How Low-Code Platforms Can Ease The Pain of Managing Legacy Claims Systems
Legacy systems have long been blamed for contributing to sky-high expense ratios and poor customer satisfaction, but the advent of low-code solutions could be just the pill the insurance industry needs to get rid of the legacy headache and usher in a new era of streamlined and easy to use claims platforms.
The insurance industry is no stranger to the difficulties presented by legacy systems.
The issue is particularly acute for those companies that have grown through mergers and acquistions (M&A) and, along with acquiring new companies and businesses, have also acquired the legacy IT systems that come with them.
To view the webinar replay, visit: The Claims Evolution: How to Streamline Claims Without Burdening IT Departments
This creates a scenario where a company could be running a whole range of different IT systems across its various business units, some of which may be unable to effectively interface with the other systems within the business.
To change a policy administration system you are talking a 12 to 18 month project, maybe more, and the business can’t stand still while that project is running.
Peter Hughes knows this situation all too well in his role as group head of application development at Ardonagh Specialty, a company that is known for its activity in the M&A space.
“One of our biggest challenges [in integrating the businesses we acquired] was around aligning the policy administration systems,” he said while speaking on the panel at a recent Insider Engage webinar hosted in partnership with Mendix. “We had different entities using different solutions, or sometimes it was even the same system but a different version.
“To change a policy administration system you are talking a 12 to 18 month project, maybe more, and the business can’t stand still while that project is running.”
To combat this, Ardonagh turned to Mendix and its low-code platform solution that now sits above the broking group’s systems records to provide simple access for retrieving and updating information across the range of policy administration systems run by the broker.
Hillary Jarvis, managing director of claims for compliance and strategy at Markel, said that one of the appealing features of these low code solutions is that the user doesn’t need to be experienced coders to get the most out of the platform.
“I have different generations of staff who have learned to use these tools, and because on some level they can be drag and drop, what you're really doing is redesigning the process and figuring out how you can improve it,” she said “It is about thinking through conditional logic and not necessarily having to have hands on coding experience, which I find exciting.
What really stands out from a customer perspective is that when you develop a solution, you often have businesspeople involved that have no experience with coding.
“So you don't really need to, in my experience, be able to code for yourself to use these solutions, and sometimes I will just play with them [to think through a process].”
According to Paul Fondie, global industry principal for insurance at Mendix, there are usually two goals clients look for when implementing such a low-code platform – improving the speed to market and increasing cost effectiveness.
When it comes to speed, Fondie says it is all about creating a solution that is “tailored to that line of business” and able to make the process – whether that be anything from eFNOL to a case management tool – as fast as possible, both for the customer and the insurance company.
For cost effectiveness, it is all about ease of use.
“Where low-code can be used, it doesn't take as much skill for somebody in IT to learn low-code, as opposed to the hieroglyphics of traditional computer coding,” Fondie said.
He cited an example of a policy he recently renewed, with the renewal letter signed by a managing director that he knew had left the business two years ago.
Where low-code can be used, it doesn't take as much skill for somebody in IT to learn low-code, as opposed to the hieroglyphics of traditional computer coding.
When he enquired with a friend as to why the letter was still being signed by that person, he was told “it was too expensive to make the change in the current core system”.
If a low-code solution had been put in place, such a change, albeit somewhat of a trivial example, could have been made simply, effortlessly and at a very low cost to the business.
Hans Gijsbertsen, CEO of insurance low code solutions at Bonjoy, said that the simplicity of low-code solutions also means that you can get businesspeople who do not have an IT background much more involved in the development process.
“What really stands out from a customer perspective is that when you develop a solution, you often have businesspeople involved that have no experience with coding,” he said. “The benefit of low-code tools is that there are a lot of visualisations of the processes. So, with low-code you can have a workgroup with the majority made up of businesspeople just pointing out step by step, how the process goes, what type of data is being used, and how it should be leveraged.
“If you combine that with the fact that you can reuse components from one project to the next, you can see there are very valuable benefits of these type of technologies.”
It is about thinking through conditional logic and not necessarily having to have hands on coding experience, which I find exciting.
This reusability also means that low-code solutions can often be brought to market in much shorter timescales, with proof of concepts able to be completed in as little as one week.
“It will often take a lot longer [to get to market] with legacy solutions, because low code solutions can be built as a layer on top [of existing platforms], which is much faster,” Gijsbertsen said. “You can then add to this layer using templates or industry frameworks that are already being used, and that is a big win [for the insurance company].”
Such ‘big wins’ can help insurance companies to build on their legacy systems in a way that makes them easier to use, more efficient and more effective at interacting with other parts of the business.
Not only can this help to significantly shorten the delivery time and drive down operating costs, it also helps to create a much more seamless user journey that not only benefits the business, but also the customer.
A win-win all round, you might say.