Product Configurator vs. Hard-Coded Rules

For insurers seeking a competitive edge, traditional methods of product development no longer work. This change raises an important question: should carriers use modern product configurators or continue with hard-coded rules that are becoming outdated?

This comparison highlights why the flexibility of product configurators surpasses the limits of legacy code.

The Constraints of the Code Era: When Hard-Coded Rules Stifle Innovation

For decades, insurance companies relied on hard-coded rules for their core systems. Developers carefully programmed every product, rate, and underwriting guideline into the application’s source code. While this approach seemed strong and reliable at the time, it has turned into a major drawback in today’s market. The main problem is a lack of flexibility in product customization. Any small change to a product - like adjusting a premium, adding new features or accessories, or complying with new regulations - required a complicated customization process involving IT, code changes, thorough testing, and deployment. This is not only time-consuming but also costly and risky due to potential new bugs affecting manufacturing processes.

As a result, bringing new or updated custom products to market took months or even quarters. In a world where agile competitors respond to market demands in weeks, these delays are unacceptable. Additionally, hard-coded rules build a communication barrier between business and IT departments. Product analysts, actuaries, and business managers - those who understand customer preferences and specific needs best - had to convert their strategic ideas into technical specs.

This often led to misunderstandings and resulted in products that didn’t fully meet the original business goals. Over time, maintaining and improving these systems became increasingly complex as "spaghetti code" made each modification more difficult and riskier, hampering the manufacturing and sales process.

The No-Code Revolution: How Product Configurators Are Changing the Game

To tackle these challenges, product configurators have emerged as transformative software solutions. These platforms shift the power to create and modify insurance products from IT departments to business users. With a no-code or low-code model, these tools offer an easy-to-use interface that allows non-technical staff to define product logic, rates, underwriting rules, and sales processes without writing any code.

Democratizing Product Development: The main advantage of product configurators is that they return product control to domain experts. Actuaries can independently model complex rating algorithms, product managers can create new variations and bundles in real time, and underwriters can define and adjust risk assessment rules as needed. This removes IT bottlenecks and significantly shortens the product configuration process.

Unlocking Agility and Speed: Changes that once took months can now happen in days or even hours. This new agility lets insurers respond quickly to market trends, competitor moves, and regulatory changes. The ability to rapidly test new product ideas and concepts - to "fail fast" - reduces risk and allows for better resource management.

Enabling Mass Personalization: A product configurator enables insurers to offer highly personalized policies tailored to individual customer needs. Rather than providing a limited selection of one-size-fits-all products, insurers can create flexible packages where customers can choose their own coverage limits, deductibles, and optional features. This not only enhances the attractiveness of the offerings but also increases customer satisfaction by delivering genuinely customized products.

Ensuring Transparency and Compliance: Centralizing all product logic within a configurator improves transparency and simplifies compliance management. All rules are clearly defined, easily accessible, and version-controlled, which streamlines audits and lowers the risk of regulatory issues. Versioning capabilities create a clear record of all changes, making it possible to revert to prior versions if necessary.

Integration with Insurance Core Systems

A modern product configurator is not an isolated tool; it serves as the central nervous system of an insurer's IT ecosystem. Its true strength comes from seamless integration with important enterprise systems. Using standard APIs, the configurator links to the core policy administration system, providing it with complete product definitions and premium calculation rules in real time.

At the same time, it connects with sales portals for agents and customers, CRM platforms for managing relationships, and external data sources like demographic databases or risk assessment services. This setup ensures product consistency across all distribution channels and removes the need to manually enter information in multiple locations.

Consequently, a change made once in the configurator, such as a new discount, is instantly available and accurately calculated in every system, from the customer's mobile app to the underwriter's desktop software.

Higson by Decerto: An Example of a Next-Generation Product Configurator

Among the available solutions, the Higson product configurator software from Decerto stands out. It was designed specifically for the complex needs of the insurance industry. Higson is notable for its ultra-fast calculation engine, which can process complex rating logic in milliseconds, and its user-friendly interface tailored for business users. It provides actuaries and product managers with complete control over defining even intricate product logic - from premium calculations and dynamic pricing to agent commissions and underwriting rules.

Higson also supports product versioning and the creation of variations for different sales channels or customer segments within one unified setup. This reduces redundancy and greatly simplifies the product portfolio. Implementing a tool like Higson allows insurers to significantly shorten their time-to-market, cut operational costs, and most importantly, regain full control over their product offerings.

Practical Applications in the Insurance Industry

Insurance Carriers

For insurance carriers, product configurator software streamlines customization and boosts customer satisfaction by allowing the creation of tailored insurance products. Carriers can quickly adjust to changing regulations and market demands by modifying product options and features in real time. This flexibility helps develop personalized products that meet the specific needs of various customer segments across various industries. The interactive nature of configurators enables carriers to provide immediate real time visual representation of the final product directly to potential customers, helping them make informed decisions and enhancing the overall ordering process.

Managing General Agents (MGAs)

MGAs benefit from product configurators by being able to launch and modify insurance products quickly, without heavy IT involvement. This scalability allows MGAs to react swiftly to niche markets and emerging trends. They can easily tailor product options, coverage features, and pricing models to match brand strategies and customer needs. The configurator's software also integrates with processes related to policy administration and underwriting, streamlining manufacturing processes and reducing errors. By equipping MGAs with these tools, the insurance ecosystem becomes more agile and customer-focused, encouraging active participants in the sales process.

A Strategic Shift in Mindset

The move from hard-coded rules to a flexible product configurator is not just about upgrading technology; it represents a fundamental strategic change. It shifts from a model where technology determines business capabilities to one where the business, equipped with the right tools, shapes its own technological future. For modern insurers, investing in product configurator software is essential. It serves as the basis for a digital future characterized by agility, innovation, and a true focus on the customer.

In this era of digital change, companies that hold onto outdated, rigid systems risk falling behind competitors who have embraced the potential of modern configuration tools. The choice is clear: adapt and succeed, or face stagnation and decline.

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