What would it look like for an insurer to do everything right with today’s technology?
That’s the question underpinning
One prominent bets practice is use of industry data standards. “Model Insurers understand that they need to think beyond successful point solutions and create lasting systems that work within a larger infrastructure,” the report states. “Using data standards means that an insurer avoids reinventing the wheel and instead manages risk by working with accepted, well-tested and well-defined models.”
Another best practice, optimization of infrastructure, is more conditional but no less important. For one insurer, optimization may entail investing in new technology. For others it may involve extending the life of a legacy system. “Optimization of the infrastructure doesn’t have to trump other business realities,” the report states. “An insurer that licenses a modern policy admin system might decide that, rather than going through an expensive conversion process, it will keep the legacy system for existing business and use the new PAS for new business going forward. Although this may create a suboptimal infrastructure, the Model Insurer knows that the optimal scenario balances many factors.”
This thoughtfulness also informs another best practice, Use of Metrics. “Without the ability to quantify results, it is impossible to know what constitutes a successful project,” the report states. “Using metrics does not mean an insurer needs to practice Six Sigma or a highly repeatable and measurable review methodology to succeed. It does mean that an insurer needs to take a good look at the important metrics of a system before and after a project.”
