{"id":51982,"date":"2018-10-25T11:37:50","date_gmt":"2018-10-25T11:37:50","guid":{"rendered":"https:\/\/staging.majesco.com\/?p=51982"},"modified":"2025-04-07T10:16:47","modified_gmt":"2025-04-07T14:16:47","slug":"design-secrets-of-platform-part-1","status":"publish","type":"post","link":"https:\/\/staging.majesco.com\/?p=51982","title":{"rendered":"Design Secrets of Platform-Based Architectures Part 1"},"content":{"rendered":"

Nest home products are designed to make life easy for homeowners, save them money and protect their homes. That might sound like a commercial aimed at homeowners, but it is really a wake-up call for insurers to pursue platform-based architectures. Nest maintains a developer site<\/a> for its APIs, so that subscribers\/partners can integrate and use Nest data.\u00a0 Unfortunately, most insurer architectures aren\u2019t designed to effectively take advantage of all that Nest — and a growing list of others — have to offer that can be used for new products, services, pricing, underwriting, and more. A platform-based architecture, such as the one we describe in Majesco\u2019s recent thought-leadership report, A New Business Model for a New Era of Insurance<\/a><\/em>, opens an insurer up to a world of data, capabilities and possibilities! With Nest and so many other potential ecosystem partners, what is good for the customer is also great for the insurer, if the insurer is pursuing a platform model.<\/strong><\/p>\n

As we noted in last week\u2019s blog, A New Platform for a New Era<\/a><\/em>,<\/em> platform-based architectures meet the needs of a new era of insurance \u2026 and a Digital Insurance<\/a> 2.0 insurer.<\/p>\n

\u201cPlatform and open API-based business models provide innovative companies speed to value, unique customer engagement, a test and learn platform for minimal viable products, and value-aligned optimized costs.\u201d<\/em><\/strong><\/p>\n

Defining a platform-based architecture isn\u2019t simple. It is best to break it into components to uncover how it works AND to grasp why it is so effective at accomplishing its role in today\u2019s insurance. The end result of its complexity is really a form of simplification \u2014\u00a0answering the need to adjust quickly, add functionality and data analytics that may not exist yet, and meet the needs of insurance customers with fluid ease and streamlined, multi-channel efficiency. With this in mind, let\u2019s attempt to answer some of the common questions surrounding platforms and look into some of the valuable secrets of successful platform design.<\/p>\n

What is the difference between traditional business models and platform models?<\/strong><\/p>\n

Traditional insurance business models have been centered on products, siloed processes and departments, backward-looking actuarial risk pricing, claims management and payment, and more. A digital insurance platform<\/a> breaks down these conventions and enables the creation of new and innovative digital insurance business models. This reinvention of the insurance business as a digital enterprise should result in customer-centric efforts, a reduction of silos, real-time pricing and an increase in forward-looking risk prevention.<\/p>\n

What is the secret to transforming a traditional architecture into a platform-based architecture?<\/strong><\/p>\n

The digital insurance platform is not a retrofit architecture. It is a complete redesign that fuses common capabilities across transaction processing, insights and engagement needs with a strong \u201cfind and bind\u201d integration architecture to tap into an ecosystem of innovative data and solutions. It is open to non-native components, supports rapid change to adapt to shifting industry needs, and allows for continuous innovation. It can generate analytics and calibrate the customer-centric solution without losing speed or increasing total cost of ownership. In short, it positions the insurer for market adaptability, innovation and most importantly, continued growth.<\/p>\n

A digital insurance platform is somewhat like a fusion reactor that effectively and safely conducts the molecular fusion of core transactional capabilities and innovative emerging technologies and InsurTech capabilities to provide exponential energy to the enterprise. The fusion occurs across four \u201cchambers\u201d that comprise Apps<\/strong>, Content<\/strong> (i.e. Data), Customer Experience <\/strong>and an EcoSystem<\/strong> of partners and capabilities (see Figure 1). In addition to these four chambers, there are four more unique \u201csecret ingredients\u201d that accelerate the power of the digital insurance platform, including microservices<\/strong>, APIs<\/strong>, cloud-native computing<\/strong> and AI and machine learning<\/strong>.<\/p>\n

Figure 1: The “Reactor Chambers” of the Digital Insurance Platform<\/h5>\n

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These components are increasingly being recognized by insurers as critical to achieving their strategic goals for cost, speed to market with new products, and improved customer experience. According to Celent, insurers understand that \u201cthe benefits they can derive from the cloud models are superior to their risks and costs,\u201d and that \u201cAPI integration and a Microservices-oriented architecture are the new state of the art in the industry.\u201d[i]<\/a><\/p>\n

The Four Chambers of Digital Fusion<\/strong><\/p>\n

To bring clarity to the core of the platform, we can discuss the \u201cchambers\u201d in the digital fusion reactor.<\/p>\n

Apps <\/strong><\/p>\n

Apps constitute the first chamber in the reactor. Digital Apps are known as systems of engagement, Analytics Apps are known as systems of insight, while Core Apps are the systems of record. In the traditional Insurance 1.0 business model it is common for each of these systems to be distinct and disparate, separated by line of business or function.\u00a0 In a digital insurance platform, however, apps do not operate within silos. They are exposed to each other so they can provide power through digital fusion.<\/p>\n

The power that comes through app fusion is specifically related to innovation and growth because it represents regular, ongoing innovation and improvement. Insights will fuel new methods and measures of engagement. Enhancements to engagement will create deeper knowledge and expanded growth.<\/p>\n

Content (Data)<\/strong><\/p>\n

Content is one of the underutilized assets in insurance but it is quickly becoming a strategic asset in the digital era. Content is no longer defined as that which is stored within the enterprise; it is all data that is accessible to the enterprise, including (but not limited to) the following:<\/p>\n