When insurance leaders talk about modernizing their core insurance platforms, they are not referring to generic claims of “digital transformation. To them, it is more about pushing for agility. For most insurance carriers, the real bottleneck isn’t a lack of ideas; it’s the heavy lift of pushing those ideas through slow, tightly coupled core systems.
It’s not just about getting new products out faster anymore. It’s about making sure those products are the right fit, testing new coverages on the fly, and tweaking them before anyone else even sees what you’re doing. Property and casualty insurers are leading the way with microservices because managing a huge range of products demands it. But the reality is, lots of carriers still work on release schedules that take months, not weeks. The change happens when they stop seeing their core system as one big engine and start breaking it down into smaller, modular pieces connected by APIs. That’s when true flexibility kicks in.
While traditional insurance technology has a unified software design that makes it very stable, the downside is that it is monolithic, i.e., big codebases where underwriting, rating, commission, policy issuance, billing, etc., all sit in tightly coupled modules. To change anything, such as adjusting rating logic, you often must touch or at least retest substantial parts of the system. That drives long release cycles, high coordination overhead, and resistance to change.
By contrast, modern insurance platforms adopt modularity (often implemented via microservices + APIs). It breaks down the monolith policy management architecture into focused, independently deployable components, such as:
Underwriting engine
Rating calculator
Policy issuance & lifecycle
Document generation
Integration with external services (e.g., payment, identity verification)
These can be developed, tested, and released independently. Teams can run in parallel. Changes to one service (e.g., rating) do not drag along the full regression burden of the entire platform.
It’s easy to say microservices make you faster. Insurance microservices on their own are not going to get your insurance company to actually compress launch timelines. Over the years, I’ve seen both the success stories and stalled projects. There are certain non-negotiables if you want to move from months to weeks for new product launches.
The real wins are when your technical team advises you to map each service to a business capability: underwriting, rating, policy issuance. The team that owns the underwriting unit should be able to deploy changes without having the policy issuance team hold them up.
Insurance microservices must enable parallel development. On the other hand, splitting your monolithic system purely by technical layers (say, UI vs. database) is setting yourself up for a tangle of dependencies that defeats the purpose.
In complex insurance ecosystems, insisting that every microservice has its own physical database often creates more complexity than it solves. A more pragmatic approach is to adopt logical data ownership per service.
This means each microservice is responsible for its own schema and the business rules that govern its data tables, even if those tables sit within a shared database infrastructure. Crucially, other services access that data only through APIs, never by writing directly to the shared tables.
This model strikes the right balance for insurers: it avoids the coordination bottlenecks and cross-team dependencies that slow down releases, yet it respects the operational realities of established insurance platforms.
An API is not just a connector — it’s a contract. Document it well, keep it stable, and think about backward compatibility because your consumers (agents, partners, even internal teams) will depend on it.
Not every workflow needs an immediate response. For asynchronous events like claim notifications or policy cancellations, event-driven architecture (EDA) makes a big difference . It lets one service publish an event and others react when they’re ready. This avoids the domino effect where one slow service holds everyone else up.
A U.S. carrier migrated its policy admin workflows to AWS and restructured submission, rating, underwriting, and issuance to communicate via AWS EventBridge. For example, when a policy cancellation occurs, rather than immediately forcing all systems to process the change through a synchronous call, EventBridge triggers an event that downstream systems listen to and respond to independently, cutting mid-product change lead times by weeks.
Technology choices are only half the story. The carriers who actually get to release cycles that are weeks, not months, put just as much effort into how they build and deliver software. That means serious investment in CI/CD (continuous integration/continuous delivery) pipelines that involve automated workflows that test and deploy code safely, and infrastructure automation so environments can be spun up and updated with almost no manual effort.
Containers and Kubernetes make this possible by packaging services so they run consistently everywhere, whether in the cloud or on-prem. Rolling upgrades let you deploy new features in stages without taking systems offline, and automated integration tests catch problems before they ever reach production. Even feature toggles — simple switches that turn new features on or off — let you test changes in live environments without risk.
Launching a new product doesn’t mean starting from scratch every time. The insurance companies that move fastest lean on reusable components for things like payments, document generation, and identity/authentication — then assemble them differently depending on the product. In practice, some U.S. MGUs have reported reusing as much as 80% of their existing modules, which cuts months off the timeline for launching new offerings.
Finally, the human side, because architecture alone won’t deliver speed. Cross-functional squads that own a service end-to-end, with clear SLAs and decision rights, keep teams from stepping on each other’s toes. At the same time, you need governance to prevent a free-for-all that leaves operations teams supporting five different tech stacks.
Starr Insurance reworked its systems using a microservices architecture to automate ISO ERC rating content and decouple the rating engine from front-end distribution. The result? They were able to roll out a new general liability insurance product across 30 states in just four months—and complete a full national launch in six months. Because the system is modular, changes deployed in one state could be replicated quickly in others, avoiding risky “big bang” releases.
CoverWallet, the small business insurance provider under Aon, also relies heavily on insurance microservices architecture and an API-first approach. This setup lets them bring new commercial insurance products like business owners’ policies to market in multiple states within weeks. By separating rating and policy issuance from distribution, CoverWallet can launch products through partners or embed coverage directly where small businesses need it, moving from development to deployment far faster than traditional carriers.
Another top global insurer embraced a modular capability catalog, building reusable components for quoting, premium collection, and digital onboarding. Using this “plug-and-play” approach, they launched a car insurance product and then quickly introduced an e-scooter insurance offering simply by recombining existing components. This kind of flexibility is at the heart of a modular microservices strategy, allowing new products to reach market in weeks with minimal additional development effort.
No insurer achieves a fully modular microservices setup overnight. Legacy cores, third-party data, and established distribution channels mean hybrid environments are the reality for years to come. Middleware and API orchestration act as the translators and traffic managers, letting new digital services run smoothly while keeping vital legacy systems connected.
The key is focus. Don’t try to modularize everything at once. Start with high-impact, high-variation modules—rating engines, discount or endorsement logic, forms and templates, and underwriting rules. These are the areas where modularity delivers the biggest boost in speed and flexibility. By starting smart, insurers can build momentum, prove value quickly, and scale their modular architecture with confidence.
Have questions about modernizing your insurance platform? Reach out to the SimpleSolve team to discuss how microservices can work for your business.