Digital disruption is a significant threat to insurance companies, many of whom are struggling to retain increasingly “switchy” customers. Eduardo Romano, CIO of Liberty Seguros, shares how using low-code to transform IT delivery keeps this leading Portuguese insurer ahead in the race for customers’ hearts and minds.

A Disclosure: We Rely on OutSystems

Before I start, I should perhaps disclose that Liberty Seguros has been an OutSystems customer since 2004. While that naturally colors what I have to say, hopefully, our 14 years of experience and lessons learned will be useful for readers who are at an earlier stage of their low-code journey.

Digital Disruption of the Insurance Industry

It shouldn’t be a huge stretch for you to imagine how digital disruption is affecting the insurance market. After all, you are probably a customer of several insurance companies.

Disruption, both digital and demographic, is genuinely affecting the insurance industry. Nowadays, consumers can quickly survey the market via aggregator and price comparison sites. Moreover, younger consumers expect the same frictionless transaction experience from their insurance provider that they get from B2C sites like Amazon.

  • Digital, mobile, and IoT trends raise a range of insurance innovation opportunities. Here are just a few:
  • Mobile apps that streamline customer interactions
  • Digital interactions, including web chat and chatbots
  • Connected car and home
  • The need to glue such diverse interaction options into consistent omnichannel experiences
  • Usage-based insurance such as car-black-box monitoring.

Another consequence of these shifting dynamics is the desire to increase the stickiness of customer relationships, with the provision of more value-add and advisory services alongside traditional insurance offerings.

I’m not bemoaning what comes with this territory, but it is fair to say there’s no shortage of things to do for insurance CIOs and their teams. I can easily envision the insurance industry being on the minds of the Forrester researchers who first wrote about “The Age of the Customer.”

Serving Our Customers

Now that you know how digital disruption is affecting the insurance industry in general, let me tell you a little about how Liberty works with its customers and how my IT team supports that endeavor.

The first thing to mention is that Liberty Seguros has an indirect business model. We serve nearly 1 million customers through a network of over 1,500 professional insurance agents. When you do the math, you quickly realize that many of these agents (or brokers) are comparatively small businesses, serving on average fewer than 600 customers each.

Many of these brokers are small family businesses, often employing as few as 2 or 3 people. Back in 2004 when I joined Liberty, we had 3,000 brokers. However, over the past 14-years, there has been a tremendous degree of consolidation, resulting in fewer larger brokers, many of which have multiple branches.

In part, this consolidation is a consequence of online business models. Based on what I said before about the rise of price comparison sites, you might assume that brokers are a dying breed. However, in Portugal, the indirect broker business model remains popular with consumers. Many families have long and established relationships with their brokers, and price comparison websites have not yet taken off to the extent that they have in places like the UK and USA.

Nevertheless, it's fair to say that brokers, especially the smallest ones, have the threat of digital disruption hanging over their heads. Moreover, being small businesses, their ability to develop innovative digital countermeasures to such disruption is pretty much nil!

Our Innovative Business Model

I've painted a pretty bleak picture. We're in an industry that is dramatically affected by digital disruption, and we've hitched our wagon to a mom-and-pop distribution channel that is defenseless against such disruption. Welcome to my world.

The final piece of the jigsaw that I had better mention is that our brokers are “untied.” In other words, they are entirely independent and free to select insurance products from any provider. Indeed, they should only offer Liberty products to customers for whom they are the best fit and value.

You might be wondering if this is an innovative business model or an impossible one?

Well, I’m proud to report it’s a successful business model, and we remain committed to its success. Liberty has a growing share in a static market. In fact, we’re growing at about three times the rate of our industry peers.

Digital innovation, much of it powered by the OutSystems low-code platform, is central to this success and has been since we first started working with OutSystems back in 2004.

Service Excellence

Given what I've described above, the route to success is customer and broker service excellence. With brokers free to work with whichever insurer they prefer, all of us at Liberty have to be at the top of our game.

We like to think customer service excellence is in our DNA. It permeates our whole company culture, and we continually strive to be the easiest and most pleasant insurance company to deal with. However, attitude and culture cannot deliver unless they're backed-up with excellent systems that provide frictionless collaboration between Liberty and its brokers, which in turn means a great experience for end-customers.

This, then, is the role of my team at Liberty and sets the scene for why low-code is front-and-center in our systems of engagement.

Simply put, OutSystems helps us get to market sooner, and consistently delight our brokers and customers with brilliant experiences that work on any device.

What Led Us to Low-Code?

Back in 2004 when I joined Liberty Seguros as CIO, the company had just been acquired by Liberty Mutual. Previously it had been a European subsidiary of Credit Suisse Group. We had a considerable backlog of IT development that would have taken the team two years or more to deliver. Such a backlog was a real barrier to improving customer experience, so we went looking for a rapid application development toolset. Back in these days, the term "low-code" was yet to be coined, and cloud computing was in its infancy, AWS wouldn’t be publicly available for another couple of years.

It wasn't long before we found OutSystems, and three things about it got us excited:

  • Model-based development, which would accelerate and standardize development, as well as lower the learning curve for developers.
  • One-click deployment, which would speed up delivery and reduce IT operations overhead.
  • The ability to stay in the .NET camp and even incorporate our own code.

An Ambitious Start

Looking back, I think the most important decision about our early adoption of OutSystems was to take it seriously. You might say our two-year backlog put us between a rock and a hard place. But the simple truth was, if we were going to get on top of the backlog and quickly improve the customer experience, we could not afford only to use low-code for lightweight, internal applications. We needed low-code to become the standard approach for strategic, customer-facing systems as well.

So, right from the outset, we made a big commitment to train multiple developers and establish governance standards that would prevent this new approach dissipating into chaos.

The very first application we developed illustrates just how seriously we committed ourselves to this new approach.

Our First App

Today you can find plenty of guidance for choosing your first low-code app. I think it’s fair to say that we strayed about as far away from conventional wisdom as one can get.

  • Would you choose an app used by third parties, including consultants and clinicians in hospitals and doctors surgeries?
  • Would you want to handle sensitive, personal, and medical customer data?
  • Would you choose to integrate such a system with multiple systems that serve different insurance lines, such as car, personal, household and employer policies?

On the other hand, choosing an application that provides significant benefits for customers, including the quality control of post-accident medical treatments, set a very high bar. The success of this project got everyone's attention and guaranteed us significant C-level support for future low-code investment.

What we delivered enabled Liberty to raise the standard for post-accident medical care for our policyholders. Treatment programs could be overseen by our own clinical experts to ensure the efficacy and cost-effectiveness of all treatment programs. That application is still in use today, although it has been enhanced several times over the past 14 years.

Of course, you might not want to take on so much risk on your first project. But, I do advocate selecting a project that will significantly “move the dial,” in terms of kudos and executive support when it is a success.

From First App to Low-Code Factory

You can read a brief history of our 14 years of experience with OutSystems in the case study that you’ll find here. However, one of the reasons I was keen to contribute to the OutSystems blog is that one case study can only itemize a few landmarks on such a long journey.

I hope this article adds a little more business context to what we now call our “low-code factory” and how low-code supports the digital innovation needed to keep ourselves, and our 1,500 brokers, at the top of their game in an increasingly digital age.

In future articles, I look forward to sharing more of our experiences, including details on some of the 83 applications we've built, the evolution of our agile application development approach (which would not have been possible without low-code), and details of how our low-code factory of 29 developers operates.

Thanks for reading and if you have questions or suggestions for future articles, you’re welcome to contact me via Twitter @EduardoRomano.