Low code for insurance players can be a competitive differentiator. Historically, the insurance sector has been slow to adapt. However, with customers increasingly demanding speedy responses and seamless digital experiences, insurers find they must keep up or be left behind.
Digital technologies have already had a significant impact on the insurance industry. The industry has become more customer-oriented, eliminated unnecessary intermediaries, and streamlined operations. Today, customers can buy policies, renew them, and raise claims quickly and easily through digitized processes. Insurers use chat facilities and chatbots to provide instant answers to customer queries. The claims process has also become more efficient with the help of artificial intelligence, machine learning, and predictive analysis. Many digital insurance companies that take a digital-first approach to internal and customer-facing operations have also emerged.
However, despite the growing emphasis on digitization, many insurance companies still struggle to integrate digital solutions. A recent survey by KPMG found that nearly 40% of businesses aren’t using digital tools effectively [1]. according to Forrester Research, even though new risks are constantly emerging, only 50% are adequately insured [2]. This is true even though the sector spends 15% more on IT than others.
The Potential of Low Code for Insurance Players
The insurance industry faces several unique challenges, such as regulatory compliance, risk management, and legacy technology systems. Low-code development platforms can help overcome some of these challenges. Since they’re highly scalable and configurable, they can be rapidly customized to meet the specific needs of every insurer. The simple drag-and-drop interface allows users to build applications without the need for specialized software development skills.
Yet another advantage of a low-code platform is its ability to streamline software development, making it faster and more cost-effective than ever before. In addition, low-code platforms automate numerous software development tasks, freeing developers to focus on user experience and data security.
Above all, unlike traditional programming languages, low-code platforms are easily accessible to business users, enabling a citizen developer approach. As a result, insurance use cases are an ever-expanding repertoire.
Low Code for Insurance, Forwarding the Citizen Developer Approach
According to Gartner, by 2024, 65% of all enterprise applications will be built using low-code technologies [3]. This rapid adoption will be primarily driven by low code’s intrinsic ability to empower business users to become citizen developers. As a result, IT could hand off some development tasks to the business side, freeing up time to focus on innovation. In addition, business users can develop custom apps with greater agility rather than adding to the vast IT backlog. Business users are also more likely to embrace the application they helped build, which could increase adoption.
Low code for insurance would help insurers to build applications ten times faster and make changes in a few hours instead of months. Again, small and medium-sized insurance companies benefit the most. They gain a competitive edge by foregoing full-fledged development teams that need substantial upfront investment in setup, deployment, and training.
Low Code: The Catalyst for End-to-end Digitization
According to McKinsey, premium growth in the insurance business will be 1.2% in 2020, down from more than 4% in the previous ten years, while profits will be down roughly 15% from 2019 [4]. It also noted that insurance companies require digital solutions that work well with their legacy systems. Forrester’s research on insurer portals too emphasized how digitizing the whole policy lifecycle is critical [5]. In addition, consumers and agents/intermediaries increasingly expect seamless omnichannel experiences, which can only be delivered if insurers’ back-end systems interact.
Low code for insurance enables this end-to-end digitization by providing a rapid application development environment, seamless integration with legacy systems, collaboration between business and IT teams, scalability, and agility. Incorporating artificial intelligence (AI) into internal processes is also critical since it allows companies to use customer information fully, enhance user experience, analyze risk more intelligently, and optimize policy reviews and renewals while finding cross-selling possibilities.
Wrapping Up
As the insurance industry continues to face challenges around digital transformation, low-code platforms present a promising solution. Their scalability, configurability, and ability to streamline software development offer a faster, more cost-effective way to build customized applications. Gartner forecasts that by 2024, 75% of large enterprises will use at least four low-code development tools for IT application development and citizen development initiatives [6].
According to a 2021 State of Application Development Report by OutSystems, 79% of respondents in the insurance sector reported they were already using or considering low-code platforms. And with the market for low-code development projected to reach $187 billion by 2030, the potential impact on the insurance industry is significant [7]. With the right tools and strategies in place, insurers can survive in the rapidly evolving marketplace and thrive for years to come.
References
The COVID-19 catalyst: Insurers race to digitize. (n.d.). KPMG. https://kpmg.com/be/en/home/insights/2020/11/ins-the-covid-19-catalyst-insurers-race-to-digitize.html
Carney & Bandyopadhyay. (n.d.). Predictions 2023: Insurance. Forrester. Retrieved March 14, 2023, from https://www.forrester.com/report/predictions-2023-insurance/RES178195
“Gartner Forecasts Worldwide Low-Code Development Technologies Market to Grow 23% in 2021.” Gartner, www.gartner.com/en/newsroom/press-releases/2021-02-15-gartner-forecasts-worldwide-low-code-development-technologies-market-to-grow-23-percent-in-2021 Accessed 14 Mar. 2023.
“Creating Value, Finding Focus: Global Insurance Report 2022.” McKinsey& Company, www.mckinsey.com/industries/financial-services/our-insights/creating-value-finding-focus-global-insurance-report-2022 . Accessed 14 Mar. 2023.
Williams, Jeffery, et al. “The Forrester WaveTM: Insurance Agency Portals, Q3 2020.” Forrester, 13 Aug. 2020. https://reprints2.forrester.com/#/assets/2/85/RES157460/report
Shuler, Kevin. “56+ Critical Low-Code Statistics to Review for 2023.” 56+ Critical Low-Code Statistics to Review for 2023, https://quandarycg.com/low-code-statistics
Markets, Research and. “Global $187 Billion Low-Code Development Platform Market to 2030.” GlobeNewswire News Room, 10 Nov. 2020, www.globenewswire.com/news-release/2020/11/10/2123468/28124/en/Global-187-Billion-Low-Code-Development-Platform-Market-to-2030.html.
