If you are dealing with the digitalization of insurance services, then you certainly know this term: Microservice. Many well-known Internet companies - for example Amazon, Twitter, Netflix or Uber - have built their platforms with this model.

The success of these companies means that this technology receives a lot of attention. It also offers numerous new opportunities in the insurance sector and can trigger innovations that affect all areas of the business. Therefore, we have compiled a four-part article for you, which deals intensively with this topic. In the first part you will learn everything about the basic features of Microservices.


What is a Microservice anyway?

A microservice is a "small" web service that enables you to perform a very specific business function. This may be an ordering process, a payment process or the creation of an insurance policy. For each of these tasks you use your own micro service, which works independently. Despite its autonomy, the application can communicate with other microservices. There are special interfaces for this, which the individual services access. In this way it is possible to exchange data with each other. The microservice architecture is the antithesis to monolithic programs. All functions are closely intertwined, so that you cannot call them up independently of each other.


Speed of maintenance and further development

Use Microservices, benefit from everything from the high speed when you maintain or evolve them. If an additional function is required for a monolithic program, it becomes expensive and time-consuming to implement it. This also applies if you have to correct an error. Since all program areas are connected, a small change can affect the functionality of the entire software. Microservices, on the other hand, are independent of each other. If an adjustment is necessary, the effort involved is significantly lower. This allows you to implement innovations faster and to invest less in them.


Scalability creates flexibility

It happens again and again that a new order brings with it a high demand of a certain function. In addition, seasonal fluctuations frequently occur. For example, many companies have a particularly large number of administrative tasks at the turn of the year. The IT infrastructure must react to this and provide the necessary resources. With a monolithic program, however, it is very labor-intensive to expand a particular area. Because many different business functions run within a single process, it is very difficult to control resource allocation. Independent microservices are much more flexible in this area and are therefore ideal for responding quickly to fluctuations in demand.


Independent functionality

Renewing the operating system used in your organization or replacing a shared library can affect a monolithic program. Therefore it is necessary to test the complete software in detail and to adapt it if necessary. However, microservices operate independently of these factors, eliminating the need for this effort. This makes it much easier for you to implement innovations for your business processes. This independence also offers advantages within the organisational structure of the company. Instead of centrally controlling all processes, it is possible to form small independent development teams. They can use different techniques and thus select an optimal procedure for each function.


Challenges for companies implementing microservices

The previous paragraphs show that microservices bring many benefits to insurance companies. But there is also a downside to the medal. The development of the system represents a great challenge. The architecture is very complex and also the training in the use is not easy. In addition, this technical innovation makes it necessary to revise the process flows in all participating operating areas. The changes involved in implementing Microservices make this a lengthy and costly process. Nevertheless, the changeover is worthwhile as it can lead to an enormous increase in efficiency in the medium term.