Select the right technology for 2020

How insurance companies can select the right technology for 2020

By Martin Stewart : 2nd of December 2019

How can insurance companies select the right technology for 2020? How can they avoid spending on the wrong software and ensure their solution is one that’s supported for years to come?

Before you choose your next technology solution, let me give you some advice based on my own experience as a CTO and CIO in large enterprises, and some current trends I’m seeing in insurance software on the other side of the fence, as senior VP of technology and strategy of an insurance software vendor.

Be cautious with newer technology

New “hot” restaurants pop up in your local area and are busy for a while… until a new restaurant pops up and the first one loses its appeal. In my experience, it’s the same with technology. Soon the initial excitement wears off, technology advances rapidly, and suddenly the team behind it abandons it for the next big idea.

If you want proof of this, look no further than Thought Works’ Radar of the “hot” technologies which is updated every year. With each update, you’ll see plenty of new technologies emerging and also plenty of past favourites dropping out. Many major corporations invest a small fortune in the latest “hot” technologies and are then stuck with them forever, because it’s too hard to get a business case to replace them.

Fortunately, you don’t always have to go after the latest tech in order to get results.

A view of the future

I recently attended the Insurtech Connect conference in Las Vegas, along with around 8,000 people and over 200 exhibitors. While I was there, I learned about the current state of the market and gained some insights into insurance software trends and what’s to come.

Most of the newer software solutions are based around insurers’ need for brownfield solutions that work within their existing environment. It’s great to see more software companies tackling this challenge, but it’s important to be aware of their limitations before choosing any one solution.

1. Microservices

These have been a great success at Google, Netflix, and Amazon. But unlike insurers, these are massive organizations that have the large-scale teams and technology needed to support their rapid growth, and sometimes daily software changes.

Moving to a microservice architecture doesn’t make as much sense for insurers, they are not in a rapidly evolving business domain or experiencing massive growth. They are a relatively stable industry that needs solid, reliable systems, that deliver a good user experience, good economy, and at best need to update their products quarterly.

For Insurers, microservices can introduce a whole host of new problems:

Insurance companies could mitigate these problems by trying microservices across a few new functions (instead of the whole system). But I recommend that this be done very sparingly to avoid creating a more complicated IT landscape that’s harder to service.

2. Low-code; no-code

At the ITC conference, there were a lot of new Insurtechs promoting low or no code platforms that will (in theory) deliver productivity gains in IT delivery by reducing the coding needed.

The idea is that non-technical people can access the back end and make changes when needed. But in practice, it’s not that easy, because:

Don’t get me wrong; no-code solutions do have their place – they can be very useful for small scale systems, niche applications, running pilots, and start-up businesses. But if you choose a “simple to use” no-code platform that doesn’t fit the complexity of your business, you’ll likely end up bolstering the no-code components with layers of complex, expensive-to-maintain code.

3. Cloud-native and SaaS

The other trend I found at the ITC conference was more solutions hosted in the cloud – both SaaS and new cloud-native solutions. These are different concepts, but both take away the hassle of running your own data centre, give you the ability to scale up and down quickly, can dramatically reduce infrastructure costs and help shift your costs from CAPEX to OPEX. So, what are the differences?

SaaS services are great if you can find one that has the functionality you need, you don’t plan on major changes in the future, and you see no real business advantage in having your own tailored solution. But it can be hard to find a SaaS solution that closely matches your needs and fits with your existing systems (so you can avoid syncing and duplicate data issues).

On the other hand, cloud-native development is right at the other end of the spectrum to SaaS in complexity. It involves using an open source software stack to build a cloud-based solution that’s:

Cloud-native is best for elite development teams and businesses that really need the specific advantages it provides and are willing to build or assemble a completely new solution. Insurers need to ask themselves if they really need this level of flexibility and scalability. Because most aren’t ready to move everything over to a cloud-native and a microservices architecture.

Finding the right mix of technology solutions for insurers

So, what technology solutions are right for you? In my experience, most insurance companies will benefit from a mix, rather than a purist approach. Here’s why:

Instead, it makes sense to incorporate carefully selected elements from no-cloud, microservices, cloud-native, and SaaS while removing your worst systems and interfaces. This will help you get the bespoke solutions you need as quickly and affordably as possible.

Plus, you need to ensure your new are open directly to your customers and providers so you can quickly change your offering, launch new customer experiences and streamline your interaction with vendors

Whatever you choose, remember that the right technology is the one that works.

I may be biased, but if you’re looking for something that ticks all the right boxes, Axelerator may be worth a look. I wish it had been available when I was in your shoes.

With Axelerator, you get new technology that can slot in anywhere across Policy and Claims. It can start as a point solution (like a rating engine or new business quoting) that integrates with your existing solutions, or replace major elements, such as the Policy Admin system or the Claims system.

It’s a future-proof solution for insurers that want to get the job done sooner, and for less.


Whether you’re looking for an innovative platform to support business growth, you’re over capacity and need to outsource a project, or you’re in a jam and need a rapid solution, Axe is ready to support you.