In the last few weeks, another tech giant entered the low-/no-code space when Amazon announced a new platform called AWS Honeycode. While the product does not break new ground from a technology perspective and is still immature relative to the market, it has created an avalanche of media activity centered on low-/no-code technology.
Low-/no-code is a complex space, but it’s worth the effort to navigate. It promises to address three of the biggest challenges in insurance IT: time to market for new capabilities, development capacity and managing cost.
What Low-/No-Code Looks Like
Low-/no-code is both a development paradigm whose influence continues to broaden and a rich market segment with dozens of vendors completing for mindshare.
As a development paradigm, low-/no-code is everywhere. It can be found embedded in CRM platforms such as Salesforce and MS Dynamics, in integration tools from vendors like Informatica and Dell, in robotic process automation (RPA) tools like Blue Prism, in digital experience platforms (DXPs) such as Liferay and Sitecore and even in some policy administrations systems.
The market segment is often referred to as Application-Platform-as-a-Service, or aPaaS, because most solutions are now deployed in the cloud using SaaS licenses. Vendors such as Mendix, OutSystems, Microsoft (PowerApps) and now Amazon market their products as general-purpose development platforms to compete with (and eventually displace) traditional development environments like Java and .NET.
While some of these vendors include industry-specific functionality, most market to a range of industries and seek to compete on horizontal capabilities such as integration, workflow, native mobile support, user experience (UX) and the strength of their partner ecosystem/network. A recent Novarica report covers this segment.
The insurance industry also has its own industry-specific low-code platforms that Novarica refers to as insurance digital platforms (IDPs). Their DNA can be traced back to the agent portal. When core vendors began to offer portals as part of their administration suites, they found that adoption was lower than anticipated, especially among midsize and large insurers who chose to build instead. Packaged portals were seen as too restrictive in terms of customer experience (where insurers like to differentiate) and difficult to extend beyond the basic capabilities offered by the vendors’ back-end systems.
Vendors answered this need with the IDP. Digital platforms include pre-built integration to a vendor’s back-end system but are typically stand-alone and licensed/deployed independently. Their focus is insurance digital experience (web and mobile) applications, but they can be general-purpose enough to tackle a wide range of front- and back-office problems across the enterprise.
Like the horizontal players, IDPs often feature a rich partner ecosystem or network of plug-ins and canned integrations, but these tend to focus on insurance-specific capabilities needed for submissions, underwriting, rating, accessing third-party data and payment processing. Examples of IDPs include Majesco’s Digital1st and Sapiens’ DigitalSuite.
See also: Agile, Organizational Realignment
Does Specificity Matter?
The question is whether any of these marketing distinctions really matter. The answer is, as usual, “it depends.” While low-code platforms do overlap in many of their core capabilities, differences become clear when considering the specific uses that an insurer needs to support.
For insurers already running a vendor’s core systems, there can be compelling advantages to using the IDP from that vendor, especially when the primary use case is building agent or customer portals. If integration with multiple back-end systems is needed, insurers should also consider a broader range of options including the horizontal players. Some platforms are better suited to workflow/BPM, others are better for mobile development and still others excel in building customer-centric applications.
For an insurer focused on building customer-facing websites that require personalization, content management, social media integration and some lightweight application development, a DXP with low-code technology may actually be the best fit.
Another consideration is the target developer. Some vendors tout the benefits of “citizen development,” where line-of-business resources trained to build their own apps. Other vendors aim to make the traditional developer more productive, and some focus on enabling a mix of both with powerful features for business/IT co-development.
A final differentiator is licensing and pricing. While horizontal low-/no-code tools and DXPs compete with each other at scale, IDPs are often priced differently, and bundling with a core system purchase can be a pricing consideration.
A recent Novarica snap poll of insurers found that about 50% were using or had piloted a low-code platform. Novarica projects that by 2025, at least 80% of custom development projects in the industry will involve low-/no-code technology. All the big tech players now have a foothold in the space, and that makes it an area insurers should watch closely.