Against a backdrop of ongoing disruption, insurers are being asked to reinvent themselves. To transform at an operational level, insurers must move from complexity to simplicity. This alone is a daunting task. A composable architecture helps insurers simplify this complexity at every stage of the insurance value chain, often leveraging processes they already have at their disposal. Below are 5 practical use cases for composable architecture.
1. Policy management – from complex organizational structures to agile and integrated ecosystems
Many services for new insurance applications can be unbundled. This will allow insurers to accept applications through digital portals and an AI-based product/coverage selection engine. This can also help them set up a pre-qualification engine based on data from different providers, such as: B. Distance to coast, CLUE reporting, risk assessment using IOT sensors (surveillance systems, smart home devices, smart metering, etc.) and externalized rating and pricing systems. This helps distribute development, integration, and testing efforts and introduce new business policy applications much more quickly. By dividing the processes into multiple sub-processes, users can use them at different points throughout the policy transaction, such as when creating a money note or during renewals.
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2. Invoice management – from manual to automated and personalized invoicing
In the case of billing management, a breakdown of list billing services can be used to create reusable functionality such as account creation and updating member details. For transactions between multiple policyholders or agents, an invoice is generated at a specific frequency and EFT payments are made for different policy members at different locations. Reclaim and refund transactions can be triggered based on audit tasks completed at the end of the policy year. Many of these individual services can also be reused for regular audits in the commercial sector.
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3. Transform claims through composability – from inflexible to dynamic claims solutions
Claims processing includes four overarching modules: First Report of Claim (FNOL), Processing, Finance and Claim Closing. The FNOL process has micro-level services that can be unbundled as individual application programming interface (API) services for internal and external systems and listed as unbundled microcomponents. In a composability business model, these unbundled components can be rebundled to form dynamic modules.
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4. Straight-Through Processing (STP) in claims – from time-consuming review processes to API-driven auto-approval
Straight-through processing (STP) involves high-volume, low-value claims that can be settled immediately without detailed legal proceedings. Different APIs are used for the following processes: Starting from a claim basis; policy search and retrieval; Attach a claim invoice by automatically submitting invoices with vehicle or claim numbers; Verification of coverage of specific details in the invoice; and check whether the invoice amount is less than the STP threshold set by an insurance company (e.g. $350). Based on the result of all these API processes, claim payments can be automatically approved and the amount is paid to the insured immediately. These can be used for “glass only” automobile damage claims as well as low-cost medical injuries.
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5. Monolithic simplification – from large-scale legacy infrastructure to a modular, agile approach
In current customer discussions, we recommend simplifying monolithic structures to effectively implement a composable architecture. This means the gradual dismantling of the existing infrastructure and its more efficient reconstruction. Monolith simplification helps minimize risk when a customer has an active Monolith application that supports the business and is continually evolving.
Once we have determined that composable design can be applied, we proceed in three phases: we understand the challenge, evaluate the necessary actions and implement the solution. Following this initial approach, another component checklist can be created to classify monolith experiences.
Contact us to find out how you can use it to optimize and grow your insurance business Total reinvention of the company.
