40% of P&C Insurers Implementing/Planning PAS Replacement
While the number of legacy systems in operation continues to decrease at a significant rate, there has been very little improvement in the overall success rate of policy administration replacement projects, according to new survey results from Strategy Meets Action.
Perhaps in response to these continued challenges — for a list of the 10 most-cited pain points by P&C insurers for policy administration replacement projects, click here — a remarkable number of insurers” are looking into cloud-based systems, which range from SaaS solutions to hosted policy systems maintained in the cloud.
The new research, titled “Policy Administration: P&C Plans and Priorities,” is the result of interviews of 121 P&C insurers conducted this spring, 40 percent of which indicate that they’re currently involved in either PAS implementation or the vendor selection/planning phases of replacement.
When broken down by P&C segments, personal and specialty lines have the most advanced state of PAS systems, with a significant percentage reporting that they have modern/current systems, 31 and 30 percent, respectively. Personal lines was also noted for having the lowest average number of PAS solution in production per insurer: 1.7.
While workers’ comp came in second with 1.9 PAS systems in use per insurer, it also suffers the highest percentage of legacy environments, with 33 percent of insurers indicating they are still using legacy systems.
Larger insurers (writing more than $1 billion in direct written premiums) have much higher averages when it comes to number of systems in production as well, which the report cites as a likely result of M&A.
SMA points out that none of the large insurers it surveyed had more than 10 systems for any one line of business.