An emerging trend gaining traction in the insurance industry is the use of low-code/no-code development platforms to build applications for insurance businesses. While there are some distinctions between the two, for the purpose of this blog, low-code/no-code will be considered as one entity. Low-code/no-code platforms offer users a graphical interface to develop business applications, whereas traditional application development involves a team of developers writing code. With low-code/no-code tools, companies can digitize their insurance systems with analysts or other non-developers. Predictions are that half of the medium to large companies will adopt this platform by 2023 while it is already one of the hot new movements in the insurance industry.
Two simple examples of low-code/no-code platforms that you may use or be familiar with are Mailchimp and WordPress. Mailchimp allows you to quickly design an email campaign for your clients and prospects with no coding -- just drag and drop objects on pre-designed templates. WordPress is not a new idea or application as it has been around for almost twenty years. Originally designed as a blog-publishing application, it is currently the backbone for about 43% of the world’s websites and blogs. It uses pre-built themes and plug-ins to build and maintain websites and other web content.
Specific to the insurance industry, the low-code/no-code method of software development seems to respond to the increasing need to get new products to market quickly while avoiding the cost of experienced developers, especially when developers may be busy maintaining legacy systems. It allows the business to nimbly respond to evolving demands and efficiently introduce new policy systems or other necessary applications. Using drag and drop tools, the business (not IT) can develop or enhance an application in rapid iterations. Low-code/no-code platforms also eliminate the need for shadow IT departments that inevitably arise when business units cobble together their own automated solutions to avoid waiting for IT.
Sounds good, but is it all that it’s cracked up to be?
- Are there really gains in productivity? The low-code/no-code method of deploying useful software is reported to be as much as 5.5 times faster than traditional software development. The statistics touting the amazing productivity gains, however, may be based on simple applications, such building out a survey or an email campaign versus the development of more sophisticated business tools such as a rating system with multiple algorithms or a complicated policy administration system made up of accounting, document management, claims and more.
- Customizations may be limited. Using the low-code/no-code model may enable a business to create their own applications. But flexibility may be restricted when relying on templates and drag and drop objects. More limited software may not allow the extensive customizations that an MGA or program administrator require.
- Learn how to use an application to build an application. Low-code/no-code requires business users to learn new skills. The time necessary to build working software doesn’t go away, it is merely transferred from developers, who often have domain expertise and experience in architecting solutions, to more inexperienced business users or analysts. You may notice on your LinkedIn feed that at least weekly there are requests for assistance with WordPress and its templates. This is because companies that started out with what they thought was an easy tool for building a website now find themselves in need of an expert. With low-code/no-code, training is required to use the templates and drag and drop functionality, and the person building the software needs domain expertise and knowledge of system architecture. Non-technical employees may not be qualified to tackle developing a complete policy administration system. For example, if you struggle with Excel formulas and macros, it will be even more daunting to create working software in a low-code/no-code environment.
- Security is always a concern. The templates that are feature rich enough to build quality business applications may pose a security risk. Unfortunately, any security flaws will not be addressable by the business because they do not have access to or control over the source code. The vendor is ultimately responsible to remediate any security concerns with the templates or objects on which you built your application. Building your application on a platform may not allow you to recommend how often and where the application is backed up, how and when the data is encrypted and other security controls important to your organization.
- Consider future system migrations. While you may look forward to short release cycles and the lack of traditional development, you are still locked into the low-code/no-code vendor you select. If the underlying template changes, you may have to rework the screens and functionality you built on that template. Also, since the code is built on the vendor’s platform with their templates and conventions, it is more challenging to change platforms when you outgrow the application. Think about moving your website built on one platform to another platform or coding language – there is generally limited reuse possible with your web pages so you often must recreate the content, establish a new backup system and change the IP address.
So, how can you satisfy your need for getting your product to market quickly and reliably, with all the benefits of low-code/no-code, but none of the stumbling blocks? Consider selecting a vendor partner with the following benefits:
- Uses an agile approach to development. Identify a service provider that values limiting work in progress and increasing throughput. Be sure the vendor builds quality into the software and continues to inspect and adapt its processes. Work with a provider that routinely delivers working software while frequently interacting with its clients. And, most importantly, find a vendor that focuses on delivering high value software, based on the customers’ priorities.
- Can handle customizations. Look for a software partner that has already developed mature software platforms with proven methodologies and rich expertise in the MGA space. They should be able to demonstrate a variety of client customizations and allow you to imagine the customizations needed to run your own business.
- Enhances and protects your business’ security needs. Your software vendor should use a development methodology that minimizes the security risks as identified in the Open Web Application Security Project (OWASP) standards.
- Honors your need for speed. With a mature platform and developers that are domain experts, the right vendor can support your need to get your products to market quickly.
- Demonstrates proven integrations and migrations. Look for a partner who has experience successfully migrating data in and out of their applications, rather than having to build an application from scratch. Also consider a vendor that has working integrations with a variety of service providers. Change is inevitable and it is important to select a vendor that can flexibly support your evolving automation needs.
We at MGA Systems are dedicated to helping MGAs, program administrators, wholesalers and carriers create software applications that are precisely suited to the needs of your business. Contact us if you’d like to discuss how we can help you get your new programs – or enhancements – to market quickly.