Insurance Cliam System with Microservices and Azure Cloud

🔍 Use Case: Insurance Claims Processing System

Microservices in Scope:

1. Policy Management Service

2. Customer Management Service

3. Claims Processing Service

4. Notification Service

5. Payment Service

6. Underwriting Service

7. Audit Logging Service

🏗️ High-Level Architecture Components on Azure

🚀 1. Microservices Deployment on AKS (Kubernetes)

Each service is:

• Containerized via Docker.

• Deployed to Azure Kubernetes Service (AKS).

• Communicates via Istio Service Mesh (provides mTLS, retries, circuit breakers).

• Uses Helm charts for Kubernetes deployment.

  
  

🔐 2. Security

• Azure Active Directory (Azure AD) used for user and service authentication.

• Istio mTLS secures service-to-service communication.

• Azure Key Vault for secrets, certificates, and credentials.

• API-level authentication via Azure API Management + Azure AD tokens (OAuth2.0).

  
  

🔄 3. Kafka Integration

• Azure Event Hubs for Kafka is used to process events between microservices:

  • Claims Processing emits events to Kafka (e.g., CLAIM_SUBMITTED).

  • Notification & Audit Services consume Kafka topics.

    
    

🧩 4. Azure Services Integration

Azure Service	Role
Azure SQL	Relational database for persistent microservices data (e.g., Policy, Customer, Claims)
Azure API Management	Gateway for external/internal APIs with policies, throttling, and analytics
Azure Traffic Manager	DNS-based global traffic routing across regions
Azure VNet + NSG	Network isolation and security
Azure Container Registry	Secure container image storage
Azure Monitor + Log Analytics + Application Insights	Logs, metrics, tracing
Azure Key Vault	Secret management
Azure DevOps	CI/CD pipeline to build, test, scan, and deploy microservices to AKS

🔁 Microservices Flow within AKS (w/ Kafka and Istio)

Scenario: Claim Submission & Processing

yaml

[User]

|

v (OAuth 2.0 via Azure AD)

[Azure API Management]

|

v

[Istio Ingress Gateway]

|

v

[Claims Processing Service] ---> Kafka: 'claim-submitted'

| |

| v

| [Notification Service]

v |

[Underwriting Service] Email/SMS

|

v

[Payment Service] ------> [Azure SQL (Payment DB)]

|

v

Kafka: 'payment-success' -----> [Audit Logging Service]

🔧 CI/CD Flow with Azure DevOps

1. Dev Commit triggers pipeline:

2. Build Stage:

   • Docker image creation

   • Run unit tests, static code analysis (e.g., SonarQube)

   • Push image to Azure Container Registry (ACR)

3. Deploy Stage:

   • Helm chart deployment to AKS (with versioning)

   • Istio VirtualService, Gateway, DestinationRules applied

   • Secrets injected from Azure Key Vault

4. Post-Deploy Stage:

   • Run integration tests

   • Azure Monitor alerts set

   • Slack/Teams notifications

     
     

🔐 Security Layers

• User AuthN via Azure AD

• API AuthZ via API Management

• Istio mTLS for service-to-service encryption

• Role-based access in Azure DevOps

• AKS + Key Vault integration for secrets

  
  

📈 Monitoring & Observability

• Azure Monitor: Metrics (CPU, memory)

• Log Analytics: Logs from services + AKS nodes

• Application Insights: Tracing, exceptions, dependency calls

• Grafana (optional): For Istio and app dashboards

  
  

📊 Architecture Diagram (High-Level)

🧩 Enterprise-Level Risk Matrix with Mitigation Plans

🔷 1. Business Risks

Risk	Description	Mitigation Plan
Regulatory Compliance Changes	New/updated insurance laws or IRDAI regulations can impact processes	Continuous compliance monitoring, legal advisory board, automated policy enforcement in CI/CD
Customer Trust Erosion	Security breaches or downtime reduce customer confidence	Transparent comms strategy, real-time incident monitoring, zero-trust architecture
Revenue Leakage	Inaccurate policy processing or claims approvals	Auto-validation rules, audit trails, reconciliation jobs

🔷 2. Technology Risks

Risk	Description	Mitigation Plan
Azure Cloud Service Downtime	Service interruptions in Azure (e.g., AKS, SQL)	Multi-region deployments, Azure Traffic Manager, backup & DR plan
Kafka or Istio Failures	Messaging breakdown or service mesh misconfig	Auto-scaling, Helm health probes, alerting with Azure Monitor and Prometheus
Container Image Vulnerabilities	Unpatched libraries can open attack vectors	Container scanning (Trivy, Azure Defender), signed images, ACR policies

🔷 3. People Risks

Risk	Description	Mitigation Plan
Skills Shortage	Lack of expertise in cloud-native, security, Istio, etc.	Regular upskilling programs, Azure/CKA certifications, internal CoEs
Knowledge Silos	Key dependencies on specific team members	Internal wikis, backup owners for critical services, peer code reviews
High Attrition	Talent loss leading to project delays	Retention incentives, shadowing strategy, succession planning

🔷 4. Operational Risks

Risk	Description	Mitigation Plan
CI/CD Failures	Pipeline bugs causing failed deployments	Canary/Blue-Green deployments, rollback policies, gated approvals in Azure DevOps
Performance Bottlenecks	Latency under high load or during peak seasons	Load testing (k6, JMeter), autoscaling, caching layers
Lack of Observability	Gaps in logs, metrics, or traces	Full-stack monitoring: Azure Monitor, App Insights, OpenTelemetry-based tracing

🔷 5. Security Risks

Risk	Description	Mitigation Plan
Unauthorized Access	Improper authentication/authorization	Azure AD with RBAC, OAuth2.0 for APIs, mTLS via Istio
Data Breach	Sensitive PII data leak or theft	Azure Key Vault, data encryption at rest & transit, API Gateway security
Insider Threats	Misuse of elevated privileges by internal users	Zero-trust policy, Just-In-Time access, activity logs & audits via Azure Monitor

🔷 6. Compliance Risks

Risk	Description	Mitigation Plan
Non-compliance with IRDAI or GDPR	Failure to meet data storage, access, or audit mandates	Data classification, consent management, audit logs, DLP policies
Incomplete Audit Trails	Missing user activity or access logs	Use Azure AD logs, centralized logging with Log Analytics, 7-year log retention
Policy Drift	Deviation from compliance policies in Dev/QA/Prod	GitOps model for policy enforcement (OPA/Gatekeeper), automated compliance scans in CI/CD

🌐 1. Business Vision (Strategic Objectives)

Objective	Description
✅ Customer-Centric Insurance	Provide personalized insurance products and seamless claim services
🚀 Digital-First Operations	Fully digitize onboarding, claims, policy management using cloud-native tech
🛡️ Compliance & Security Excellence	Ensure data security and full compliance with IRDAI, GDPR
📊 Data-Driven Insights	Leverage AI/ML to optimize underwriting, detect fraud, and segment customers
🔄 Operational Efficiency	Reduce turnaround time and manual touchpoints via automation and workflows

🧩 2. Enterprise Capability Map

Capability Domain	Core Capabilities
Customer Engagement	Customer Onboarding, KYC, Profile Management
Policy Lifecycle	Policy Quotation, Issuance, Renewal, Endorsement
Claims Management	FNOL (First Notification of Loss), Claim Adjudication, Settlement
Underwriting & Risk	Rule-Based Risk Scoring, AI-Driven Underwriting
Payments & Finance	Premium Payment, Claim Payout, Invoicing, Reconciliation
Compliance & Audit	Regulatory Reporting, Policy Validation, Audit Logging
Communication	Notifications, Document Delivery, Omnichannel Messaging
Analytics & Insights	Risk Segmentation, Product Optimization, Operational KPIs

🔄 3. Capability-to-Microservices Map

Business Capability	Mapped Microservices
Customer Onboarding	Customer-Service, KYC-Service, Identity-Service
Policy Management	Policy-Service, Quotation-Service, Renewal-Service
Claims Handling	Claim-Service, FraudDetection-Service, Investigation-Service
Underwriting	Underwriting-Service, RiskScoring-Agent, AI-Model-Service
Payments	Payment-Service, Ledger-Service, Reconciliation-Service
Compliance & Audit	AuditLog-Service, ComplianceMonitor-Service
Notifications	Notification-Service, Email-Gateway, SMS-Gateway
Reporting & Analytics	Analytics-Service, Data-Export-Service, BI-Adapter-Service

🔌 4. Capability-to-Technology Map

Capability	Enabling Technologies (Azure & Tools)
Customer Onboarding	Azure AD B2C, Azure API Management, Azure SQL, Azure Blob Storage
Claims Processing	Azure Kubernetes Service (AKS), Kafka (Event Hubs), Azure Functions
Underwriting	Azure ML, Azure OpenAI (optional), Cosmos DB for feature store
Notifications	Azure Communication Services, Twilio Integration, Azure Event Grid
Payments & Reconciliation	Azure SQL, Azure Logic Apps, Azure Key Vault, Service Bus
Compliance	Azure Policy, Azure Monitor, Azure Security Center, Key Vault
Audit Trail & Logs	Azure Monitor Logs, Log Analytics, Application Insights
BI & Analytics	Azure Synapse, Azure Data Factory, Power BI, Data Lake Gen2

:

🧭 1. Business Vision for Claim Processing

Strategic Objective	Description
🎯 Customer Delight	Minimize claim settlement time to improve customer satisfaction
🚀 Digital Automation	Fully automate claim intake, adjudication, and payout
🔍 Fraud Detection	Identify and mitigate fraudulent claims using AI/ML
🧩 Operational Efficiency	Reduce manual processing via workflow orchestration
🛡️ Compliance-First	Ensure adherence to regulatory standards (IRDAI, GDPR)

🧩 2. Enterprise Capability Map (for Claims)

Capability Domain	Business Capabilities
Claim Intake	FNOL (First Notification of Loss), Document Upload, Case Initiation
Claim Adjudication	Validation, TPA Coordination, Medical/Surveyor Assessment
Claim Approval	Rules Evaluation, Risk Scoring, Approvals Management
Fraud Detection	Pattern Detection, Anomaly Scoring, Blacklist Checks
Claim Settlement	Payment Processing, Tax Calculations, Notifications
Customer Communication	Status Updates, Omnichannel Messaging, Feedback Collection
Audit & Compliance	Audit Logs, SLA Validation, Regulatory Reporting
Analytics & Insights	Cycle Time Metrics, Settlement Trends, Agent Performance

🔄 3. Capability-to-Microservices Map

Business Capability	Mapped Microservices
FNOL Submission	Claim-Intake-Service, Customer-Service, Document-Service
Claim Validation	Claim-Validation-Service, TPA-Service, Surveyor-Service
Rules & Risk Evaluation	RuleEngine-Service, RiskScoring-Agent, FraudDetection-Service
Approval Workflow	Approval-Service, Workflow-Orchestrator, AuditLog-Service
Settlement Processing	Payment-Service, Finance-Integration-Service, Notification-Service
Customer Communication	Email-Service, SMS-Gateway, Chatbot-Service
Reporting & Compliance	Compliance-Service, Report-Generator, AuditLog-Service
Analytics & Feedback	Analytics-Service, Feedback-Service, BI-Adapter-Service

🔌 4. Capability-to-Technology Map

Capability	Azure / Tech Stack
Claim Intake	AKS, Azure Blob Storage, API Gateway, Azure AD B2C, Azure API Management
Document Management	Azure Blob Storage, Azure Cognitive Services (OCR), Azure Functions
Risk & Fraud Detection	Azure Machine Learning, Azure OpenAI, Azure Databricks, Cosmos DB
Workflow & Orchestration	Azure Logic Apps, Durable Functions, Camunda on AKS
Approvals & Audits	Azure SQL, Azure Key Vault, Azure Monitor, Azure Policy
Payment Settlement	Azure SQL, Azure Service Bus, Azure Logic Apps, Azure Key Vault
Customer Communication	Azure Communication Services, Azure Event Grid, Azure Bot Service
BI & Analytics	Azure Synapse, Azure Data Lake, Azure Data Factory, Power BI
Security & Identity	Azure AD, RBAC, mTLS with Istio, Azure Defender for Cloud, Key Vault
Monitoring & Compliance	Azure Monitor, Log Analytics, Application Insights, Azure Policy