Moving Fast: Why No-Code is a No Brainer for Insurance
Table of Contents
- Increased competition pushes insurers to embrace agility with no-code
- Digital-first insurers are rapidly gaining market share
- Tech giants and insurance markets: not if but when
- A shift from product-centric to a customer-centric approach
- Digital challengers are leaders at simplifying the customer journey
- What are the challenges does no-code development solve for insurers in 2020?
- Work from home
- Constrained internal resources
- Slashed budgets
- Slow-release cycles
- Inferior Customer Experience = Lack of Competitiveness
- How can no-code help insurers solve these challenges?
- No-code enables insurers to catch up with digital-first newcomers
- Becoming an attractive partner for tech companies
- Amplifying internal resources and speeding up the pace of digital transformation
- Shift to no-code development enables insurers to focus on customer experience
- What is the ROI for insurers transitioning to no-code?
To catch up with digital newcomers, answer the challenges of working from home during the pandemic, and adapt to customer behavior changes, insurers have no choice but to adapt quickly. Transitioning a large portion of their development to no-code tools can help insurers achieve just that.
Increased competition pushes insurers to embrace agility with no-code
Until recently, there was no urgent need for insurance to change. The average insurance customer is between 40 and 50 years old. That means that they will continue to pay premiums for another 30 or 40 years. But then 2020 happened, and insurers are now forced to quickly transition to remote servicing and innovative revenue models to survive.
Digital-first insurers are rapidly gaining market share
Although challenger insurers are nothing new, incumbent insurers have been kept safe by the system’s inertia. While the financial crisis of 2008 forced banks to restructure and modernize at a rapid pace to survive, this was not the case for insurance incumbents until recently.
Today, digital-first insurers are no longer challengers -they are now major market players. Here are just a few examples:
- Lemonade: Disrupting the homeowners, renters, and pet insurance markets. Valued at $3.8B
- Root: Disrupting the auto insurance market by charging good drivers less. Valued at $6.7B
- Next Insurance: Disrupting small business insurance. Valued at $2B.
- Oscar Health: Disrupting health insurance. Valued at $3B
- Haven Life: Disrupting the life insurance market. Revenue $46M per year.
Tech giants and insurance markets: not if but when
When it comes to tech giants like Amazon, Google, and Facebook entering the insurance industry, the question is no longer if but when.
Large global tech companies have an enormous customer base that they can leverage when selling insurance. According to GlobalData, tech giant Amazon is planning to enter into the car and motorcycle insurance market with a pilot project launching in India later this year.
A shift from product-centric to a customer-centric approach
Over the last couple of years, the financial services industry has shifted from a product-centric to a customer-centric approach, driven by the growing popularity and accessibility of digital channels.
Digital challengers are reinventing the customer experience in insurance. They are creating new, innovative, and tailor-made insurance products. But they are also introducing new and unique ways of engaging with customers such as slick digital interfaces with customer touchpoints throughout the entire journey into the insurance product offering.
Incumbent insurers are product-focused and traditionally relied on third parties to distribute their products. Digital challengers have a decisive advantage as they relied on the direct channel since their inception.
Digital challengers are leaders at simplifying the customer journey
According to the home insurance provider Hippo, over half of the people would rather go to the dentist than deal with their insurance company. Many insurers are painfully aware that customer experience is indeed their Achilles heel. They might have superior products, but customer experience is lagging behind.
Digital challengers are proactive at addressing customer pain points and removing friction. Tech-driven startups have largely digitized customer experience from end to end. These companies allow customers to take out a policy or update it at any time from anywhere at a click of a button. Meanwhile, incumbents still often require hand-signed documents and clunky paper or PDF forms for such actions.
Meanwhile, a PwC study found that 39% of the customers consider their personal experience dealing with their provider the most important factor influencing customers’ trust in their insurer.
What challenges does no-code development solve for insurers in 2020?
So it is not a question that direct-to-consumer digital channel is king in 2020. But many incumbent insurers still struggle to match the pace of innovation offered by digital-first challengers. This happens for many reasons, but the main culprit is the reliance on traditional development projects that rely on code.
Work from Home
As companies are forced to shift to work from home due to the ongoing pandemic, IT departments have been struggling to ensure smooth operations. Roles and permissions, security, and access management are just some of the remote workforce challenges that they have to contend with.
Constrained internal resources
As technology comes to the center of the business model, IT departments are busy keeping the lights on while trying to foster innovation at the same time. Unfortunately, resources are limited, and IT leaders must prioritize tasks as they cannot tackle everything at once.
Developers are expensive and difficult to find, making scaling up development teams a challenge.
Many organizations are seeing the impact of the global COVID-19 pandemic. According to a recent TechRepublic poll of IT leaders, 62% of survey respondents will tighten their 2021 IT budgets.
COVID-19 will affect IT priorities:
- 26% of respondents reported that they would spend more on remote technologies that enable employees to work from home
- 22% will spend more on security
- 19% said most of their IT staff would work from home permanently
- 17% will postpone major projects.
Upgrading customer experience is once again put on the waiting list.
Insurers are notorious for their slow release cycles. Traditional IT projects in the financial sector take on average between 6 and 12 months to complete.
IT staff is overwhelmed with tickets, and they will always prioritize stable releases and security over customer experience.
Inferior Customer Experience = Lack of Competitiveness
Lack of agility is the main driver behind inferior customer experience on digital channels. Insurers must find ways to adapt to market demands quickly. The lack of agility is inevitable will lead to a lack of competitiveness.
How can no-code help insurers solve these challenges?
No-code development is beneficial in an ample of ways.
No-code enables insurers to catch up with digital-first newcomers
Over-reliance on code is holding insurers back in a competitive landscape. As digital becomes a major distribution channel for insurance products, agility and the ability to adapt fast to changes in the market become paramount. However, insurers are still held back by legacy code and over-reliance on internal IT departments who are swamped with tickets from all over the organization.
Becoming an attractive partner for tech companies
When it comes to tech giants, the picture is a little different. Since customers are reluctant to purchase insurance from tech companies, partnering with a third-party provider is a better strategy. Amazon’s partnership with insurtech Acko rather than an incumbent also highlights the tech giant’s desire to work with digital and agile companies. So when it comes to tech giants insurers must quickly ramp up their digital capabilities in order to compete with digital insurers for those valuable partnerships.
Amplifying internal resources and speeding up the pace of digital transformation
No-code tools offer insurers the opportunity to quickly catch up without overstretching already strained internal resources.
No-code platforms are quickly gaining traction in enterprise IT for one simple reason: agility. By introducing no-code tools with built-in security, compliance, and other considerations, organizations can quickly scale their digital channel by amplifying internal IT resources.
No-code tools help legacy insurers accelerate their digital transformation, enabling them to build end-to-end digital products in days rather than months. Using a drag-and-drop interface, organizations can quickly release customer-facing products to integrate their own systems with little effort. No-code makes it simple to offer access to highly personalized financial journeys and products for customers.
Shift to no-code development enables insurers to focus on customer experience
Digital challengers are customer-focused. That is why removing friction from customer experience has been one of their competitive advantages. For example, digital insurers have completely changed the style of communication between insurers and their customers. Home insurer Lemonade was a pioneer in this regard – they were one of the first insurance companies to remove friction by removing the legal jargon and using plain talk to communicate with their customers.
Digital insurers are quickly gaining ground by running circles around incumbents when it comes to digital customer experience. They simplified terms by removing the legal jargon. They introduced the availability of quick, instant quotes online or via apps, personalized experiences, seamless management of their policy, and more niche lines or tailor-made, flexible cover.
To stay competitive, incumbents must adapt. And they must do so fast. No-code tools enable insurers to accelerate the pace of digital transformation, push new releases to the market within days (not months) and embrace agility needed to survive in todays’ competitive landscape.
What is the ROI for insurers transitioning to no-code?
Transitioning to no-code tools means that insurers can release new products to market quickly with less internal resources. Simultaneously, by removing manual processes with no-code tools, insurers can quickly digitize and reduce operational overhead. EasySend is a no-code platform for building and optimizing digital customer journeys in insurance and banking that empowers insures to:
- Grow revenues via better customer experience
- Save development costs
- Release new digital products to market in a matter of days
- Save maintenance costs and reduce backlogs
- Save back-office processing costs by integrating customer-facing interfaces with internal systems
- Reduce errors and maintaining data integrity by quickly removing manual processes