While the fact that insurers continue to show interest in policy administration system projects may not be surprising, that they’re opting for SaaS or hosted solutions is, according to Novarica’s recent reports.

For the reports, “P&C Policy Administration System Projects: Averages and Metrics” and “L/H/A Policy Administration System Projects: Averages and Metrics,” Novarica talked to 11 P&C insurers and 14 life/health/annuity carriers that currently are implementing a policy administration system or have done so in the past 10 years.

Twenty-five percent of the P&C midsize insurers are opting for hosted or SaaS PAS solutions. And, three of the seven midsize L/H/A insurers surveyed are opting for hosted or SaaS PAS solutions. Novarica expects the trend to increase in both sectors, not only for midsize but for large carriers as well, as modern systems become more complete and mature and new entrants join the market.

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One benefit of the SaaS-based implementation is deployment time, Novarica highlighted. Deployment times are decreasing as solutions and implementation methodologies mature (e.g., iterative, agile-like approaches), and SaaS-based solutions are increasingly attractive for their shorter timelines and correspondingly lower implementation costs, Novarica said. For example, while in the L/H/A sector, most policy admin deployments were completed in less than three years, one large insurer was able to implement in less than 6 months using an established SaaS-based implementation.

The Novarica reports also highlighted a number of other policy administration system projects trends.


Large P&C insurers focus on core policy administration, underwriter workflow and rating engine with less emphasis on billing and claims than midsize insurers, more often integrating with existing systems. Large P&C insurers also were twice as likely to include business intelligence and reporting in their projects.

Midsize L/H/A carriers typically included billing and claims capabilities as part of an integrated suite, while large insurers mostly integrated with existing solutions.


Large P&C insurer deployments typically included a one-to-two-year initial deployment with additional phases lasting as many as four or five years, while small insurers’ projects largely were completed within four years. Most P&C conversions were handled on renewal with a few insurers opting to convert a small number of states first, then a full conversion for all states later. P&C insurers are using internal resources to complete about half of the work, with large insurers more dependent on third-party service providers and midsize insurers more dependent on the vendor for external resources. Most project spending is on internal and external resources rather than software licenses.

Midsize L/H/A carriers depend almost twice as much on the vendor for deployment support than large insurers. Conversion was split between converting all data for full deployment, phased conversion, line by line or state by state, and for L/H/A carriers new lines of business only, with costs greatest for the phased approach.  


P&C insurers report the most positive impact on areas such as workflow and business user satisfaction and the least positive impact on costs.

L/H/A carriers report generally positive impact overall, but especially for areas where internal efficiencies and process improvements are realized by the implementation. 

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