Converting a book of business to a new system can be viewed by some as the riskiest part of a new system implementation. However, with proper time and resources, conversions need not be feared. They are all part of the system migration, which is to enable the company to improve its ROI and competitiveness. Each company needs to assess the cost, time and benefits, and if sufficient resources and time are allocated, success is manageable.In single-phase conversions, all data is converted at one time with two options. Sufficient history levels (number of years) are converted that enables the discontinuance of the existing system. And the latest versions of data are converted to allow the new system to be used for all future transactions. The existing system is retained for a period of time for inquiry purposes into past transactions.

The advantages of a single-phase conversion are that the required resources are used for the lowest amount of time and therefore costs. Longer conversions run the risk of losing some resources, which need to be replaced, leading to a lengthier task.

In a multi-phase conversion, data is segmented by line of business or territory. The initial phase will encompass the installation of the whole system but will include only a portion of the portfolio. This will include underwriting, billing, claims, reinsurance, document issuance, management reporting, financial reporting and bureau filing. Each module will be tested using a portion of the portfolio. The initial phase is comparable to a single-phase implementation as the whole system is tested.

Subsequent phases involve adding other parts of the portfolio. This mostly affects the underwriting system to ensure proper rating, document issuance etc. These are much smaller phases and can be achieved with fewer resources. The portfolio being added needs to be tested through all modules (billing, claims, reporting, etc.). However as these modules have already been tested the additional work relates to tracing the new transactions through the system to ensure that they are being processed correctly.

The multi-phase approach can be implemented where each phase is implemented, user acceptance testing completed and then goes live as they are completed. Alternatively, each phase is completed up to the user acceptance testing, and only after all parts of the portfolio have been completed is the system put into live production.


When it comes to a full conversion versus on-renewal conversion, the portfolio is converted once or is converted as it comes up for renewal. A full conversion requires that all policy, billing and claims data for that portfolio be converted at the same time. Once user acceptance testing has been completed and the system goes live, all processing will be done in the new system.

On-renewal conversion requires that the existing system is retained until there are no more policies to be renewed and all billing information is collected. In this scenario, the existing system is used for changes to the current and previous policy terms and the new system is used for any changes to the renewal term and beyond. Any billings and collections takes place in the system where the policy term is managed.

A renewal conversion may be viewed as limiting the conversion risk to only the new and renewing policies, allowing the existing system to handle previous policy terms.

Converting the policy, billing and claims data all at once enables the new system to collect billings, settle claims and allow policy changes to the existing portfolio. The advantage to this approach is that all interested parties are being served by a single system.

In addition there is only one system to use and users don't need to decide if they need access to the previous system or the new system.


Policy and claims conversion are most likely relatively straightforward, with difficulties to be addressed between the use of existing codes and new codes. These are managed by the use of mapping tables where the existing codes are looked up and the new codes applied. To support this effort and to prepare for the new system, all tables that will be used for the new system need to be defined and set up. These include areas such as policy types, billing types, coverage codes, agents, adjusters, etc.

Billing and collection systems must be compared as to how they maintain and apply billing and collection data and late payment or cancellation rules.

Migration from a policy-based system-where each policy contains the client data as apposed to using a client record-to a client-based system requires that all policies for one client are linked to a single client record, or this will result in multiple client records for the same client. The conversion process needs to establish a client lookup when converting policy data, where the client name and address is used to set up a client record and to be used to link policy data where the client is the same. Once a client record is established for all policy data, this can be used to link billing and claims data.

Careful planning is the key to success for single- or multi-phase conversion, a full conversion or an on-renewal conversion.

Robert Symons is the president of Tritech Financial Systems Inc., Toronto.

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