Boston — Times are changing, and insurers need to take a close look at their policy administration systems’ functionality and scalability. According to Celent reports—“Will Your Policy Administration System Support Your Future Growth? Measuring Scalability and Performance” (Life/Health and Property/Casualty Editions)—it’s not enough for a system to fulfill all of an insurer’s functionality requirements; it must effectively handle the company’s business, and it must continue to perform in a satisfactory manner over years or decades, In order to guarantee this system behavior, insurers must be ready to discuss scalability and performance with vendors before any major software acquisition.
“When determining the future scalability requirements of a system, an insurer must make some predictions as to the growth of their business,” Jeff Goldberg, Celent senior analyst and author of the reports, tells Insurance Networking News. “While a policy admin system might be able to support their size upon production, that may not be true in five years. One factor that makes this prediction difficult is that the new policy admin system will actually change the playing field. Perhaps only 20% of an insurer’s agents submit business electronically, but after the new policy admin system is in place, that percentage may jump significantly. While making predictions about how their business will grow, the insurer also has to take into account how major new systems such as policy administration will change that business.”
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