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Should Your Next Core System Implementation Be Headless?


Chuck Ruzicka

Carriers, from MetLife to startup pet insurer FIGO, have been going headless, i.e. implementing new digital insurance products that leverage underlying commercially available core systems with their own user interfaces. Carriers are looking to provide a differentiated user experience, and they are realizing that headless implementations on top of modern core systems can give them speed to market and reduce the work required to implement self-service portals.

Traditional Portal Options: Build vs. Buy
One of the most attractive aspects to a “build” approach for consumer portals is the perception of lower implementation costs due to full ownership and zero license fees, though cost of design and legacy system integration is often underestimated. Buying or licensing pre-built software provides the convenience of accelerators and predefined architecture; however, carriers also cede some control over UI and customization. Another option with vended solutions is to extend core systems via role-based security. This option reduces complexity, but it often results in a less than desirable user experience and does not support direct integration with agency management systems and comparative raters.

Carriers Go Headless
Headless implementations extend services of the core system to enable self-service and combine the best aspects of both building and buying. Insurance transactions are basic and not differentiators, and core systems do these well. These platforms are reliable and scalable, and calling proven services both maximizes reuse and allows carriers to support multiple channels. Going headless gives carriers control over UI, providing differentiation and lower maintenance costs by eliminating the need to support a heavier portal application.

Carriers choosing to implement a new digital product can often accelerate the process by freeing themselves from the webpages and navigation used for other products supported within the same organization. While the rest of the organization uses the existing UI, changes can rapidly be made to the UI for the new digital product while still leveraging the same back-end services.

Solution Architectures Are Moving to Support a Headless Approach
Increasingly, solution providers are building out microservices to enable flexibility, improve reuse within their own solution set, and address concerns voiced by carriers over the difficulty of accessing functions with legacy systems. Few solution providers have a full set of microservices, but the granularity and availability of services is rapidly increasing.

Some solution providers have realized that microservices can increase complexity and create IT systems management issues. Consequently, a few solution providers are developing solutions to facilitate management of microservices and extension of carriers’ core systems to third parties in their eco-system.

Looking Forward
Will the complexity of these microservices lead to improved customer experience, increases in service management issues, or lower IT costs? Time will tell. But, in the short term, headless implementations are often closely correlated with improved product agility and speed to market. It is unlikely that we will see policy administration systems devolve into collections of services that can be bought independently; however, it is possible that core system replacements will become significantly less painful as replacing or adding services occurs more frequently and with less effort than full PAS replacements.

For more on consumer portals, see Novarica’s recent report, Best Practices for Customer Portal Implementation.

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About Chuck Ruzicka

Chuck Ruzicka is a Vice President of Research and Consulting at Novarica. Prior to joining Novarica he served in a series of senior technology management positions at major insurance and financial services firms and has most recently been an independent consultant. His prior experience includes Liberty Mutual where he was CIO /SVP of their Agency Markets division and subsequently responsible for global infrastructure software and security. Chuck also was CIO at several regional insurance companies and was Vice President at Progressive Insurance where he was responsible for financial system architecture, billing, divisional policy and financial systems. Chuck holds an MBA in Finance from the Ohio State University. He can be reached directly at