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OWIT Global Blog

What Are Microservices?

On Jan 24, 2019

There has been a lot of talk about microservices over the past few years. But what are microservices and why are they essential for the insurance industry?

Microservices is an approach to develop applications that are made up of small, independent services that focus on a specific business capability. Although each microservice is deployed independently, they can be easily and quickly combined to develop new business applications. This approach is quickly gaining traction in the insurance industry where the complexity of core systems continues to be a challenge for insurers.

Why Are Insurers Turning to Microservices?


Microservices provide a more cost-effective way to address the bigger picture. By breaking down an application into small pieces that fit together, it becomes easier to build, maintain and support.

Furthermore, by identifying a particular pain point or gap in functionality, microservices can be used to target a discrete and complex need, without major disruption to the current systems landscape and eco-system. 


Microservices can help insurers save time, effort and cost in the long term. Enhancements can be contained or isolated to a single module, then tested and implemented without disruption to the rest of the application. This means more than one enhancement may be worked on at the same time.


Today’s business environment makes it necessary for companies to improve on their products and offerings continually. They must be able to go to market quickly. Current insurance applications are large-scale and keep growing with every enhancement. With microservices, applications can be scaled easily by keeping them separate but working together. This results in lower development and implementation time and ultimately lower costs.

Overcoming Challenges

Insurers can be faced with many challenges these days, and their ability to implement large-scale enhancements are at the top of the list. Some major implementations can take years to complete, so business leads decide not to do the work at all. They instead opt to continue with minor enhancements, or ‘band-aids’ to just keep the system up and running. This leads to frustration and the inability to keep up with customers’ demands. Microservices can help with all of this.

Many times, problems or challenges across an organization appear as one large problem but are actually a series of smaller problems. One approach to solving large problems is to deconstruct problems into smaller pieces across the organizations. When this is done successfully, those smaller problems are mapped to microservices.


Microservices breaks down the pieces, allowing those large-scale enhancements to take place. This means a shorter time for making the product available, and more visibility in the market place.


Many organizations are following a “rip and replace” strategy to update their enterprise systems for policy administration, underwriting, billing, and claims. These large implementations can be measured in years consuming business and IT resources. As a result, critical needs can be delayed.


Microservices can be used to address critical needs such as deploying consumer portals, automated processing renewals, and low touch renewals with minimal resources. Very specific niche pain-points are addressed without disrupting legacy systems.

New Opportunities

In order to differentiate themselves from the competition, insurers need the ability to launch new products quickly. In the current highly competitive market, time to market is important when launching modern insurance enhancements such as cyber insurance products. Customers have high expectations that require insurers to build better products in less time.

Microservices can also be used to create a “sandbox” where the market acceptance of a new product offering can be tested. With IT backlogs stretching anywhere from months to years, bringing new products to market can be challenging.

All Microservices Are NOT Created Equal

The implementation regarding time and cost for Microservices are a far cry from the enterprise “rip and replace” strategy. However, microservices need to be on the same level as enterprise applications when it comes to quality, speed, and performance.


As with enterprise applications, microservices must address the needs of an insurer’s current production environment. This is especially true for organizations that are implementing the “rip and replace” strategy.


Microservices should not be viewed as a “stop-gap” measure, but rather an investment to ensure compatibility with new technologies. Examples include future blockchain implementations, artificial intelligence technologies, to name a few. Even if an organization is not an early adopter of new technologies, planning to leverage these technologies once they become commonplace is part of staying ahead of the competition.


Complexity comes in many different forms including not knowing how an organization’s workflow can be affected by changes in compliance or mandated changes beyond their control.

One example is what is currently happening in the London Market, with the changes driven by LM TOM and mandated by Lloyds with respect to the DA SATS initiative for market reform of Delegated Authority business and Bordereaux management/processing.

There still appears to be a high degree of uncertainty as to the impact this will have on in-house systems and processes for Managing General Agents (MGAs), Brokers, Coverholders and TPAs.  Many are not quite sure what is needed just yet.

In situations such as this, microservices can be used to complement the existing and new processes that need to be put in place and help accommodate any changes (known and unintended) that may emanate from the day to day working through of the new processes, in real time.  Microservices then can be quickly modified once the requirements become clearer.

Getting Started

There are three simple steps to determine where microservices can help your organization grow:

  1. Identify the critical needs of your organization

  2. Vet out and understand what microservices can do for you

  3. Examine your organization’s pain points and backlog, then categorize them into small to medium problems.


Insurance companies have the long-standing reputation of lagging behind in technology, and not being able to keep up with the ever-changing business market. Their systems are bulky and outdated and take forever to implement large enhancements.

Microservices addresses all these pain points by breaking up the pieces and allowing for those enhancements to take place.

 Interested in learning more about OWIT Global's microservices? Click the link below.

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Wendy Aarons-Corman

By Wendy Aarons-Corman

Prior to joining OWIT Global, Wendy was most recently providing consulting services with a focus on strategy development for both software vendors and insurance carriers. Wendy has also served as President of North America for edge IPK, a provider of insurance specific web portal responsive technology solutions, developing all aspects of marketing, sales and operations until the company’s acquisition by Temenos Group AG in 2012. Earlier in her career, Wendy was the founder of Business Development at Duck Creek Technologies and was instrumental in the company’s significant early growth in both market share and revenue. Wendy has also held various positions in technology, beginning her career as a software developer for commercial and specialty lines insurance.

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