Case Study: Developing a Workers’ Compensation Insurance Solution

Industry: InsurTech / FinTech
Location: Washington, DC, the U.S.
Project duration: March 2020 – Ongoing.
Size of the project team: 14 experts.
Software products delivered: Custom billing system, Operational Data Maintenance (ODM) platform, the integration of a Policy Management application (handles the policy lifecycle from policy creation to its termination or prolongation), the development of a self-service application for end customers with a personal cabinet, and related integration.
Expertise delivered: Software Architecture Design, Custom software development, automated Quality Assurance services, Maintenance and Support, Data Engineering.

Challenge

Our client, Pie Insurance, is a U.S. workers’ compensation insurance company that caters nationwide for SMPs in an extensive range of industries, including auto shops, barber shops, beauty and spas, hotels, caterers, and many others. The company provides workers’ comp coverage through a simple online experience, enabled by a custom-built software platform they launched in 2018.

The Pie Insurance platform offers SMPs’ employees financial and legal protection by covering illness, injury, disability, and death benefits. It allows one to get an online quote in just 3 minutes and calculate a coverage that creates 30% savings for the client as compared with the other options.

At the time Pie Insurance approached us for assistance with insurance software development, they used a 3d-party legacy billing system that hampered business growth. The company wanted to completely redesign their billing service to increase the number of users that choose ACH payments over other payment options. This was going to eliminate any payment delays that lead to the termination of insurance for users in some of the U.S states. Additionally, the client wanted to develop an Insurance Policy Management application and implement more payment options and improve the platform’s UX by expanding its self-service functionality with a personal cabinet.

Pie Insurance approached SPD Technology to implement the project through a referral by their CTO, Mr. Mike Gionfriddo, who had previously worked with us for 6 months when he was with our eCommerce client BHN.

Solution

To implement the project, SPD Technology assembled a project team that consisted of 3-14 team members during the project’s different stages (the largest team we’ve had in the project included 1 Project Manager, 10 software developers, 2 Automated QA engineers, and 1 Business Analyst).

The project team has been managed by our Project Manager.

Building Operational Data Management application

As the data Pie Insurance’s applications use is retrieved from multiple disparate sources like spreadsheets or CSV files and needs to be constantly updated, we started by building an Operational Data Maintenance (ODM) that allows performing these operations seamlessly and quickly.

Building the Billing System

Prior to kicking off the development, we extensively interacted with the client’s business stakeholders to define the requirements for their billing system to be developed. Based on the results of the research, our software architects design the software architecture for the solution.

The Billing System we’ve built from scratch allows creating, updating, and customizing billing plans, including payroll reporting plans. It makes it possible to record, track, and report on all the premium billing, payment plans, and payments received. In addition, the billing system allows Pie Insurance to correctly track and report on each policy’s equity. It performs automatic policy cancellation in accordance with equity calculations. Also, as each of the U.S. states has different regulatory cancellation-related rules, the system also tracks non-payment cancellations.

In order to accurately pay commissions, the client’s billing system tracks all the premium payments, made by customers. It differentiates between the premium paid and taxes, surcharges, and fees.

Overall, the system we’ve delivered can:

• Process all billing installments for all policies.
• Process and post all payments.
• Calculate equity.
• Trigger non-payment cancellation.
• Work with multiple payment plan options (globally).
• Provide Policy Ledger information.
• Generate reports by customer group.
• Provide transactional data at the agent level.
• Communicate with PMS to handle cancellation.

Creating an integration with the client’s Insurance Policy Management application

Taking into account the system’s intricate business logic, we’ve performed the integration of the services we’ve developed with the client’s Insurance Policy Management application. The application takes into account a diverse multitude of factors and allows for the regional differences in the insurance policy management rules in the different U.S. states. The application allows creating new and modifying existing insurance policies.

Creating an online user account (personal cabinet)

In addition to the ODM platform and the Billing system, SPD Technology’s project team has developed a self-service application for end customers with an online user account for the Pie Insurance platform. This part of the project also included integrating the developed personal cabinet functionality with the billing system and a payment provider.

Technical and Other Project Challenges

In implementing the project for Pie Insurance, SPD Technology’s project team has encountered an array of challenges, some of which were quite formidable.

Each of the U.S. states has its own rules for calculating the cost of insurance and its own insurance rates that serve as two different criteria for calculating the policy premium amount. These rates need to be updated annually and have different formats. Because of this, we needed to consolidate, simplify, and automate the process of adding the insurance rates to the system, while also taking into account all the related regional differences. This data consistency challenge created the need for developing the ODM platform.

In accordance with the client’s preferences, we were to use a predefined technology stack. Also, our project team had to conduct a significant amount of additional research into the client’s business needs, as their use of an external billing system resulted in their business stakeholders having very little idea about the way their new billing system should function. To aggravate, the client’s external billing provider shared no details on how exactly their billing system worked.

Due to the complexity of the functionality, many of the billing system services had to be architected and built using components. Most of these components had their own domain model.

Lastly, one more significant project challenge was taking into account the numerous regional differences during the development of the Insurance Policy Management application, like, for instance, the varying insurance policy opening and closing rules in the different U.S. states.

Currently, SPD Technology’s project team is working on enhancing the solution’s ODM platform.

Technical Solution

SPD Technology’s project team has been using the following tech stack in implementing the project:

• Languages: C#, Python (testing), F# (msg def/comparisons), Golang (some lambdas), JavaScript, React.js.
• Datastore: MongoDB, SQL (Insurity updates), Postgres (Heroku Connect)
• Infrastructure: AWS / Jenkins pipelines
• CI/CD/CT: AWS CodePipeline, Jenkins (builds), Nexus (artifact repo), Octopus (deploy)

Methodology, Tools

• Scrum / Jira

Result

Implementing the project has allowed Pie Insurance to dramatically improve their mission-critical insurance platform that is now able to freely support their growing business needs. It has helped the client achieve several major business goals.

More specifically, the solution has increased the number of users who choose ACH payments by a factor of 3, thus solving the problem of insurance policies’ termination because of payment delays. Also, eliminating the need to investigate the reasons for payment failures has created 40%-time savings for the client’s Customer Success team.

The online account functionality we have developed has significantly improved the application’s UX. Implementing installment payments has made it a lot easier to onboard customers, while adding more payment options has increased the amount of the average check by 30%.

“Shortened ramp-up time speaks to the institutional knowledge the SPD Technology’s team has developed over the course of the relationship. Their perseverance and ability to solve problems have served them well in acclimating to a new, complex project. Future customers will encounter a committed partner.”

— Jeremy Buch, Principal Software Engineer, Pie Insurance