Service Oriented Architecture: Relevance for the Insurance Industry
Service Oriented Architecture (SOA), simply put, is an architecture style for developing and integrating software. This style involves creating services out of applications which can be used by other applications regardless of the computing platforms. SOA is not the “big thing” of the future. It, in fact, is increasingly becoming mainstream. In the context of the Insurance industry, SOA delivers significant advantages, namely those of a) dealing with legacy designs and implementations, b) creating new sales channels and c) driving efficiency and customer satisfaction and d) launching innovative business models.
SOA’s utility for Insurance Industry
The insurance industry lends itself beautifully to SOA. The main drivers are:
Legacy systems: Being a century old industry which adopted IT early on, the industry has several reliable legacy systems. How does one use the legacy systems to build on them?
Consolidation/M&A: The industry has witnessed a fair share of M&A activity. How does one integrate businesses with very different technology applications and platforms?
New business models: The insurance industry (like any other) is continually bringing out new business models. The advent of the internet, e-commerce and overall customer orientation has made innovating on new business models essential. How do you launch new business models faster?
In a study, a SOA technology major has outlined the various business benefits. These include a faster pace of launching new products, providing a personalized user experience for customers and making the agent/partner system more communicative.
The above drivers have made SOA invaluable for the insurance industry. Several industry players have already taken the plunge. Let us see what have they accomplished.
SOA in action in the Insurance industry
Successful implementation examples abound and across countries. The biggest names in insurance have taken on the SOA challenge. One of the foremost insurance players has used SOA actively across several countries. Another major insurance company has moved to SOA as well. Every player adopting SOA has pointed objectives. For example, a leading insurance player moved to SOA to improve its service to vendors.
The move towards SOA is not a phenomena limited to North America. Two prominent players from the United Kingdom have taken the SOA dive. A Swiss insurance major used SOA to integrate systems in all its subsidiaries in six different countries.
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The benefits are being recognized by the best in the industry and across geographies. If you are an insurance industry CIO/CTO and are thinking of innovating, SOA might be the right way to go.
To start with, understanding of the business architecture is important. How should the business ideally interact with IT stakeholders? This should help you get started in the right direction.
I’d love to hear your views on the subject. Are there interesting case studies about SOA in the insurance industry context you can share? If yes, go ahead and comment about it.