining from investments in technology. For a significant amount of this time, he worked in the London market for a leading software provider, implementing their core policy and claims systems. At Endava, Kevin is leading our global Insurance delivery operation, ensuring that we have the right delivery organisation in place for our customers. Outside of work, Kevin has an eclectic range of hobbies – from sedate activities like paddle boarding and yoga to more lively ones, such as diving off stages at punk concerts.

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