In 1861, 500 houses burned in the Swiss town of Glarus leaving 3,000 people homeless. Inadequate insurance compounded the catastrophe, sparking the creation of the Swiss Reinsurance Company of Zurich, now known as Swiss Re. Since then, Swiss Re has become one of the largest global wholesalers of reinsurance, with a mission to help make the world more resilient to disaster. Recognizing that resilience requires finding new business models, Swiss RE is transforming the insurance industry with digital technologies.<\/p>\n
When Swiss Re started in 1863, the global population was approximately 1.2 billion. Today, the population has ballooned to more than 7 billion people, many of whom live in crowded urban centers. But although more people are living in physical proximity, personal interaction has taken a less intimate turn. People socialize, shop, and work remotely using mobile devices, and business contracts are more likely to be digital than paper-based. The changes are affecting all areas of life, including the insurance industry.<\/p>\n
Although most of the company\u2019s business is based on traditional reinsurance models, in recent years the firm has looked for ways to diversify its offerings. Reinsurance is sold to insurance companies to protect them from loss, and Swiss Re\u2019s reinsurance business focuses on large contracts that renew annually. Swiss Re decided to explore a different approach and create a new microservices model based on small, single risks with a fully automated consumer journey. And because the company has a stake in the aviation industry and a strategic partnership with FlightStats and its parent company, FlightGlobal, that seemed like a good place to start. FlightStats, a leading global provider of flight data, could provide Swiss Re with real-time information on flight status, departures and arrivals, and more.<\/p>\n
A small team in the Swiss Re Property and Casualty division began exploring options. \u201cWe checked if there was anything like our idea on the market,\u201d says Gianni Biason, Head of Product Center, Aviation Reinsurance at Swiss Re. \u201cThere were a few local products but nothing that could be used on a worldwide basis.\u201d<\/p>\n
To collect flight insurance, passengers typically need to file a claim and wait for reimbursement. Swiss Re wanted to create a simpler process that could be offered by airlines, travel agents, and other partners as a value-added service. \u201cWe realized it could be the basis for the first fully automated insurance product, which was really interesting,\u201d says Lukas Steinmann, Project Team Manager at Swiss Re. \u201cWe also saw an opportunity to show the market that we\u2019re a company focused on knowledge and innovation.\u201d<\/p>\n
The team asked J\u00fcrg Staub, Head of Technical Architecture for Property and Casualty at Swiss Re, for his recommendation. \u201cThey asked for a flexible solution that wasn\u2019t hosted on-premises and that could be deployed globally,\u201d says Staub. \u201cAnd to stay close to business operations, they also wanted to enable a modern DevOps workflow that included continuous integration. These requirements led to a clear conclusion that the solution had to be based in the public cloud.\u201d<\/p>\n
Swiss Re issued a request for proposal (RFP) to multiple companies. \u201cWe investigated a lot of companies including IBM, local vendors, and Microsoft,\u201d says Alan Wales, Senior Solution Architect, Property and Casualty at Swiss Re. \u201cMicrosoft came and gave us a presentation on Azure. It was exactly what where were looking for.\u201d<\/p>\n
Affordability and agility were both strong motives for choosing Azure\u2019s platform-as-a-service (PaaS) offerings. \u201cA high-transaction, low-margin business is new for our company, and we can\u2019t invest thousands of dollars on a database server to support the venture,\u201d says Staub. \u201cOur on-premises solutions are expensive, and they\u2019re good for complex, large deals, but they aren\u2019t so good at handling fast transactions with low margins. We needed a very scalable, cost-effective PaaS environment, and that\u2019s what Azure provided.\u201d<\/p>\n
After Swiss Re created a working prototype, the next step was cloud implementation. The team used Visual Studio Team Services to work remotely with Codit, a Microsoft partner with deep expertise in cloud technologies. Every step from build to deployment is fully automated. The continuous integration pipeline deploys new features up to six times daily and bombards the system with more than 1 million API requests each day.<\/p>\n
\u201cWe\u2019re using Visual Team Services with Azure for continuous integration and deployment,\u201d explains Wales. \u201cWe\u2019re able to process millions of micro-insurance policies concurrently, so we\u2019re quite confident going into production that our system can scale, and that it\u2019s fast and accurate. All the tests run automatically, and we use real flights, quotes, orders, and claim handling, so we know the product is stable.\u201d<\/p>\n
The project took just eight months from concept to launch, including four months of development time. The PaaS platform\u2014which includes Azure App Service, Azure API Management, and Azure SQL Database with elastic pool\u2014speeds implementation for both Swiss Re and its customers. Wales says, \u201cThis is something brand new for Swiss Re, and we were able to get up and running very quickly, expose our APIs, and deliver a product that is very easy for others to consume and onboard.\u201d<\/p>\n
Simplified management is another important capability. \u201cAzure SQL Database with elastic pool is a very convenient way to manage sharded or partitioned databases,\u201d says Wales. \u201cWe have a lot of experience with Oracle, PostgreSQL, and other databases, and they can be hard to manage in a sharded way. But with elastic pool, it\u2019s very simple to share databases across a resource set.\u201d<\/p>\n
In the company\u2019s on-premises environment, project teams typically include specialized IT staff such as database analysts. But that changed with Azure. Wales says, \u201cWith Azure SQL Database, developers start and manage the service. Getting this kind of elastic, sharded environment working without Azure would have been very difficult.\u201d<\/p>\n
Swiss Re offers its delayed flight insurance service to any business that books flights, including airlines and travel agencies. The service integrates with existing websites so that a passenger can buy a ticket and purchase insurance at the same time. Then, the Swiss Re system monitors the flight with its partner FlightStats and automatically reimburses the passenger if it\u2019s delayed. Most policies are settled within an hour of the flight landing. Swiss Re is working on more new features, including an integrated payment system and an enhanced pricing engine.<\/p>\n
By launching a new service on Azure, Swiss Re gained a platform for ongoing innovation. \u201cWe\u2019re creating a digital platform on Azure, and people see it as the foundation for a lot of new projects in the company,\u201d says Wales. \u201cWe\u2019ve identified multiple areas that are functionally similar across projects, and when you break down applications that way, you start seeing a tremendous amount of code reuse. With Visual Studio Team Services, we can share packages across all projects at Swiss Re\u2014there\u2019s nothing but an upside to this.\u201d<\/p>\n
Other projects are already underway. \u201cWe are getting more attention from other teams. Flight delay is one project, and an even bigger one has started in the IoT space,\u201d says Staub. \u201cWith Azure, we can use the same platform and best practices, and I think what surprises people most is how far they can get in a very short time.\u201d<\/p>\n
Read more on the Microsoft Banking & Capital Markets <\/a>and Insurance<\/a> blogs.<\/p>\n