Duck Creek Technologies explores the unique requirements of the global specialty re/insurance sector when it comes to innovating the most market-relevant products
The new standard in property and casualty insurance is spreading to every corner of the global specialty re/insurance market, and those embracing change are leading the way in terms of their ability to innovate new products and connect with their customers and markets.
Re/insurers we speak to are often looking towards the long-term removal of legacy systems from across their operations and replacing them with capable and unified upgrades. However, they grapple with exactly how to achieve this, particularly when – as a result of business evolution and expansion – many global entities find themselves using different systems to operate in different regions or countries.
The key business drivers behind upgrading and unifying these systems are often centred around seeking to improve underwriting support, manage costs, improve service offerings for producing brokers, and improving product offerings – all with the upshot of fuelling profitable growth.
For specialty re/insurers, which provide solutions for brokers and clients with complex insurance needs across a diverse range of sectors and geographies, many have assumed that there is no “one size fits all” approach. However, low-code, highly flexible applications and technical architectures can provide all this, and also offer the scalability to handle multi-geography projects and functional requirements.
Can specialty insurers become product factories?
Take the evolution of a re/insurer’s product offering as an example. Having a diverse and complex risk appetite and operating across territories often means that specialty re/insurers have a huge range of products in their systems.
By harnessing systems architecture that allows for product packaging and a modular product approach, as well as accommodating regional variations, re/insurers can also quickly and effectively create new, market-relevant products, reusing common product definitions across their portfolios.
Using standardised definitions in a low-code environment allows for tailored coverages without creating a massive library of products that are expensive and time-consuming to maintain. Taking this approach leads to vastly improved efficiency and sets a new standard for innovation and speed to market.
The step-change that the product factory concept offers to these re/insurers is the opportunity to establish a set of base products which are used as the foundation for product variations in order to tailor coverage for specific market needs.
Product inheritance is the ability to define an item, for example at a country level, that can then be used across lines of business and even coverages. By defining the item at that country level, any changes made to that item are automatically inherited by the line of business and coverage level unless the definition is overridden to break inheritance.
Achieving seamless product tailoring combined with regulatory compliance globally and locally: with the product factory approach, insurers gain the ability to define and maintain a robust inheritance model that supports the reuse of common elements and definitions across products.
Re/insurers we work with have reported lower operating costs by grouping products by commonality in order to market them more efficiently, with some able to dramatically cut costs and delivery times – in one instance by 75%.
Specialist knowledge is key
Taking the decision to adopt this kind of architecture is a big step for many, and having a trusted technology partner is critical. Re/insurers we speak to are looking for proven experience in commercial and specialty lines markets from their core technology provider – quite simply, they need to “get it.”
This, combined with a well-established value-add ecosystem of software and implementation partners that can plug in to solve specific challenges such as identifying claims fraud patterns, will help them meet the changing needs of the market now and into the future.
Re/insurers already know that better services and products, combined with ease of use and greater overall efficiencies directly align with better and closer knowledge of clients. We are here to help join it all up in one trusted, transparent, and scalable system.
For further reading download our Outcome Brief – Building a Product Factory.