Introduction
The insurance industry is undergoing a fundamental shift. Once dominated by rigid, monolithic systems and lengthy development cycles, insurers are now embracing modular architectures and intelligent automation, powered by business process management software and modern rules engines to meet the demands of a fast-changing, hyper-personalized market.
At the core of this transformation are two technological drivers: microservices and decision engines. Together, they enable insurers to deconstruct traditional systems, reassemble them with flexibility, and empower business teams to launch, adjust, and personalize products faster than ever before. This article explores how these technologies are revolutionizing insurance, with insights drawn from real implementations across top European insurers.
From Rigid Monoliths to Agile Ecosystems
Traditional insurance systems have historically been built as large, interdependent monoliths. Product rules, pricing logic, and business workflows were often hardcoded deep in the system, requiring costly and time-consuming development efforts for every change.
As customer expectations and regulatory requirements began evolving more rapidly, this model became unsustainable. Insurers needed a faster, more adaptable way to manage products and processes, something only modern business process management software and rules engines could offer.
Microservices emerged as a critical enabler of this shift, allowing IT departments to break large systems into smaller, independently deployable units. Meanwhile, rules engines (also called decision engines) decoupled decision logic from application code, placing control directly in the hands of business users.
The result? Insurance companies gained flexibility in product configuration, compliance response, and hyper-personalization, all crucial for calculating insurance premiums dynamically and adapting offers in real time.
The Role of Decision Engines in Insurance
A decision engine or rules engine acts as the brain behind automated decision-making processes. It enables insurers to define, test, and manage complex business logic using intuitive tools like decision tables, flows, and rule sets. These can cover everything from calculating insurance premiums to eligibility checks and automated claims processing.
Key benefits of rules engines include:
- Faster time to market: Logic changes can be implemented in hours.
- Business-user autonomy: Product managers can configure pricing, underwriting, and logic flows.
- Versioning and auditability: Transparent change history for compliance.
- Real-time processing: Integration with core platforms for instant decision-making.
Case Study: Warta
As part of the Talanx Group, Warta is one of Poland's largest insurers. Before adopting a decision engine, Warta relied on Excel and hardcoded logic, making every product change a development-heavy task.
The adoption of the Higson rules engine revolutionized their process. All rules related to calculating insurance premiums, eligibility, and product variations were centralized in one layer, fully integrated with the company’s business process systems.
Outcomes included:
- Real-time premium and installment plan calculations.
- Instant rule deployment for product launches.
- Seamless updates aligned with regulatory frameworks.
- Empowerment of business users to manage configuration autonomously.
Case Study: InterRisk
InterRisk TU SA (Vienna Insurance Group) modernized its digital backbone by implementing the IRON platform, based on microservices and integrated with the Higson decision engine.
Key highlights:
- Used as a core component in a modular business process management software stack.
- Manages decision-making for product eligibility and logic.
- Offers REST-based integration with distributed services.
- Empowers non-technical staff to edit and test logic safely.
This allowed InterRisk to launch product updates more rapidly and personalize offerings across channels.
Performance at Scale: What Makes It Possible
For real-time operations, decision engines like Higson are optimized for speed and scalability, vital for executing millions of rules, especially for calculating insurance premiums across various product lines.
- Sub-millisecond rule execution.
- 9,000+ API requests per second.
- Memory optimization and faster deployments.
- Integration with external models and services via APIs.
Microservices: The Infrastructure Behind Agility
Microservices form the structural backbone that allows rules engines to deliver maximum value. In both Warta and InterRisk, microservices handled discrete business functions: claims, policies, pricing, while communicating with the rules engine to process logic in real time.
- Independent deployment of services.
- Scalable architecture for peak demands.
- Seamless integration with logic rules and pricing engines.
Hyper-Personalization in Practice
Insurers today are tailoring products to the micro-level: specific behaviors, real-time signals, and contextual data. This level of personalization wouldn’t be possible without rules engines and business process management software working in tandem.
Applications include:
- Dynamic risk-based pricing.
- Regional and behavioral eligibility rules.
- Context-driven promotional offers.
- Configurable product templates for specific demographics.
Empowering Business Users
Modern tools empower insurance professionals, not just developers, to define and manage decision logic. The result is faster adaptation and reduced IT dependency.
Key enablers:
- Excel-like interfaces for decision tables.
- Integrated testing suites.
- Role-based access and change tracking.
- Intuitive tools to configure insurance calculations and workflows.
Modular Governance and Compliance
Complex insurance ecosystems demand governance. Business process management software with built-in rule versioning, audit logs, and test environments ensures compliance with legal frameworks like GDPR and supervisory audits.
Benefits include:
- Rule rollback and traceability.
- Safe sandbox testing.
- Audit logs for regulators.
- Structured deployments tied to effective dates.
Toward an AI-Enhanced Future
Rules engines are now integrating with AI models to support hybrid decision-making. Higson, for instance, is evolving with features like:
- Visual flow editors.
- Runtime model integrations for fraud detection or predictive scoring.
- Real-time recommendations within workflows.
This merger of deterministic and probabilistic systems is redefining how insurers make decisions, particularly in areas like risk profiling and dynamic customer segmentation.
Conclusion
The transformation from monolithic legacy platforms to modular systems powered by microservices, business process management software, and rules engines marks a new era in insurance.
Key advantages for insurers include:
- Rapid product launch and adjustment cycles.
- Enhanced personalization at scale.
- Autonomous configuration by business teams.
- Regulatory compliance and audit-readiness.
- AI integration for advanced decision-making.
By embedding technologies like Higson into core operations, companies such as Warta and InterRisk are leading the way in digital insurance innovation. And as calculating insurance becomes more complex and real-time, those embracing modularity and automation will be best positioned to thrive.