Insurers' interest in purchasing and implementing policy administration systems is expected to rise during the next four years, according to a new report from Celent Communications Inc., Boston. Six major factors are influencing property/casualty and life/health insurers to consider new policy administration solutions, Celent reports: regulatory/compliance issues; product flexibility/speed-to-market; cost reduction; Web enablement of systems; consolidation/integration of systems and servers; and business process flexibility /improvement.Although the market for policy administration systems has changed in recent years as more vendors incorporate browser-based functionality, a majority of carriers have not yet migrated their systems to these offerings, according to the report, titled "Policy Administration Systems Overview: 2005."
For many carriers, the norm is having five or more policy administration systems integrated with multiple billing, commission, licensing and contracting systems. As a result, "extracting the right data in a timely fashion can be difficult if not impossible," according to Chad Hersh, author of the report. Modern, open systems "can help dramatically improve audit and report capabilities, particularly when those systems are tightly integrated and share data," he writes.
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