Insurance product development: How to build insurtech?

Software applications fill all spheres of our modern life, inevitably. They help in booking tickets and accommodation, accompany in watching sports, and facilitate learning foreign languages. More than ever, apps enhance business performance because they automate numerous manual tasks and increase revenue greatly. Among others, insurance product development becomes essential for various underwriters, agencies, and ordinary users.

Further in this article, we will cover basic stuff like software types and development cycles as well as more advanced things related to health insurance product development stages and advantages. Don’t miss the last part, where we briefly answer the most popular questions. Let’s go!

Understanding software types and SDLC

Before we move to insurance systems and insurtech approaches, you want to know how software differs and how developers create it, basically. Without diving too much into tech debris, let’s find out the differences between the main categories.

As an entrepreneur, you have two basic types to order: a ready-made one and a custom one. Both of them have pros and cons, so at the end of the day, you should choose a system which meets your requirements better. Here are a few primary features of both types:

1. Ready-made. Preprogrammed applications come with fixed sets of functions and with low customization opportunities. They will be good for traditional businesses but rarely meet the requirements of very small (due to extra unnecessary tools) or too large corporations (due to low uniqueness).
2. Custom. Software programs that are made from scratch for each customer. Developers can add any desired module to meet all needs. Custom apps are perfectly customizable and more profitable in the long run, but they require a good vision of your company’s goals. However, developers can help with this task thanks to BI options.

Regardless of the chosen option, applications go all the way through the software development life cycle or SDLC. Long story short, this term means the entire development framework, which starts with the first product sketches and ends in the maintenance stage. But actually, SDLC is continuous and endless because apps require constant support with regular updates. The life cycle acts as a general plan or structure of software creation.

There are a few SDLC models suitable for different partnership patterns between software authors and their customers:

• Agile. It is based on 2-week periods with different tasks for each. The model provides for continuous development, which begins with an MVP and then adds more functions to the product regularly. Plus, a client can leave feedback during each sprint.
• Big Bang. Big Bang is all about no feature requirements as clients don’t realize which software they want to get. Hence, developers should define their own vision as they create apps. The Big Bang model works fine for small projects and experiments.
• Spiral. Being similar to the previous model, this one also features several iterations. However, they’re combined in a bigger spiral cycle, so each stage has a few levels (e.g. MVP I, MVP II, MVP III, and so on).  
• Waterfall. It is one of the traditional models which are outdated now. It’s based on a comprehensive plan of all development stages which should be approved before the process starts. Thus, Waterfall is less flexible than other approaches.

To discover how our company works, read about software development phases

Insurance product development best practices

Firstly, let’s talk about prepackaged or ready-made apps. We consider them as a viable alternative to bespoke solutions for all businesses which don’t require advanced tuning. If you have a small online insurance agency that works with individuals in a single given town somewhere in the USA, then you don’t need complex applications with multicurrency support or large catalogs for entities. Moreover, you want to get a basic piece of software for a moderate price ASAP, without waiting months while developers build apps from scratch.

Thus, packaged applications are wonderful as they include traditional modules, can be installed right off the bat, and, mainly, feature best practices. Generally, they are methods, processes, functions, and ideas tested and proven by numerous companies related to the target industry. This means that development teams build packaged software products on these approaches because the majority of users appreciate them.

Talking about insurance product development best practices, here are the most popular examples:

• Focus on UX/UI. Customers mean everything to underwriters, so applications should have personal accounts, be user-friendly, and deliver personalized offers.
• Create omnichannel platforms. By surrounding clients with native software both for web and mobile devices, you can optimize UX even more.
• Enhance security. As far as insurers deal with sensitive data such as bank credentials and IDs, high-end protection is required. Try biometric identification, maybe?
• Analyze big data. Add analytical tools to your software to simplify risk management, fight fraud, and deliver more individual offers with smart predictions.
• Reliability matters. Not only for the insurance industry but for all markets, reliable software increases the customers’ loyalty greatly.

Life insurance product development basics

While ready apps may be useful for some businesses, a lot of not-as-traditional companies will get more benefits from custom products. Thus, it’s better to know how your program is developed to be able to leave feedback or request some changes. Read through the next sections to educate yourself about insurtech systems, their advantages, and the stages of SDLC.

Key purposes of insurance product development life cycle

Generally, insurtech stands for insurance + technology, similar to fintech. This approach combines the core tasks of insurance companies with modern digital systems to create useful applications with tools for underwriters and insured persons or teams. A robust insurtech platform can boost your business significantly thanks to several features:

• Data at your fingertips. Modern databases keep standardized info available for all employees with corresponding access permissions. This means that staff members can easily get full information about any given client in seconds.
• Automated routine. Everything employees hate is now automated. Boring reports, schedules, payrolls, and tasks are handled by software, so workers can dedicate more time to interactions with customers.
• Next-gen engagement for users. Transparency is valuable now more than ever. Companies that create private accounts for their clients are rewarded with higher loyalty because users can control their policies, compare plans, and get more flexibility.

Strictly speaking, you can order any insurance software: accounting, HR, CRM, ERP, and more. Depending on the current objectives, insurers can ask for specific applications or purchase a complex one to cover all needs at once.

But not only offshore software development benefits are cool. Your understanding of the processes handled by developers is important, too.

Life insurance product development life cycle steps

By realizing how things work during SDLC, managers and stakeholders can improve their vision and modify requirements. Say, initially, a team of underwriters desired an all-in-one package with advanced catalogs and enterprise-grade accounting software. But after discussing plans with developers (step #1), exploring business analysis (step #2), and receiving an MVP with only basic tools (step #4), employees realized that they don’t need other costly extensions. As a result, this company was successful in getting higher ROI.

This means it’s always better to know about something rather than not. Keeping this statement in mind, let’s look at the insurance product development stages.  

1. Planning

The first phase is fully theoretical as it includes all the possible plans, estimations, and evaluations. During the planning stage, managers, stakeholders, key users from all the company’s departments, and developers discuss how the project will go on. Here, you should define the location of resources, the project scope and goals, schedules, budgets, requirements for the QA team, and potential risks. As a result, the first sketch will be ready.

2. Analyzing

Further, all the mentioned things must be discussed once again with in-house or external analysts. These experts can help if you don’t clearly understand the software requirements or market conditions. Results of analytical work are processed and concluded in the form of the SRS – Software Requirement Specification document, which will be the main guideline for developers. Agile teams may have several SRS samples for each iteration.

3. Designing

Using the mentioned requirements, product authors design an architecture, make prototypes and deploy them to show how they work. Developers focus on both high-level design with features, modules, and interfaces and on low-level one with databases, functional algorithms, and code itself. At the end of this step, clients get one or a few DDS – Design Document Specifications which describe the product in detail.  

4. Creating

The longest stage covers the health insurance product development itself. Coders use DDS as the guide and the chosen languages/frameworks as tools. Waterfall methodology doesn’t provide too many options for reviews and control on the client side, but Agile approaches are more flexible and allow you to leave feedback during each sprint. However, significant changes aren’t desirable during this process.

5. Testing

Modern SDLC models include small testing tasks for each step, but this conclusion is required, as well. Here, QA experts analyze the software performance, check code quality, and perform various tests focused on functional areas, integrations, security, etc. Developers then fix bugs or change modules and send the product back to the QA team for re-test. The next phase can begin only when the software complies with SRS papers fully.

6. Deployment

The most recent applications can be installed nearly instantly because of the high level of automation. If preparation measures were taken properly and no bugs were found, the deployment is a question of a formal launch, not more. To avoid issues, you want to install an MVP beforehand and look at how this basic product will work. Additionally, take care of data migration and keep core processes untouched during the launch.  

7. Maintenance

After the deployment, you can choose among various options:

• Refuse extra services. Thus, your in-house employees will be required to handle all updates, fixes, and enhancements.
• Get trial support. Here, developers will help with tech support and maintenance for a specific period, e.g. one week or one year.
• Get lifelong support. In this case, the development team will provide support and maintenance without limitations.
• Choose continuous development. The most advanced option includes various updates and upgrades in addition to tech support services.

Benefits of health insurance product development

Health insurance markets are quite popular and beneficial, especially in developed countries such as the USA and the UK. People tend to care about their health, so you, as a businessman, want to invest in innovative approaches to meet the needs of all customers. It’s simple as you can get high ROI from this money. To be sure that the industry is rising, check statistics about spending per enrollee in the US: for 2015, 2016, and 2026 (predicted). It’s clear that in ten years, the market will be 1.5 times bigger!

Keeping these insights in mind, let’s look at how insurance applications can boost businesses and how they’re useful to your unique tasks.

General reasons to invest in the insurance product development process

The basic advantages of software for insurance can be concluded to a few points:

• Save on time expenses
• Eliminate human errors
• Deliver accurate data     
• Maintain databases
• Generate regular reports

As a result, the company with implemented software cuts money expenses, too. By automating tasks, reducing errors, and optimizing clients’ experience, you can boost brand presence and popularity significantly.

Unique needs of your business

At the end of the day, the software is the most beneficial when it meets the business objectives fully. Let’s say an online insurance agency definitely should invest in email marketing and web-based tools for clients’ data processing, while brick-and-mortar offices would rather rely on telephony and in-person communication. The large insurance industry consists of numerous small, middle, and large corporations, each of which has unique requirements, so proper definition of your own needs is the key to success.

Consider outsourcing to Ukraine if you want to get a good balance between software price and quality.

FAQ

In the end, let’s quickly remind key parts of the guide related to insurance product development, choosing, and implementation.

Conclusions

If you need a solid custom insurtech system, we’re here to help you. With Agile ideas in mind, powerful development tools in our hands, and partner-oriented responsibility for the results, we deliver high-end insurance systems for underwriters, companies, and individuals. Apart from this industry, our experts also handle banking software development, and apps for the finance sector, construction companies, healthcare, travel, sports, e-commerce, manufacturing, and HR. Feel free to choose!