COVID is forcing this tech conversation among carriers’ senior management

Disruptions from the COVID-19 pandemic are putting digital transformation and new product launches high on the agenda of insurance carrier executives, the CEO of a property and casualty insurance software vendor suggests.

“When we look at the impact on carriers of COVID, it impacted some segments of business or some lines within the industry,” said Michael Jackowski, CEO of Duck Creek Technologies Inc., during an earnings call last week. “But I think at large, it has created a more important agenda with C-level executives in the boardroom around digital transformation as they are trying to react with trying to manage work-from-home employees, remote employees as well as more self-service with their customers. We think that trend is going to continue.”

An analyst asked Duck Creek officials about the insurance software vendor’s “pipeline” of customer deals. Jackowski suggested the company’s pipeline of deals has strengthened from quarter to quarter since COVID-19 was declared a pandemic in early 2020.

“It is forcing new conversations within the C-suites of [carriers] not only about being digital but … of launching new products and looking at customer needs and how they react to the current market,” said Jackowski.

“On the commercial side, it is called a hard market and a hard market means that carriers are taking more rate and increasing their prices,” he continued. “And when they do that, they have to be more surgical, if you will, around how they price their products. Are they going to go after a certain segment of the market very differently? When they have to get more surgical, they know they need better technology.”

A key point for Jackowski is that P&C insurers are increasingly recognizing the benefits of policy, billing and claims systems based on software-as-a-service as opposed to on-premise software.

Boston-based Duck Creek launched an initial public offering of stock in August 2020. Duck Creek makes software for policy administration, claims and support for payment billing and collections, commission processing, disbursement management and general ledger capabilities.

“Changing consumer preferences and heightened service expectations demand that carriers innovate faster and provide a compelling digital experience,” Jackowski said during the call. “At the same time, carriers must also manage complex insurance products, unique carrier-specific business rules and the highly regulated nature of the P&C industry.”

Duck Creek reported that it made US$58.9 million in revenue for the quarter ending Nov. 30, 2020. Of that, US$27.9 million was from subscriptions to Duck Creek’s software-as-a-service offering (as opposed to revenue from software installed on carriers’ premises).

Its net loss for the quarter was US$4.7 million.

Feature image via iStock.com/Olivier Le Moal