No-code software offers a way to build up products and systems in a relatively fast and simple way. Insurers, risk averse by nature, have avoided widely using it for years.
That may be changing.
Insurers and related start-ups in the US and beyond appear to increasingly embrace the technology as a cost-effective and easy to use alternative to their in-house technology systems. That change in mindset is long-overdue, industry experts and insiders say.
“With no-code, companies can actually minimize the risks,” explained Tomas Holub (pictured top), the Hong Kong-based co-founder and CEO of CoverGo, a no-code start-up that helps insurers, banks and MGAs in Asia and elsewhere digitize and automate their insurance processes. He’s confident enough in industry trends that he’s planning to relocate to the US and pursue wider growth.
“We want to be a leader in the insurance space,” Holub said. “This is our target … we just want to continue expanding and growing and increasing the adoption.”
No-code, simply put, is any tool or software that can be used by businesses to accomplish aims that would typically use detailed technology or software implementation, explained David Gritz (pictured immediately above), co-founder and managing director of InsurTech NY, a community-based group that brings together carriers, brokers investors and insurtech start-ups.
Chris Nichols (pictured immediately below), executive vice president of research and development at iPipeline, a provider of cloud-based business process software for the life insurance industry, has an even shorter definition.
“No code is a way to look at solving business needs with as little technology requirements as possible,” Nichols said. “You eliminate the heavy lifting on the development side.”
According to Gritz, some form of no-code has existed for years, seen in systems such as Adobe and other early computer tools that helped edit photos or illustrate without needing programming or software knowledge. There’s also been drag and drop functionality for quite some time in many systems, he noted. The idea then, and now, was for no-code to simplify business processes on a large scale.
Insurance has taken years to catch up to this because of how the industry breaks down, Gritz explained.
“Insurance as an industry is very much bifurcated by line of business and even type of process, so the easiest no-code solutions that could come into the space were not readily available,” Gritz said.
The difference now is that companies have become more customizable and powerful, Gritz noted, allowing for no-code to take hold.
“What that’s essentially allowed to happen is [for] an industry that’s very segmented and distributed, it’s cost effective enough for a no-code solution vendor to build versions of itself for different functions, whether it’s a claim function or a new submission function or an underwriting function,” Gritz said. “Or, [no-code companies] can build [their products] generic enough but have experts that understand these workflows to be able to work with insurance companies.”
Caribou Honig (pictured immediately below), a partner at SemperVirens Venture Capital (a CoverGo investor), said no-code works similar to Lego children’s building blocks.
“If you think about it … everything it takes to make insurance happen from the technology perspective … they are a bunch of little modules there – little Lego building blocks that come in different shapes and sizes and colors. Ultimately, they’re getting assembled,” Honig said. “A developer – if you want to create a new Lego block … you create that ultimately, but once it’s been created, do you really need the developer to assemble them into the end-vision product experience process? The no-code view is you don’t have to.”
Honig said you would need those Lego blocks to exist and some way to access each one in terms of connectors. That is possible through the use of APIs, or application programming interfaces, that help establish procedures for carrying out programming tasks. Importantly, he said, APIs are helping no-code software platforms take off.
“We’re seeing that materialize,” he said. “The API-ification is essentially the wrapping of Lego blocks into an API, into a module that these no-code platforms can then start to grab through the API – the Lego blocks and the toolsets for non-software engineers or non-developers to put them together.”
The no-code approach has worked so far for iPipeline, whose SaaS-based products and services are designed to accelerate and simplify insurance sales, compliance, operations and support.
Nichols said the no-code mojo comes into play during an integration with the company’s technology.
“Historically, that’s a development process [where] you would have the two sides sit down and do the specifications and then code to that solution,” he said. “We have an integration layer or integration tool that allows a business analyst to come in and just select the fields … to be set or return from a request and integrate that into the workflow without having any development background at all.”
Other no-code uses for iPipeline have focused on building workflows and e-applications. Nichols said he sees no-code more often now in insurance, due to multiple needs.
“You’re looking for economies … faster implementation times … more flexibility and more cost-effective solutions,” Nichols said.
Diego Devalle (pictured immediately above), Guidewire’s chief product development officer, said the company has been on its way toward no-code since launching its initial platform in early 2000.
“From the very get-go the exposure of how much code was needed was reduced,” he said. “That created the initial success of Guidewire.”
Of course, reduced coding doesn’t mean no coding at all. Devalle said that part of Guidewire’s software was no-code years ago but increasing industry standards for no-code mean the company has continued to adapt to stay head.
“What was low-code 15 years ago, with the industry evolving, became something that wasn’t. It was not enough to cover the full stack,” Devalle said. “The industry evolved and our capability to continue to reduce the code exposure has been our continuous quest across the years.”
The benefits of no-code software are self-evident, Devalle said, especially the idea that you “could create and launch products more effectively and faster.”
Gritz at InsurTech NY said he’s seen no-code used positively in the insurance industry in a number of ways, such as to help speed new product launches. Claims technology is also increasingly drawing no-code approaches, he said, because money-saving potential in what can be a cost-sensitive process offers “a very clear” return on investment.
Honig added that no-code is beneficial because it takes a middle person out of the programming mix.
“Instead of product managers taking what’s in their heads, putting it into a Word document of user requirements, which a developer than reads and turns into code like we all know creates garble …. The product manager instead goes into the no-code platform interface and just starts creating it according to their vision. Like, ‘why describe it in prose when I can just make it like that’ is so much more valuable.”
Holub, at CoverGo, sided with the faster development time, asserting that applying no-code can cut product development time by 99%, versus 12 months to build some insurance software products.
Legacy systems can also be far more rigid and harder from which to make major software changes, Holub argued.
“No-code companies can just go and make changes very fast,” he said.
Risks abound, however. Guidewire’s Devalle said a no-code solution may not sort all the complexity of a company’s given software stack.
“Typically, no-code solutions tend to cover, let’s say, 80% of the most common use cases, so you [have to] build capability,” DeValle said.
Gritz offered a similar sentiment, noting that carriers face risks picking a no-code platform too generic to fit their needs, making it necessary to bring in expensive experts to make up the shortfall.
It could be “no different than a programming exercise except instead of having your developers work on it, you’re having highly paid consultants at the no-code platform,” he said.
Another potential problem is that a no-code platform may not meet a carrier’s requirements for information security.
“If a no-code platform is not at your [security] level …there’s risk from a data privacy perspective. There’s risk from a hacking perspective, and there’s risk that it’s not meeting your company’s governance [requirements],” Gritz said.
According to iPipeline’s Nichols, however, risks that no-code software ends up being too generic for a client are imminently easy to solve.
“A risk with a pure no-code play is that you have to create everything from the ground up, or you need to do something you can’t do,” Nichols said. “You might be able to do 90% of the solution with no-code. But if there is a complex situation or if there is a need that hasn’t been identified, we do have the ability to use a new patch to accomplish that with true coding.”
Nichols also wasn’t too worried about cyber security risks because they exist regardless of the software situation.
“We certainly have processes in place that check things as the product is built,” he said. “We take a pretty hard stance on our penetration testing and evaluation of products before they go live.”
While insurance is more receptive to no-code than it used to be, predictions of how its use will evolve run the gamut.
Gritz predicts no-code will catch on gradually.
“No-code insurance will be the bridge between the page systems,” Gritz said. “The package systems eventually will replace all legacy systems in some form or fashion, and no-code is going to basically be the lubricant and the gears to fill in those pieces until they can be replaced by package systems.”
Or, Gritz added, no-code software might be used for specialty areas with which it works well, such as workflow.
Honig believes no-code in five years could either be a disaster or a moderate success.
“Either it didn’t work from a technology and flexibility perspective, … or you end up with not a winner take all [situation] but you have a couple major no-code platforms used in the industry,” Honig said. “You end up having 40% to 50% of the insurance companies out there using no-code for at least some portion of their” processes.
Devalle, Guidewire’s chief product development officer, said he views the march to pure no-code as getting closer.
“The coverage of what you could fulfill with low-code solutions is going to definitely increase to a point … in which 70% of the insurance product lines or business days could be covered by low-code or almost zero-code,” he said. “It depends if there is a benefit in investing to go this last mile, or if it is way more effective to simply keep code.”
Pointing to research from Gartner and elsewhere, Holub said he expects no-code software development to be widespread, with most insurance companies widely adopting the practice.
“We see … no-code and low-code as the future for the insurance industry and insurance systems, products, workflows, rules - everything that will be built in the insurance industry,” Holub said.