In the rapidly evolving insurance sector, the adoption of composable technologies is emerging as a game-changer. By revolutionizing traditional practices, these technologies—rooted in cloud-native architectures and modular business strategies—provide the agility, flexibility, and scalability insurers need to excel in today's dynamic market and adapt to shifting customer expectations.

As we've seen, we live in an event-driven world, which has shifted customer expectations within the insurance industry. Customers now demand:

• Proactive and anticipatory service from their insurers to enhance their sense of safety.
• Seamless digital experiences across all touchpoints.
• Personalized insurance solutions tailored to their unique needs and preferences.
• Easy access to relevant information about their policies, coverage details, premiums, and claims history.

The rise of Insurtech disruptors has significantly influenced shifting customer expectations. These innovative, technology-driven startups challenge traditional industry practices and reshape how insurance products and services are delivered. By leveraging advanced technologies such as artificial intelligence (AI), machine learning, big data analytics, IoT (Internet of Things), and blockchain, Insurtech disruptors introduce new business models, streamline processes, enhance customer experiences, and improve overall efficiency in the insurance sector.

In response to these changes, traditional insurance companies are faced with the need for transformation. However, legacy IT systems, known for their complexity and rigidity, present significant obstacles to digital transformation. Additionally, data silos, often a result of historical mergers and acquisitions, further impede agility by hindering comprehensive insights and efficient data utilization.

To remain competitive, insurers must embrace the possibilities offered by composable technologies.

The Role of Composable Technologies

Composable applications are built from modular, reusable building blocks known as Packaged Business Capabilities (PBCs). These leverage microservices, APIs, and other components to maximize flexibility, agility, and scalability. Such a methodology facilitates rapid assembly and reconfiguration to meet evolving business needs.

This approach marks a technological paradigm shift from monolithic systems to modular, component-based architectures. Composable applications use this modular architecture across various resources, providing unmatched flexibility, customization, and scalability.

Adopting composable applications not only accelerates problem-solving but also drives digital transformation within the insurance industry. By decomposing software functionalities into reusable modules, organizations can quickly iterate and deploy new features independently.

Benefits of Composable Technologies in Insurance

Adopting composable technologies unlocks transformative benefits for insurers, allowing companies to align perfectly with the shift in customer expectations. Composability empowers insurance companies in several key ways:

• Enhanced agility: insurers can quickly respond to market changes and customer demands by assembling and deploying modular solutions.
• Improved customer experience: personalized, seamless interactions are now possible with flexible architectures that support tailored insurance solutions.
• Operational efficiency: simplified, modular systems streamline processes, reduce complexities, and optimize resource utilization, leading to cost savings and increased productivity.
• Innovation and collaboration: composable architectures enable collaboration with insurtechs, fintechs, and other industry stakeholders, creating an ecosystem that fosters innovation and growth.

Composable Architecture in Insurance: a good example from Accenture

Accenture has showcased the success of composable architecture in the insurance industry. By transitioning from traditional monolithic systems to modular, agile applications, Accenture has enabled insurance companies to swiftly adapt to changing demands and seamlessly integrate advanced technologies. 

This transformation has empowered insurance firms to sustain their competitiveness in five key ways, as highlighted by Accenture:

• Policy Management: unbundling services for new coverage applications, establishing pre-qualification engines, and distributing development efforts.
• Billing Management: breaking down list bill services for automated invoicing, account creation, and updating member details.
• Claims Transformation: unbundling the First Notice of Loss (FNOL) process into micro-level API services and rebundling them into dynamic modules.
• Straight-Through Processing (STP) in Claims: Utilizing APIs to auto-approve high-volume, low-value claims, thereby reducing adjudication time.
• Monolith Simplification: gradually dismantling legacy infrastructure to adopt a modular, agile approach, minimizing risk during the transition.

The Role of Entando Application Composition Platform

Entando's Application Composition Platform (ACP) is pivotal in transforming insurance operations. It enables the development, deployment, and management of applications, providing a robust foundation for insurers to create, orchestrate, and integrate modular components to build innovative solutions tailored to specific needs.

For instance, in Insurance Claims Management, the platform’s composability allows for efficient claims handling. A Composable Claims Processing System is structured into distinct, interoperable modules—or Packaged Business Capabilities (PBCs)—each handling a specific aspect of the process. These modules are connected via APIs, allowing for seamless updates and expansions without disrupting the entire system.

PBCs of a Composable Claims Processing System may include:

• Intake Module: oversees the initial submission of claims, interfacing with customer-facing platforms such as mobile apps or websites where policyholders submit claims alongside requisite documents and details.
• Assessment Module: integrates diverse tools and external services for evaluating claims. It may employ AI for damage estimation from images, incorporate weather data services to verify claims related to natural disasters, or leverage business rules engines to assess claim validity based on policy specifics.
• Approval Module: manages the decision-making process for claim approval or denial. It might automatically approve straightforward claims while routing complex cases to human adjusters for review.
• Payment Module: processes payments upon claim approval, linking with banking services for direct policyholder payments or other financial institutions for various payment methods.
• Analytics Module: delivers insights into the claims process, pinpointing bottlenecks, fraud trends, and customer satisfaction levels. This data aids insurers in refining their processes and policies.
• Customer Communication Module: orchestrates all customer communications during the claims process, including automated updates via SMS or email, chatbot interactions for customer queries, and interfaces for human customer service representatives.

With rapid time-to-market and extensive customization possibilities, Entando ACP is a pivotal tool for unlocking value within insurance companies, helping them stay competitive and agile.

Looking Ahead

Composable technologies represent the future of insurance, offering a path toward continuous innovation, operational excellence, and customer-centricity. By embracing cloud-native architectures and modular business models, insurers can navigate the evolving landscape with agility and resilience, setting new standards for the industry.

With a composable mindset, insurers can thrive in an era where adaptability and innovation are imperative for success.