Given
The two reports profile a total of 45 policy admin systems. The majority of the profiled vendors have issued a major new release—an upgrade to the technology platform broadened the range of functionality, or both—since 2007. Essentially all vendors have made a major investment in enabling their solution to work in an insurer’s SOA environment, according to the Celent reports. Many solutions also have made important advances in usability and personalization, with benefits for new and experienced underwriters and service representatives.
The reports also remind insurers what’s important in a policy admin system. While there are five core processes of policy admin systems—product configuration, rating and underwriting, policy service, statistical reporting and premium accounting—the true indicator of a good modern system is that it provides many, although not necessarily all, of seven types of advanced functionality:
1. Out-of-sequence endorsements—flagging when an out-of-sequence endorsement is made, and providing the ability to construct and calculate premiums for the corresponding in-sequence set of endorsements.
2. Automated underwriting (new business)—using rules and scoring methods to automate some (or more rarely all) of the tasks and activities from submission, quick quote, rate, quote, bind and issue.
3. Pre-configured ordering and receiving third-party data—providing an out-of-the-box ability to request and receive data typically used in the underwriting process, such as VINs, geo-coding data, loss histories, etc.
4. Automated renewals—using rules and scoring methods to automate some (or more rarely all) of the tasks and activities in renewing a policy.
5. Premium and billing accounting—with the expectation that the policy administration system itself performs the calculations and directly feeds the receiving systems.
6. Statistical reporting—with the expectation that the policy administration system itself performs the calculations and transmits the data.
7. Update service for ISO/AAIS/NCCI rates, rules and forms—providing current versions of bureau-generated rates, rules and forms for an insurer that uses such content for various lines. The updates are provided in formats that compatible with the policy administration system’s product configuration and/or rating capabilities.
Finding all of this functionality in one system may be difficult, and one system does not fit all. Celent suggests insurers seeking a new core policy administration system begin the process by looking inward. Every insurer has its own unique mix of lines of business, geography, staff capabilities, business objectives and financial resources. Some vendors are a better fit for an insurance company with a large IT group that is deeply proficient with the most modern platforms and tools. Other vendors are a better fit for an insurance company whose IT group is small and wants vendors to maintain and support their applications. Some policy administration systems bring broad and extensive out-of-the-box functionality that matches an insurer’s lines of business and operating model, while other systems offer powerful configuration tools to build capabilities for both known and future requirements.
