How to Reduce Insurance Product Development Time and Cost

A new insurance product has two halves. There is the idea, which is where the value to the customer comes from, and there is the system that has to administer it once someone buys.

The second half is where most of the budget goes, and it is the half that decides how quickly the first one can change.

The State of Insurance in 2026: Key Trends and Statistics

Investment in insurance technology has picked up again. Gallagher Re reported $2.44 billion of global insurtech funding in Q2 2026, the highest quarterly total since Q2 2022, though large rounds accounted for much of it, so the headline is concentrated investment rather than uniform growth. Gallagher Re’s Q2 2026 report.

AI adoption has broadened faster than AI deployment. EIOPA’s February 2026 survey of 347 insurers across 25 countries found nearly two-thirds actively using generative AI, with most still at proof-of-concept stage. EIOPA’s generative AI survey.

The gap between those two facts is the practical problem. Plenty of capital and plenty of pilots, and a long way still to travel between a working idea and a product that customers can buy and the business can service.

Building Innovative Insurance Products: What You Need?

So you want to launch a new insurance product. What do you need?

Two things: the idea and the technology. The first creates value for the customer. The second decides whether you can deliver it, and how cheaply you can keep changing it.

The Idea

Good product ideas come from somewhere specific: a risk nobody is writing yet, a channel nobody is selling through, or an experience customers have stopped tolerating.

New risk classes are the clearest example right now. AI liability went from a coverage debate to an underwritten line during 2026. HSB, part of Munich Re, launched AI liability insurance for small and medium-sized businesses on 18 March 2026, covering bodily injury, property damage, and personal and advertising injury arising from a business’s use of AI, which general liability policies often exclude.

All types of businesses are using AI to do things more quickly and efficiently.

Timothy Zeilman, global head of product ownership, HSB

It is not an isolated launch. Testudo went to market in January 2026 with Gallagher Re and MIT, aimed at larger enterprises deploying generative AI. Armilla and Chaucer followed in February with a structure pairing cyber and technology E&O against a standalone AI liability policy. Three products, three different answers to the same question about who pays when a model gets it wrong.

That is what an emerging risk looks like from a product team’s side: the exposure is real, nobody has settled on the wording, and the first movers are learning from live claims.

Expanding Sales Channels: Selling Insurance in New Ways

A product does not always have to reinvent the coverage. Sometimes the breakthrough is in how it reaches the buyer.

Embedded insurance is the clearest case: cover offered inside a transaction the customer is already completing. Travel platforms at checkout, e-commerce warranties, usage-based cover in a rental app.

The scale is visible in carriers’ own reporting. Chubb told shareholders that more than 250 digital partners distribute through Chubb Studio, inside those partners’ own customer experiences rather than alongside them.

What customers want from that cover is more specific than “convenience”. Cover Genius and Gather surveyed 1,392 consumers across seven countries in 2026: 75% said they would buy more protection if payouts were automatic, and 71% said they would switch platform to get it.

Those are stated preferences rather than observed behaviour. But they point somewhere useful, because automatic payment is a product design decision, not a marketing one. It requires a defined trigger, a verified data source, and a servicing path that runs without a handler opening the file.

Using New Technology Inside the Product Itself

AI belongs in a product idea when it changes what the customer gets, not when it appears in the pitch.

The useful applications are narrow and specific: pricing that reflects how an asset is actually used, intake that reads a document instead of asking the customer to retype it, a claim that pays on a measured event rather than an assessment. Each of those changes the proposition. A chatbot bolted to the front of an unchanged process does not.

The test is whether removing the technology would change what you are selling. If it would not, it is a feature of the website rather than the product.

The Technology

A strong idea sets the direction. The system decides whether it can be delivered and, more importantly, how cheaply it can be changed afterwards.

That is where the first real constraints appear: time and cost.

The Hidden Complexity of Insurance Product Development

Insurance products are not standard software. They have to carry risk modelling, underwriting rules, claims handling, regulatory compliance, fraud controls, and financial records, all of which have to agree with each other on every transaction.

The layers add up. A wrong technology choice early shows up later as rewrites, reconciliation work, and a launch date that keeps moving.

Start with a Ready PAS and Customize It to Fit Your Workflows

Before committing to a multi-month custom insurance software development project, ask whether the application really needs to be built from the ground up.

Start by listing everything it must do. Look beyond the distinctive product idea and map the operations needed to support it:

• Capture applications and maintain customer records.
• Calculate premiums and apply underwriting rules.
• Route referrals and record decisions.
• Issue policies, process endorsements, and manage renewals.
• Generate documents and handle billing.
• Support claims and operational reporting.
• Connect with brokers, capacity providers, payment services, and existing systems.

In many projects, that requirements list describes a policy administration system with specialized products, integrations, and custom workflows.

Apply an 80/20 lens to the scope: if roughly 80% is familiar insurance operations and the remaining 20% creates your differentiation, starting with a customizable PAS deserves serious consideration. The split is a planning rule of thumb; your requirements assessment should establish the actual balance.

Openkoda supports this approach. It is a complete, highly customizable PAS with ready modules for insurance operations. Your implementation starts with working functionality that can be configured and extended around your business.

Example: Launching a Specialty Cyber Insurance Product

Imagine an MGA launching cyber insurance for small professional services firms.

The proposed application needs a tailored risk questionnaire, pricing based on business characteristics, referrals for submissions outside appetite, and an integration with an external cyber-risk data provider. Brokers need a branded submission journey, while the MGA needs policy servicing, billing, documents, and reporting to its capacity provider.

The specialist requirements are important. But they sit alongside a substantial amount of familiar insurance administration.

The Openkoda approach draws on its existing policy administration, distribution, and bordereaux reporting capabilities. The external cyber-risk connection would be a separately scoped integration.

This changes the project’s economics. A greenfield budget has to cover both the standard insurance functionality and the specialist proposition. Starting with a ready PAS leaves more of that budget for the product, the underwriting approach, and the distribution experience that actually distinguish the business.

It also changes what the team can review early. Underwriters and operations staff can work through a configured insurance journey and find gaps before those gaps become assumptions embedded in custom software.

How Cooperation with the Openkoda Team Works

The first step is to establish how much of your application Openkoda already supports, and exactly where customization is needed.

The Openkoda team includes experienced insurance technology professionals, with custom development services available for requirements beyond standard configuration.

A focused engagement follows five practical steps:

1. Map the product and operating model. Review coverages, rating, underwriting authority, servicing processes, distribution, and reporting obligations.
2. Assess the fit. Identify what is already available, what needs configuration, and what requires an extension or external integration.
3. Configure the PAS. Set up the product, forms, rules, workflows, documents, dashboards, and user roles.
4. Complete integrations and test the journey. Validate representative submissions, referrals, endorsements, billing events, and renewals with the people who will operate the system.
5. Deploy and refine. Launch the agreed scope, then use operational feedback to guide further changes.

Openkoda supports insurance product launches measured in weeks. A focused implementation can target around three weeks, with the schedule agreed during scoping. Extensive migration, complex integrations, or substantial bespoke development will affect that timeline.

The practical advantage is that the project begins with an operational PAS, so implementation concentrates on making it fit.

Openkoda’s Ready Modules and Functionalities

Openkoda provides ready insurance functionality that can be customized around your products and operations.

Five capabilities are particularly useful for shortening an implementation.

• Policy Administration: Manage quoting, binding, issuance, endorsements, renewals, and cancellations in one system. Configure policy records around your products, with transaction history and versioning that preserves the terms of existing business.
• Underwriting Workbench: Bring risk information, pricing, documents, and decision history into a configurable workspace. Set rules for straightforward approvals, referrals, and declines, and tailor the workbench to the information your underwriters need.
• Workflow Automation: Design processes that connect submissions, underwriting, approvals, documents, and policy issuance. Add conditions, payment checks, and scheduled reminders, then simulate the journey before activating it.
• Billing and Payments: Configure payment schedules, generate invoices, track collections, and automate reminders. Keep billing connected to policy records and support commission tracking without building a separate billing application.
• AI product configuration and reporting: The AI Product Builder drafts coverages, pricing, underwriting rules, and workflow changes from plain-language instructions, with human approval before anything is applied. Reporting AI lets teams ask questions about the book and returns results alongside the generated query.

Those capabilities sit on role-based access, audit trails, data isolation, and exportable configuration and data. Deployment is managed cloud or your own environment.

Plan selection matters: portals, multi-organization support, and certain integrations are Enterprise capabilities, while AI features use a separate subscription. The published plans distinguish these from scoped customization work.

Keep Improving the Product After Launch

The benefit of a customizable PAS continues once policies are being written.

Returning to the cyber MGA, suppose underwriting wants to add an optional coverage and move a referral threshold. The team drafts the supported changes in the AI Product Builder, inspects the proposed configuration, and approves the new product version.

Operations can revise the associated workflow at the same time, adding an approval step or requesting another document before issuance.

Reporting AI handles the other half, questions such as:

How many cyber submissions were referred this month, grouped by broker and referral reason?

Where those fields are captured, the report gives the team a starting point for reviewing submission quality or bottlenecks.

That is the cycle worth designing for: launch the product, watch how it performs, and make controlled changes in the same system.

Where This Approach Makes the Most Sense

Starting with a customizable PAS suits:

• Specialty insurers and MGAs introducing products with distinctive underwriting rules or servicing requirements.
• Carriers launching a new line that needs a dedicated workflow and distribution journey.
• Embedded insurance businesses connecting policy administration to partner websites or applications.
• Teams replacing spreadsheet-heavy processes with connected policy, billing, document, and reporting functionality.

A requirements assessment should also identify any essential capability that falls outside the PAS’s model. Those gaps decide whether targeted development is enough, or whether a broader custom build is justified.

Focus Development Effort on What Makes Your Product Different

Before commissioning a new insurance application, establish how much of it already exists in a modern PAS.

When the requirements center on policy administration with specialist workflows, starting from a configurable system reduces the amount of software you have to create and then maintain. It leaves your team more room for product design, underwriting, and distribution, and a shorter route to testing the proposition in the market.