A policy administration system (PAS) used to perform limited activities: rate, issue and maintain property/casualty policies in volume. Working almost in isolation, it was attended solely by the hierarchy of underwriters and policy processors. No one else could touch it; any attempt to mess with such a core system was deemed too risky. Mainframe and client-server applications also limited functionality and ease of use.Web-based systems changed everything, resulting in more demand from captive and independent agents and managing general agencies for access to quoting, rating and even issuance. Claims adjusters and third-party administrators also wanted more access to policy data.

Old attitudes still exist, but at most insurers the PAS is becoming the hub to gather and maintain data about each prospect and client and to ensure that the information flows smoothly to claims, billing, compliance, financial and reporting systems. It's becoming the engine that drives all the gears, and everyone goes for the ride. Service-oriented architecture and Microsoft's .NET framework make such integration possible.


Here's how insurers are doing more with their PAS today.

* Quick quote and application data capture. Salespeople need to produce accurate quotes quickly and easily. Instead of having them use a separate application system, they should use the PAS. But agents need a simplified interface-an alternative agency front end. After the quick quote has been produced and the prospect says "yes," it's a lot easier to capture the data and feed it directly into the PAS. The agent taking the application is gathering invaluable data, which should be preserved to improve underwriting accuracy and other analytics and stored without having to enter it twice. (And the same holds true for data gathered during the entire policy lifecycle-including claims, billing and routine servicing.)

* Risk clearance. This kicks out any identical risks that were submitted twice by different agents. It also checks applicants against the terrorist watch list and runs checks required by the U.S. Office of Foreign Assets Control.

* Enhanced underwriting. The PAS can use external data sources and analytics to improve risk selection and pricing. A wealth of information has long been available for personal lines underwriting, and now similar data can be used for commercial underwriting, including motor vehicle records (MVRs), vehicle identification numbers and commercial credit scores as well as scores based on modeling that uses all that data. Claims records are coming soon, with the commercial lines version of the Comprehensive Loss Underwriting Exchange (C.L.U.E.) about to be released. Many of those data reference services can be accessed when the agent is producing a quick quote. As additional data points are added, the PAS should ensure they are used in various iterations.

Next, in full underwriting mode at the carrier or MGA, the PAS can crunch all the information about the risk and run analytics to produce an underwriting score-not just for a yes/no decision but also for more accurate pricing.

For renewals, the PAS should pull in real-time claims information. This allows for the best complete picture.

* Comprehensive data collection. This allows for analysis and service of the book of business. Reporting databases are often handicapped by incomplete information. Insurers gather data from many disparate sources: from paper applications (which may be imaged), from the claims system and from the underwriting system, which store data such as MVRs. But much of that data never arrives at a central location. If the data isn't tied together, there is less chance to use it.

The policy administration system is the most logical place to coordinate collection and maintenance of client information gathered over time. As the data collection hub, the PAS assures comprehensive collection and storage for easy access and updating. It can feed the reporting database with full and up-to-date information. Companies can confidently run detailed analytics to analyze the book of business at any level of detail-even down to comparing individual underwriters' books.

A data-rich PAS facilitates routine customer service, instead of running a disconnected customer relationship management system. By collecting the right information up front, companies can avoid confusion by understanding relationships and feeding the billing system correctly.

* Workflow/diary functions. These automatically route policies through their lifecycle. Companies often have a lot of "back and forth" with applications. An insurer might, for instance, be willing to write a risk but only at lower limits. A more robust workflow/diary function provides better management of business processes so nothing falls between the cracks.

Ultimately, using your PAS to do more leads to better results. Better data enhances supporting processes, which, in turn, enhance the core policy administration function. You end up with a smoothly functioning, well-integrated machine.

As a product manager at Insurity, a Hartford, Conn.-based company owned by ChoicePoint Asset Co., Robert Burns is responsible for the policy administration system, Policy Decisions.

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