how-does-insurance-microservice-architecture-help-insurers-insurance-technology-insurance-software-solution-iNube- digital-insurance-platform-insurance-brokers

How does Microservice Architecture Help Insurers?

Insurance carriers across the globe have started looking into the ways to adopt digital transformation. One way to look at digitalization of the microservice architecture space is through the structure that the domain runs on.  

Now, one way to look at the architecture that an insurance carrier wants to be built upon to meet the constantly changing customer needs is through the migration from a monolithic architecture to microservices. But why is it necessary for an insurance firm to let go of an architecture that has traditionally formed the center of the domain?

Let us explore the need for this migration in the article today.  

What is monolithic architecture?

It is an architecture that is built as an individual entity. Both client-side and server-side applications are hosted in one place inside a ‘monolith’. They exist because the function and process that operate within them rely on each other for working, so once the architecture of this size is built, it is extremely difficult to break it.  

There are a number of benefits that come attached with this architecture type: 

  • Lesser security concerns as there’s no need to connect different apps with each other 
  • A simple solution for internal teams to handle 
  • Speedy launch. The moment the system gets running, everything gets live simultaneously 
  • Lesser latency.  

But what happens when the tight-knit architecture becomes faulty? 

At the time of breakdown, the entire architecture has to be taken ‘offline’ to get fixed. This leads to a disruption among the entire system, which doesn’t just increase the downtime but also the cost associated with the temporary delay in business operation.  

This one-ness nature of monolithic architecture and the problem it brings with itself is the reason behind the introduction of microservices.  

Microservices architecture – What is it?

It is a software development approach where single-function modules are built. The modules are basically micro applications that revolve around a single business function like issuing policy documents, FNOL (First Notice is Loss) submission, payment, etc. After that these micro applications are deployed independently and they communicate with other applications through the mode of APIs.  

Here are the different characteristics of a microservices architecture – 

  • These are independently, granular packaged services 
  • These are function-oriented with every microservices working around one function 
  • These are built for continuous delivery  
  • They communicate with other microservices through APIs.  


How different is monolithic architecture from microservice architecture?

The microservices architecture is built in multiple modules which interact with each other through APIs. This means, every individual module can get updated, scaled, and then deployed separately. In the case of a monolithic architect, the complete system has to be updated, scales, and then deployed together.  

The problem with monolithic is that the individual systems cannot scale, meaning if you want to update only the payment part of the architecture, you will not be able to do that. On the other hand, this new API-driven microservices approach offers greater nimbleness, lowered costs, lowered time to market. While providing unlimited opportunities for the creation of a new set of revenue and distribution medium. 

Now that we have looked into the basics of microservices, what makes it better than monolithic architecture, it is time to dive into the role it has to play in the insurance domain.  

What role does microservice architecture play in this domain?

Irrespective of which insurance carrier you talk to, they will tell you how they are looking for solutions to meet the evolving customer needs. Moreover, the microservices help them with becoming digitally agile. They help the insurers close the gap as they implement the digitalization of the core systems like the claims and policy administration to become receptive of the ever-changing needs and demands of the market. 

Additionally, the architecture helps the insurers with designing flexible offerings which can be effortlessly enhanced to address the competition-led demands. As the insurers move beyond agent-based operation to offering a system of omnichannel experience, the microservices architecture would play a massive role in creating that efficiency and development of lean applications.

Here are some of the benefits of microservices promises to the insurance sector. 

Increased agility  

Legacy systems built on monolithic architecture are one of the primary factors holding the insurance firms back from achieving true innovation. When you add microservices in the picture, you help solve this. Basically, the architecture makes it possible for the firm to make changes only in the specific business function microservices and not the entire app. Lastly, this leads to speedier change.  

Greater flexibility  

There are zero limitations to which platform or programming language should be used to build an individual microservices, as ultimately all the different microservices are going to be connected through APIs. Shortly, what this means is bigger application development flexibility. The same states true for the deployment as well. 

Faster time to market  

Although all the different microservices can be built in an agile mode by different teams, it ultimately leads to faster application development and deployment in the market. 

Faster enhancements  

As the systems are built of independent, small microservices. Altogether, it can get enhanced effortlessly by creating a new microservices for the new functionality or feature. 

More robust  

Generally, the architecture engineered on microservices is a lot more robust. Additionally, as any challenge can be solved by fixing a specific microservices, without it impacting the remaining system components. 

Better customization and re-use  

Significantly, the specific microservice architecture can be reused in other systems which require the same functionality. Moreover, there is a greater scope for customization as the architecture can be used for a completely new use case. By relooking at the composition of the insurance microservices used. 

Until now, we are sure that you must be sold to the idea of using a microservices architecture. But what cannot be ignored is making the migration switch from monolithic to microservices can be considerably huge.  

Specially, there are things that the insurance firms have to prepare for when making the switch –  

  • Assessment of the internal expertise 
  • Assessment of every existing system 
  • Long-term agile strategy.  

Ensuring all of this requires assistance from team that specializes in helping insurance firms with their architecture migration need. We can help. Reach out to the migration experts at iNube to adopt microservices for your firm.  

Picture of inube_Admin


Enquire Now

Product request demo form

This will close in 0 seconds

Whitepaper Form

Please submit your details to download this Whitepaper!

Note : After submitting your details the Whitepaper will be downloaded to your downloads folder.

This will close in 0 seconds