There's a reason we cover policy administration twice a year; these projects are a big deal.
Policy-administration replacements are commanding almost half of P&C insurers’ technology spend this year, according to Celent, and that’s up from an already impressive 27 percent last year. This important statistic could be interpreted as a sign that the technology has become mature enough that many insurers who have sat on the sidelines now feel comfortable taking on projects of this magnitude.
See also: Reconstructing Policy Admin
Policy-admin systems are foundational, enabling the many sorts of capabilities that are rapidly becoming competitive imperatives. As insurance telematics, wearables, smartphones and other consumer technologies proliferate and become more commonplace, data velocity and volumes are soaring. A recent Gartner report forecasts that there will be 26 billion Internet-enabled devices reporting status, location, environment and more, by 2020.
Is your policy-admin system ready for that data crush? Can it make use of external data, support analytics and push data to portals and mobile devices? Massive new data flows are happening even now; the only question is whether your company will be in a position to use them to its advantage.
As the Celent numbers show, the industry has reached a consensus that now is the time to move. Legacy systems were never intended to manage the volumes, velocities and types of data that are being generated today. How could they have been?
This month, we talk to insurers who have been there and done that with policy-admin upgrades — and then done it again. In some cases, their original projects were flawed; in others, they hadn’t gone far enough. While all of that is irksome, these insurers obtained great benefits their second and even third time around, and with the experience of their first upgrades under their belts, the later projects proceeded much more smoothly.
The longer insurers wait to pursue a PA transformation project, the further behind they will have fallen and the less likely it is that they will gain a competitive advantage with their upgrade. The lesson: It no longer pays to wait.
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