The End of Policy Admin Systems?

Will policy administration systems cease to exist as we know them? Insurance core systems have evolved from monolithic policy, billing and claims suites that were primarily for accounting functions to fully functional service offerings. Configuration capabilities were added next, reducing the size of the code base. Solution providers are now aggressively working to offer headless (no user interface) core offerings with microservices and integration layers to address the legacy nature of the core systems. As a service-oriented architecture, microservices consist of independent, modular services that each run a unique process and communicate via a lightweight protocol. Microservices-based architectures allow for continuous delivery and deployment, and these offerings meet carriers’ needs for competitive differentiation of customer experiences, faster deployment of changes, integration with new analytics capabilities and deeper digitalization of processes. What’s next? We see leading solution providers modernizing their systems by segmenting and extracting functionality from the remaining core components to create standalone services that can be hosted in the cloud and accessed directly from any platform. They will continue to dismantle these components and build microservices to enable more continuous change and flexibility. These services will leverage cloud capabilities and expand on demand to meet spikes in workload, then shrink to more appropriate deployment levels. See also: Policy Administration: Ripe for Modernizing   Orchestration of microservices for online interactions will eventually be controlled by the UI layer. Batch jobs have been modernized to background functions to increase availability. Will policy administration systems shrink into just the orchestration layer for bulk processes? Will they disappear entirely like a house built out of Lego blocks that has been dismantled? Will current solution providers adapt quickly enough, or will insurtech disrupt this market with core services built on more adapted architectural frameworks? One thing is for sure: Carriers will need more sophisticated tools to monitor performance and manage microservices. By implementing the modern core systems of today, carriers can not only avoid needing to transform their existing systems, but can also focus on differentiation while outsourcing evolution to their solution providers. The key is to remember that the point of buying a system isn’t just for benefits today, it’s also for the value that comes tomorrow.