There’s a better way to modernize insurance core systems. Enter vertical slice architecture—a modern approach to software design that enables insurers to transform their technology, launch new products and features faster, and deliver substantial business value.
For insurance carriers looking to modernize, vertical slice architecture can be a game-changer. It empowers teams to work independently, deploy faster, and respond to market demands without getting bogged down by legacy complexity.
In this article, we’ll dive into what vertical slice architecture is, why it’s more effective than traditional approaches like onion architecture, and how it can help insurance companies achieve true agility. We’ll also discuss what engineering teams need to know before adopting this architecture and provide practical steps for getting started, ensuring your organization is ready for its next big leap forward.
Vertical slice architecture organizes software by business requests, not technical layers. Imagine an architecture where software is organized around distinct business requests, not constrained by the traditional boundaries of layered architectures like n-tier or hexagonal structures. In this model, each "slice" is a self-contained unit that handles everything required to fulfill a specific request—from front-end interactions to database operations.
This contrasts with architectures like the onion architecture, which organizes code into rigid horizontal layers (e.g., UI, services, and data access layers). Instead of layering components, vertical slices couple functionality along the axis of change. Imagine needing to add or modify a feature. In a traditional layered approach, this might involve adjusting multiple components across different layers—tweaking the UI, altering model fields, refining validation logic, and so on. But with vertical slices, all these changes are contained within a single slice, minimizing impact on other parts of the system.
This approach offers several advantages. It eliminates the need for common abstractions like shared services or repositories often necessary in layered designs. While some shared elements might still be required due to tooling constraints, the goal is to minimize cross-slice logic sharing. Each slice is free to independently determine the best way to fulfill its request, making the system more flexible and easier to adapt as business needs evolve.
Monolithic structure: The onion architecture is built around concentric layers—UI, services, and data access—requiring developers to navigate through these layers for every change. This results in low cohesion, leading to a high learning curve as developers adhere to the law of demeter to achieve reusable code.
Dependency-heavy: It enforces strict separation of concerns, often leading to unnecessary abstractions (e.g., controllers that must talk to services, which then must talk to repositories). This rigidity increases complexity and slows down time-to-market.
High regression testing: Changing any business logic can have ripple effects across layers, increasing regression testing efforts and maintenance overhead.
Feature-driven: Organizes functionality by business use cases or requests, ensuring all the code related to a specific feature is contained within a single slice. This reduces interdependencies, allowing changes to be made without affecting other parts of the system.
Domain-Driven Design (DDD) and CQRS-friendly: Vertical slices align well with techniques like Domain-Driven Design and Command Query Responsibility Segregation (CQRS). Each slice can encapsulate its own domain logic, keeping commands (actions that change state) separate from queries (actions that fetch data).
Scalable and agile: Since slices are self-contained, they can be developed, tested, and deployed independently, reducing deployment cycles and enabling faster response to market changes.
For insurance carriers—especially those in complex commercial lines—modernizing technology systems can be daunting. Most insurers are burdened by legacy platforms that were never designed for today’s business needs. Here’s how vertical slice architecture can unlock significant benefits:
In the insurance space, speed is critical for adapting to changing regulatory requirements or launching tailored products. Vertical slices enable quicker development cycles since each slice is isolated and independent.
Real-World Example: An insurer looking to launch a digital self-service claims portal could develop a feature that enables the user to upload photos to a claim as a separate vertical slice. This allows changes to be made to that feature without disrupting the entire claims portal. By isolating this feature, insurers can quickly roll out updates based on customer feedback without affecting other parts of the system.
Many insurers struggle with technical debt from decades-old systems. Vertical slice architecture allows for incremental modernization by isolating and refactoring business capabilities one slice at a time. This reduces risk and makes the modernization journey manageable.
Bounded contexts: Using principles from Domain-Driven Design, vertical slices can be structured around bounded contexts, allowing teams to modernize sections of their system without a complete overhaul.
CQRS implementation: Vertical slices inherently support CQRS by separating commands and queries, making it easier to scale read and write operations independently.
Insurance carriers face constant shifts in customer expectations and regulatory changes. Vertical slice architecture enables rapid adaptation by focusing development efforts on the areas with the highest business impact, such as policy underwriting or claims automation.
Scalability: Individual slices can be scaled independently. For instance, during open enrollment periods or natural disaster claims surges, insurers can allocate resources to scale only the necessary slices, optimizing performance and cost.
Insurers can isolate customer-facing features into their own slices, making it easier to personalize user experiences. This allows for rapid experimentation and tailored services without overhauling the entire system.
Consistent experiences: By decoupling features, new digital interactions can integrate seamlessly with existing systems, ensuring a cohesive customer journey even as new capabilities are added.
While the benefits are compelling, a successful transition to vertical slice architecture requires alignment between engineering teams and business stakeholders. Here are key considerations:
Vertical slice architecture requires a shift from traditional thinking. Unlike onion architecture, where code is organized by technical layers, vertical slice architecture focuses on encapsulating all functionality related to a specific use case within a single slice.
DDD and CQRS mindset: Teams must understand how to apply principles like bounded contexts and CQRS to maximize the value of vertical slices. For example, separating commands and queries not only optimizes performance but also simplifies testing.
Each vertical slice represents a complete business capability, requiring close collaboration between developers, product managers, and domain experts. Engineering teams should be structured into autonomous squads that can own a slice from end to end.
Delivery Pipelines: Adopt DevOps practices like automated testing and continuous deployment to maintain the independence and reliability of each slice.
The flexibility of vertical slices aligns well with microservices and cloud-native environments. By containerizing slices using tools like Docker and Kubernetes, insurers can achieve greater scalability and fault tolerance.
At Praxent, we understand the unique challenges insurance companies face when modernizing their technology. Our team of senior enterprise architects has extensive experience guiding carriers through digital transformations. By leveraging vertical slice architecture and other modern architecture practices, we help insurers:
Accelerate product launches by breaking down monolithic systems into agile, independent slices.
Optimize legacy system refactoring to reduce technical debt and improve operational efficiency.
Enhance customer experience by enabling rapid innovation and personalized digital interactions.
Whether you're looking to modernize your policy administration system, optimize claims processing, or launch new digital channels, Praxent is your partner in creating scalable, future-proof solutions.
Vertical slice architecture is an ideal approach for insurance companies seeking to modernize their technology stack while maintaining agility and delivering customer value. By embracing this architecture, insurers can reduce complexity, accelerate product development, and better align technology with their business goals.
Praxent is here to guide your organization through this transformation, ensuring your systems are built to adapt to the ever-changing insurance landscape. Contact us today to get started on your modernization journey.