(Mike Jackowski, CEO, Duck Creek Technologies. Source: Duck Creek.)
Duck Creek Technologies (Boston) is one of the greatest success stories in insurance core systems since its founding in the early 2000s. It made an important leap forward in 2016 when Apax Partners (London) acquired a 60 percent stake in the company, providing needed independence from former majority stakeholder Accenture. The company hit another milestone in June with a $230 million investment from Kayne Anderson Rudnick Investment Management (Los Angeles), Whale Rock Capital Management (Boston) and prior investors. Insurance Innovation Reporter saw this major infusion of capital, at a time when core systems are moving rapidly to a cloud-based platform paradigm, as an opportune moment to catch up with Duck Creek’s CEO Mike Jackowski.
Insurance Innovation Reporter: Duck Creek’s recent capital raise from new and existing vendors was one of the most interesting items of core insurance systems news in recent times. Could you tell us a little about how it came about?
Mike Jackowski, CEO, Duck Creek Technologies: It’s ultimately an expression of the strong momentum of the business. We made a tremendous effort to pivot the business to become a software-as-a-service [SaaS] provider when we carved out of Accenture through Apax Partners. We’ve gone on to establish ourselves as a SaaS leader in the P&C industry, resulting in tremendous adoption of our solution. We’ve enjoyed tremendous momentum from Tier-One carriers recently, the most recent being AIG’s adoption of Duck Creek as the standardized platform for the AIG 200 initiative. The Hartford recently announced that they had extended their relationship with AARP, and we’re delighted that Duck Creek was selected as the modernization platform for the work they’re doing on the personal lines side. We’re continuing to enjoy great momentum beyond Tier One as well, putting some more capital on the balance sheet and allowing us to continue investing in our growth.
IIR: What will the investment mean for Duck Creek in broad strategic terms?
MJ: The strategic significance is that it is allowing us to focus on three primary areas. One is just more organic investment in our overall SaaS platform. We are in a strong position to continue to extend our SaaS capability, making it more efficient and adding new add-on capabilities for our existing that customers that they can very quickly take advantage of—and that’s the beauty of SaaS: that carriers can so quickly take advantage of new features that we introduce into the platform.
The second broad area is international expansion. We know it’s a great opportunity and we’ve already proven ourselves in that regard. However, it is an area we know need to invest in more heavily to reach our potential success. Two weeks ago we announced that we went live in Ageas Portugal Group for policy and billing.
IIR: And since the Ageas Portugal announcement Duck Creek announced the appointment of Juan Antonio Costas as the new country manager for Iberia as a whole, working out of your Madrid office.
MJ: That’s right. It’s not just talk—we’re demonstrating the success of the product in international markets. We have presence in Europe, we have presence in Asia Pacific in Australia, and we’re looking to expand in both of those regions. Getting a customer live in Portugal was a big event for us. And you’ll see us continue our expansion efforts in continental Europe.
The third key area is M&A. We have track record of buying a number of companies, and in fact we have bought four companies in the last four years. We will continue to buy accretive technologies and capabilities to extend our SaaS product. We’re always on the lookout for useful capabilities, and we’ll continue to investigate InsurTechs and established players that can add value to the industry at large as well as to our customers.
IIR: How is Duck Creek seeking to position itself relative to its competitors? What strengths will you be investing in as differentiators?
MJ: I think our greatest differentiator is our lead in SaaS. Our vision a full-on SaaS platform that is continuously updated and steering away from very large, complex time-consuming, costly upgrades. That is the direction we’re taking the overall business. We’ve been operating in a SaaS mode for seven years. We’ve been investing in the SaaS version of our product—Duck Creek OnDemand—quite extensively over the last five years, which think gives us a natural lead in that space.
A second differentiator is our low-code platform. Duck Creek is very innovative in the way we allow carriers to quickly configure their business rules in a low- and no-code platform, which allows our customers to save and edit those rules with front-end editors without the need to write scripts or do code, and manage those complex rules in code-like logic. It allows them to reuse these low-code rules to launch additional products—and it creates more speed for carriers. An example of this is our work with Munich Re, going live on the full Duck Creek suite in 90 days—that’s not something that can be done without great low-code tools.
IIR: With the work that Duck Creek and other core system/platform vendors are doing, we’re seeing a great change in the industry with regard to speed of implementation and upgrade. How would you characterize the quality and magnitude of that change?
MJ: I think what’s different and is that in the old world, carriers had to make a choice to either be completely standard and stick with the software out of box not and not be very differentiated—or to have to spend a lot of work coding in differentiation. That’s why I see our low-code tools as such a huge differentiator. Carriers are taking advantage of these capabilities so that they can actually do both—they can stay standard, for example on an ISO commercial product, but in a very elegant way they are also able to modify and extend the things that are unique to them. And they can do that very quickly. They can add their flair of differentiation while still staying on a standard chassis or platform. I think that is very different. Now you see carriers not only launch new things very rapidly on our platform but they are also adding their own unique flair at the same time.
IIR: There’s a lot of industry discussion on just how far down the cloud road the vendors really are. How will Duck Creek be investing now to realize genuine cloud-native and platform-related capabilities?
MJ: A lot of the cloud-native stuff is a journey for us. We are all-in on a lot of the native services of the cloud. The beauty is that they help us do things in several lines of code that used to take us thousands of lines of code several years ago. So, it’s exciting how fast we can innovate by using cloud-native technologies—things like elastic and type-ahead search. That was a lot of work in the old days, and now in the cloud-native days it’s quite easy.
Beyond that we’re also extending our low-code platform quite a bit. That’s an area we’ll continue to pursue and extend our lead to be the number one low-code platform for insurance. We just released our Page Builder, which allows us to have an easy-to-use drag-and-drop metaphor for our customers so that they can create beautiful user experiences that are responsive design and optimized for users. They can have beautiful design, mobile responsive user experiences with a drag-and-drop metaphor out of our low-code platform. It brings a whole new level of power where a carriers can manifest their insurance rules right to the user experience level as well. This can apply to what products they will quote, what risk appetite they have and capture that very quickly, and put multiple types of optimized personas on top of that. Whether you’re quoting for an insured directly, whether you’re going to a broker or agent, it allows a whole new level of flexibility from a UX perspective for our customers.
IIR: One of the most important areas of the cloud/platform world is the capacity for accessing partner capabilities in an ecosystem. What are some of the ways Duck Creek is developing its partner ecosystem?
MJ: Of course! I was just getting to that. Obviously, the cloud allows us to accelerate how we’re bringing the ecosystem together, and we’ve been investing in a vibrant ecosystem. We just launched Duckcreek.dev, a development platform that ecosystem partners can go to. They obviously have access to Duck Creek APIs and they can develop against those. They have immediate access to environments, test data and the like, that they can develop and test their integrations against.
Another more profound aspect of that is where we seed it with pre-established business processes or orchestrations of business process, which our partners can plug into and be a part of a larger business process. And example could be a data provider that is providing data to help prefill a quote. We’ll do the end-to-end quoting process in Duck Creek, and they have a plug point to go and provide their data. This allows the vendors to more seamlessly participate in a larger orchestrated insurance business process.
Two great examples of this, we’re encouraging more native analytics to be wired into our platform and there are two recent adds to our partner ecosystem with Cytora and Gradient.ai prewired into the platform. Both bring advanced analytics capabilities. It’s a way we can allow these vendors to more seamlessly integrate with our overall platform.
IIR: What do you see as some of the greatest challenges and opportunities for Duck Creek over the next few years?
MJ: The one thing I’m always proud of is the close relationship we enjoy with our customers. I’d like to think that our customers feel that we’re there for them we’re very close to their strategies, and it’s not one-size-fits-all. Our platform can be configured for their unique strategies. So, with that backdrop, our greatest challenge and opportunity is to continue to scale our business effectively but still maintain these very close, personal relationships with every customer, so that we can optimize to each one’s strategic uniqueness. That’s what I want Duck Creek to be known for. It goes back to that earlier statement that I made around the idea that we do believe our platform allows carriers to be on a standardized back end but at the same time configure the things that are their secret sauce. Our ability to continue to replicate that at scale is our greatest challenge and opportunity.
Then the second great opportunity and challenge is international expansion, which I spoke about earlier. Our platform has already been proven in multitude of different countries and languages. We run with several carriers in continental Europe, Canada, down in Australia and New Zealand, I think for us the challenge and opportunity is to leverage this reusable back plane but at the same time be very local in those target countries. Because you need to understand local markets, the local regulations, the local products and consumers. Being able to leverage the global capabilities of Duck Creek but then also be very local within each of those countries is kind of the next frontier for us.
IIR: Finally, I wanted to ask how Duck Creek looks at partnerships and helps them from a cultural standpoint. Transformation very difficult to do from business process reengineering and the culture behind it. Is that an important part of your relationship with carriers?
MJ: Yes, it really is. We see it on two dimensions. First is with our influencing the business culture. We’ve seen that carriers with a test-and-learn mentality—the ones that are never satisfied with their own business rules, products and results and they are always analyzing testing and re-measuring—these are the ones that succeed. We try to influence that culture, and I think that our tool sets caters very well to that. It’s not just about getting your product deployed but it’s always tuning your product to be the optimal product in the market.
Secondly, we play a big role in the culture of IT as well as the business with regard to the adoption of change. We work best with carriers that adopt change on higher frequency and a cadence—not waiting for big releases 18 months or even six months but rather on a cadence of constant adoption. We’re trying to push the culture on more iterative approaches because we see how important that is to the success of carriers.