Insurance Claims Modernization
This case study represents a representative engagement based on our methodology. Client details are anonymized.
Key Results
Regulatory deployments: 6 months → 2 weeks
Claims processing throughput increased 3x
Absorbed acquisition volume with zero downtime
Compliance reporting became real-time
The Challenge
A specialty insurer processed claims through a 15-year-old monolithic application. Regulatory changes required 6-month development cycles, and the system could not support the volume from a recent acquisition.
The monolithic application had grown to over 2 million lines of code with deeply intertwined business logic, making any change risky and time-consuming. A single regulatory update — such as a new state filing requirement — required regression testing across the entire application because the claims, billing, and compliance modules shared code and database tables.
The recent acquisition of a smaller specialty carrier doubled the expected claims volume, but the monolith's batch-oriented processing architecture couldn't scale horizontally. During peak periods, claims processing queues backed up for days, and the system experienced frequent performance degradation that affected all users.
Regulatory pressure was mounting as well — the company had received a notice from a state insurance commissioner regarding delayed claims processing, creating urgency beyond normal business optimization.
Solution Architecture
We designed a domain-driven microservices architecture for claims processing with separate bounded contexts:
First, a Claims Intake Service handling initial claim submission, document management, and first-notice-of-loss processing. This service was designed for high throughput with asynchronous document processing and automated data extraction from submitted forms.
Second, a Claims Adjudication Service implementing the core business rules for coverage determination, liability assessment, and settlement calculation. Domain events enable regulatory rules to be updated independently per jurisdiction without affecting other components.
Third, a Payment Processing Service managing settlement payments, reserve calculations, and integration with banking systems. This service handles complex payment scenarios including partial payments, subrogation, and multi-party settlements.
Fourth, a Compliance and Reporting Service providing real-time regulatory reporting, audit trails, and state-specific filing capabilities. Decoupled from processing logic, this service can be updated for new regulatory requirements without touching claims processing code.
The strangler-fig migration strategy decomposed the monolith incrementally — new claims flowed through microservices while in-flight claims completed in the legacy system, ensuring zero disruption to active cases.
Implementation Timeline
The modernization was executed in four phases over 14 months:
Phase 1 — Domain Analysis and Architecture (Months 1-3): Comprehensive domain modeling with claims adjusters and compliance officers. Bounded context identification, event storming workshops, and architecture design. Development of the API gateway and event bus infrastructure.
Phase 2 — Claims Intake Migration (Months 4-7): Development and deployment of the Claims Intake Service. New claims routed through the microservice while the monolith continued processing existing claims. Integration testing with the legacy system for seamless handoff.
Phase 3 — Adjudication and Payment (Months 8-11): Adjudication and Payment services deployed with the strangler-fig pattern. Gradual traffic shifting from monolith to microservices with automated comparison testing to verify processing accuracy.
Phase 4 — Compliance and Decommissioning (Months 12-14): Compliance service deployment, regulatory testing with state filing systems, and final migration of remaining legacy functionality. Legacy system retained in read-only mode for historical data access.
Results & Impact
The claims modernization delivered transformative improvements across all key metrics:
Regulatory change deployment cycles were reduced from 6 months to 2 weeks. Because compliance rules are isolated in their own service with jurisdiction-specific configurations, a new state filing requirement now requires changes to only one bounded context, with automated testing validating the change against all other jurisdictions.
Claims processing throughput increased 3x through horizontal scaling of the microservices architecture. The system absorbed the acquisition volume with zero downtime and maintained consistent sub-second response times during peak processing periods.
Compliance reporting transitioned from batch (monthly) to real-time, with automated state filings and continuous audit trail generation. The regulatory notice was resolved, and the company received commendation for improved processing times.
The architecture now supports continuous deployment, with the team shipping updates multiple times per week compared to the previous quarterly release cycle.