Talk to enough insurers about their experiences with replacing or upgrading their policy administration systems and you'll hear a common analogy: heart surgery. While it may be a bit dramatic, as analogies go, it seems rather apt. Much as the heart pumps blood around the body, a policy administration system distributes an insurance company's lifeblood-data-throughout the enterprise. Another reason the comparison fits is that despite considerable caution, both undertakings represent no small amount of risk. As failed heart operations can have mortal consequences, a failed policy administration initiative can exhibit similar results on the careers of those involved.
Given the stakes and the cost involved, it is all too easy for carriers to kick the can down the road, and no doubt some do. Yet a large number of insurers are looking to leave their legacy policy systems behind. A recent report from Novarica shows that more than one-third of insurers are either already in the midst of, or planning a policy administration system project during 2012.
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