Boston – Specialty, excess and surplus insurance companies are global in nature and, as such, require policy administration systems that include an ever-changing set of product configurations and operating models. This is the backdrop for a larger discussion released last week by three senior analysts at Boston-based Celent, Catherine Stagg-Macey, Donald Light and Ashley Evans, who authored “Policy Administration Systems for Specialty, Excess, and Surplus Insurers: A Global Solution Spectrum.”
“By their nature these markets require a high level of agility,” says Light. “It’s not surprising, that [in our research] we see a high level of interest among insurers in new and replacement policy administration solutions that will provide a competitive advantage.”
Intended for the specialty insurer, based in the United States, Bermuda, Europe or London markets, the report, which profiles 27 vendors from around the globe, is designed to help specialty insurers create a short list of policy admin vendors.
Catherine Stagg-Macey, co-author of the report, notes that their research uncovered the fact that brokers and policyholders value products that are responsive to their particular risk exposures and risk financing strategies. Complex wholesaler/retailer distribution structures are common. Groups of underwriters migrate from carrier to carrier with some regularity.
“One insurer’s catastrophe is another insurer’s opportunity,” she says.
Add to that the notion that an increasing number of insurance enterprises are meeting broker and policyholder needs at Lloyd’s, but also in the broader London market, the EU, Bermuda, and other offshore locations, and within the United States on both an admitted and non-admitted basis.
For all these reasons, insurers participating in these markets require a policy administration system that accommodates an ever-changing set of configurations. It is not surprising that Celent reports seeing a high level of interest among insurers in new and replacement policy administration solutions that will provide a competitive advantage.
However, the combination of these complex requirements may limit the choice of proven vendors, notes the report. That said, some vendors profiled would be willing to enter a new region, expanding on their specialty experience elsewhere. Further, while a vendor may not have experience in a particular line of business, most have sophisticated product configuration tools that can potentially support almost any line of business.
Celent claims the report is one of the most comprehensive guides on vendors in the specialty insurance sector, and provides considerable data for each vendor, and offers suggestions for vendor evaluation, such as using a consistent methodology, a simplified RFI to identify “deal killers” among potential candidates, and the importance for in-person meetings and demos to further evaluate potential candidates.
Celent expects vendor selection activity by insurers, and continued development of solutions by vendors to continue at a substantial pace over the next several years. Information on the report is available at celent.com.
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