Innovating and Digitizing Insurance with Microservices


Insurance is a unique, process-oriented industry that poses a unique series of multifaceted challenges. The business requires an intricately woven web, connecting complex processes amongst a multitude of players, including consumers, brokers, local and federal agencies, and carriers. All of this is facilitated by a constant flow of information transmitted in every direction.

Despite the perceptions, or misperceptions, the insurance industry is a dynamic and far-reaching business. And for good reasons, insurance companies and related software vendors usually embrace the latest technology. The insurance industry is data-centric and thrives on new technologies and communication methodologies. That’s why Web services combined with insurance data standards will bring new efficiencies and better experiences for parties up and down the global insurance value chain – from risk management and underwriting to service and reinsurance.

Microservice accepts all challenges from Insurance Business

Though monolithic architecture has its own advantages, it faces quite a few and mostly important challenges to meet the Insurance industry needs and where Microservice can jump in:

    1. Consistent Experience – Provide the same set of features, functionality, and operational controls irrespective of the engagement channel.
    2. Context Preservation – Maintain the user context as the customer moves between channels.
    3. 360 Degree Visibility – Record and recognize all customer interactions across channels and learn preferences and habits.
    4. Content Publication – Develop and control content publication and enable faster content deployment
    5. Personalization – Tailor channel-specific interactions to suit customer needs
    6. Agility – Roll out incremental improvements quickly and often with minimal impacts
    7. Speed – Build solutions for different devices and platforms quickly by reusing existing capabilities and without having to tear down entire infrastructures or re-platforming completely to reduce time to market
    8. Elastic Scalability – Rapidly scale specific application components instead of the entire application for maximum cost-efficiency and elasticity
    9. Operational Flexibility – Write once, deploy anywhere
  1. To develop an effective Omni-channel Customer Experience, we would recommend to Integrate three primary technologies, Microservices Architecture, Containerization and Cloud Computing.

How Microservice does it?


By adopting a Microservices architecture style, the system can decompose large, complex software applications into many, small, isolated services. The decentralized architecture offers freedom from a unified schema, allowing components to evolve independently of the overarching system and be free to use the best tools/platforms to solve their specific responsibility. Microservices for Insurance company is well-suited for Agile development and Application Program Interface (API)-first design.

Implementing Containerization offered an operating system-level virtualization method for deploying and running distributed applications without launching an entire virtual machine (VM) for each application, delivering portability, flexibility, efficiency and speed.

Lastly, adopting Cloud Computing provided the on-demand infrastructure and application services to efficiently provision, monitor, manage, and scale the distributed components of the Microservices Architecture. By hosting many of the applications/microservices on the Cloud, it significantly improves cost management, particularly as the scope of the Omni-channel offerings grows.


The Monolith Can’t Keep up With Changes in Insurance Technology

Steps are being taken/ contemplated by most Insurers to modernize their IT systems and address these challenges. Some of the key trends include:

    1. Microservices Architecture
    2. Containerization Digital Strategy
    3. Cloud Expertise
    4. Responsive Development
    5. Agile Process



Three Advantages of Microservices Architecture

    1. Migrating at Your Own Pace
    1. Collaborating with Best-of-Breed Vendors for Each Microservice
  1. Making Your Internal IT Team More Agile

The microservice approach can offer a tremendous advantage for insurance organizations willing to undertake the effort; yet, as with any new technological methodology, it is critical to apply it with caution to development efforts where it makes the most sense, both structurally and financially.


MSA in the Insurance Industry: Scenarios, Approaches, & Prerequisites

A commonly expected scenario in the Insurance industry is one where, a monolithic legacy application that has served the business needs of a company for years and presently needs to be modernized.

The business shift from a monolithic architecture towards a Microservices Architecture is supposed to ensure more independence/ autonomy, speed-to-market etc. However, the transformation will not be the same for every organization/ domain. What worked in one organization may not fit for another.

Break it Down?


Given the fact that microservices introduce more complexities, and there could be many unknowns, things could go wrong in a Big Bang approach.

Hence, it is important to start break down into few micro ‘services’ and take key learnings forward, as one incrementally migrates all functionalities to MSA.


Starting Small


In this incremental breaking down approach, choosing the right module/ functionality to start with is a crucial point of start.

    1. Choose a module that is easy to extract. This will help one implement it quick and also document best practices etc. for the other services that will be implemente. As newadded, it is important to develop the competencies that are essential for adopting MSA.
    2. The focus can next be on modules that offer the most business value as separate microservices. Examples include:
    1. Modules that change very frequently – ensures that only this service needs to be redeployed after every change
    2. Modules that have significantly different scalability or other computing resource requirement.

The times are changing.  And it is exciting! The ability to leverage powerful microservices architecture to build a new foundation for the digital age of insurance is game-changing. It will enable new business models, new products, refined customer experiences and timely responses to new business needs (in hours and days instead of months and years) and it will help insurers remain relevant and competitive.

We look forward to covering our views on the role of microservices in other industries as well. We encourage you to read our thought leadership, From Monolithic to Microservice: The Majestic Enterprise Business Shift: Par I, to gain a deeper insight on these topics. Please share your views in the contact form. We would enjoy hearing your perspective.

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