Roadmap Challenges

The many challenges faced by insurers in their digitalization roadmap all boil down to the same thing. There is an urgent need for absorbing new business requirements and customer expectations more rapidly, while coping with the increasing scarcity in the technically skilled resources needed to implement the digitalization roadmap.

Low-code platforms aim to solve this incongruity, by providing a development approach that enables developers to deliver changes with a 4.6X productivity gain over traditional programming. They achieve this by offering developers a way to build applications visually, simply by drag- and dropping building blocks onto the screen. Low-code platforms come with a broad set of components (or building blocks) allowing developers to shape user interfaces, build business processes & workflows, configure business rules, design data stores and integrate with existing back-ends or third party services. All this without the need to write a single line of code.

Low-Code Market Trends

We see more and more insurers making the switch from traditional development to low-code, and this trend is expected to continue. Gartner predicts that 65% of all application development will be performed with low-code by 2024. In terms of market size, Forrester is expecting the low-code market to expand up to $21.2 billion by 2022. Statista is anticipating further growth in the next upcoming years, up to $47.31 billion in 2025 and $65.15 billion in 2027.

Even big tech is showing a growing interest in this promising technology. Last year Google announced the acquisition of AppSheet, a low-code mobile application platform, as a strategic play to integrate low-code capabilities into Google Cloud. Another big tech player, Amazon, has recently launched Honeycode to enable cloud-native low-code application development on AWS. But even though large investments are being made by cloud hyper-scalers, the low-code market is actually dominated by two smaller players who managed to successfully exploit their first-mover advantage. These two leading players are OutSystems and Mendix, of which the latter was acquired by Siemens in the summer of 2018. Microsoft is a strong runner-up, with its Azure based low-code platform PowerApps.

Low-Code in Insurance

On both the Belgian and Dutch insurance markets, thewave is noticing an increasing interest in low-code technology as well. At the time of writing, two of our Belgian insurance clients are in active negotiations with leading low-code vendors. Our consultants are receiving an increasing amount of requests for advisory work related to the adoption of low-code. We are currently advising several of our clients on how they can implement a low-code operating model, how to strategically position low-code as enabler for the modernization layer and how to reap the most benefits from low-code platforms.

In the Netherlands, several insurers have already adopted low-code. Dutch insurer Heilbron Groep for instance, is accelerating its quote-to-bind process using the OutSystems low-code platform. VGA is adopting Mendix for its digital claims portal, while TVM has recently announced it will be using Mendix to help 200 fleet managers process their damage claims more effectively.

In Belgium, a market known to walk in the footsteps of The Netherlands in terms of technology and innovation, OutSystems is establishing strategic partnerships with IT service providers to strengthen their position in the local insurance market. Meanwhile, MS Amlin has selected Mendix for its new digital SME insurance initiative which will initially launch in Belgium, The Netherlands, UK and France.

Benefits of Low-Code

It’s easy to understand why so many insurers are making the move towards low-code. These platforms greatly reduce the learning curve for developers. Case studies show that inexperienced low-code developers can become productive with these platforms in a mere 3 weeks. The visual approach to software development simplifies the onboarding process for new developers onto existing projects, making project staffing and resource allocations more flexible.

Low-code also eliminates the need for large heterogeneous teams. These platforms are designed with meticulous care for intuitiveness so that all layers of software engineering can be mastered by a single developer. This reduces the overhead of cross-technical alignment and makes implementation projects easier to manage.

In addition, modern low code platforms are a one-stop-shop for enabling a true DevOps approach to software development. Once an application is deployed to the test environment, stakeholders can provide immediate feedback from within the application itself. This allows organizations to test and release new business solutions fast while minimizing the hidden costs imposed by the late detection of critical defects. In general, these platforms tend to increase the effectiveness of software quality teams as well.

Any Objections?

While the business case for low-code is quite clear, these platforms still face a certain level of healthy skepticism from the different types of stakeholders involved. Especially from those who have not yet seen such platforms in action themselves. Developers are often worried that the visual approach to development will introduce trade-offs in terms of flexibility and control. However, we see that most low-code platforms are open and modular by design, allowing developers to extend and customize any component within all layers of the platform. Where needed, developers can still choose to dive into coding and write their own building blocks from scratch. In a sense, one could state that low-code platforms merely aim to reduce the amount of boilerplate code like many other modern programming languages. But low-code takes the definition of boilerplate code, and that of reusability, to the extreme.

Enterprise architects are concerned with the fact that enterprise applications rarely stand on their own. Business solutions often have to integrate with various external data sources and processes in order to offer a consistent end-to-end experience. Luckily, most low-code platforms offer a broad range of connectors that easily plug into any existing business process, or can replicate data to or from any type of data store.

IT Leadership, on the other hand, is concerned with any vendor lock-in situation these platforms may introduce. This is an important consideration in the vendor selection process indeed, as some low-code vendors provide more flexibility than others in this regard.

Eager to Start?

Want to learn more about what low-code can mean to your organization? Reach out to TheWave to discuss your options and how to best get started.