In the insurance industry, we understand that to stay relevant and maintain market share, we must be agile, innovative and embrace new technologies. From a technical perspective, this means that insurers must be able to adapt their enterprise architecture quickly and sustainably in order to reinvent themselves and grow. But in an industry full of legacy architecture, system modernization is an urgent problem. How can insurance companies design future systems that both maintain the legacy they have created and integrate into the modern world?
Accenture is working with its insurance clients to meet this challenge. The result is a new frontier for how technical infrastructure is built.
Insurance architecture design is changing
We need to change the way the insurance architecture is designed for increased agility and growth. This is not limited to our industry alone. Across all industries, there is a seismic shift from inflexible, monolithic architecture to modular apps that can adapt to business changes by assembling, reassembling and expanding. This helps organizations keep pace with changing customer demands, supply chain disruptions, economic uncertainty and the rapid pace of technological advancement.
Insurance is an industry that is rich in data, yet often burdened by legacy technology. New, adaptable solutions will differentiate leading insurance companies. According to Gartner, by 2023, organizations that have adopted an intelligently composable approach will outpace the competition by 80% in terms of speed of new feature implementation.
The combined insurance company – what’s new
A composite enterprise can be defined as an organization that delivers business results efficiently and adapts to the pace of business change. The digital architecture that enables composable enterprises is based on a strong Application Program Interface (API)-centric mindset, with business functions encapsulated in interchangeable components. In composable architecture, APIs help improve the agility and monitoring of ecosystems. This helps the organizations to democratize the business process and become a highly scalable digital business. For insurers, this approach has many opportunities to simplify and scale their digital operations. Packaged Business Capabilities (PBC) – encapsulated software components that represent a well-defined business capability – can be created to be easily recognizable to business users. While the concept of composable architecture has been around for a few years, we are now harnessing the power of PBCs to create truly replicable and scalable infrastructure solutions.
How insurance companies can benefit from it
By leveraging the capabilities of a combined company and PBCs, insurers can scale with speed and agility. to create a strong foundation for a composite company:
- Build modular business opportunities: If insurers want to build a scalable composable architecture, they must have a set of autonomous business capabilities that can be linked together to execute a business process uniquely that provides a competitive advantage. These modular business opportunities should have the ability to be managed independently and improve while participating in a larger business model.
- Create modular technical functions: To support the modular business capabilities, insurers must build modular technology capabilities that can be easily integrated to enable smarter business models. These must be autonomous, managed and modular to be combined via a standard interface to support the required business need.
In conclusion, taking a composite approach to technical architecture in insurance has game-changing potential. It allows insurers to future-proof strategies by design, focus on proactive creation and see increased speed in feature implementation. In our next blog post in this series, I will share practical examples of composable architecture in an insurance claims context.
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