Traditionally the launch of new insurance products has been a large undertaking as it requires both business and IT resources and, in some cases, shifting organizational priorities. In addition, building and deploying these new products is both risky and expensive.
Cloud-based microservices should be leveraged to develop a “new product incubator” that enables organizations to deliver and test the market for new products faster with reduced risk, minimum disruption to the production environment, and with less investment required.
The 3 Benefits of Using a Cloud-Based New Product Incubator
A cloud-based microservices approach has changed the way new product development can be managed in several ways that include:
Speed of development and ability to quickly introduce innovative ideas to target market
Low “footprint” on in-house systems landscape
Can reduce internal red tape and increase a company’s agility for new product launches
These needs provide the insurer with a non-disruptive environment to test new products, receiving customer feedback on product viability Changes to the products can be done quickly and released back to the distribution.
In addition to the inherent application development benefits of microservices, deploying a microservices-based new product incubator has additional benefits to the organization.
#1 – Launch of new products with minimal disruption to production systems
The new product incubator will enable the business to develop new products and enter the market quickly with a focus on innovation and the unique value proposition. As feedback comes in from customers and brokers, changes to the product offering and distribution techniques can be easily accommodated.
When testing new products, the go-to-market strategy is to offer quote-to-bind capabilities with no cancellations or endorsements typically. If the go-to-market strategy is successful, the data can be sent downstream to your production systems where endorsements and cancellations can be taken care of.
#2 – IT resources and cost
The cost and approval necessary to develop new products in an incubator are significantly less than in a production or production staging environment. Cloud-based microservices are a subscription-based cost as opposed to an additional cost to an existing 3 to 5-year software license for a traditional PAS system. Cloud-based microservices also do not require a capital expense for additional hardware.
The IT resources required are little to none. Once the incubator is set up with the proper security and compliance necessary to quote and bind a new product, IT resources are not required on an ongoing basis.
One of the strengths of microservices as mentioned earlier is the adaptability to backend systems. When data from a new product needs to be sent downstream to production systems, microservices offer flexible API options for connectivity.
#3 – Incubator to transaction services
If a new product offering catches on, the incubator can be extended to a fully functional system including transaction services over time or can be moved onto the legacy systems. The system can be made available direct to consumer or for agents and brokers.
Deploying a microservices-based incubator for the development of new insurance products enables organizations to deliver new products faster with less risk, resources and investment required. Product teams can focus on making meaningful changes to the business logic and user interface based on the feedback from customers and brokers faster than updating production systems.
Products developed within microservices-based Incubators can also have their functionality extended from quote and bind to a fully functional transactional system that can be made available to consumers, agents, and brokers.