McLean, Va. - The transformation of core policy administration systems and processes is one of the most critical success factors for property and casualty insurance companies in the coming decade, according to a report issued today by BearingPoint Inc. a McLean, Va., global management and technology consulting firm.
Based on interviews with technology executives at global insurance companies, the report entitled "Creating a Responsive Rating and Policy Platform for the 21st Century Property/Casualty Company," was created in conjunction with ISO Insurance Technology Solutions (ISO-ITS), a Jersey City, N.J. unit of Insurance Services Office, Inc. (ISO), a company that provides products and services that help measure, manage and reduce risk.
According to the BearingPoint/ISO-ITS report, most insurance executives were concerned that their companies would be severely constrained by the limitations of inflexible, complex legacy systems and the inability to obtain useful data. However, 21st century policy administration technology is now making it possible for insurers to:
*Provide distributors with widespread access to various insurance products;
*Implement highly adaptable and proactive product management capabilities to sustain sales, profitability and account retention goals;
*Create a secure, scalable contract administration environment that seamlessly integrates with corporate systems.
"It's increasingly clear that the world's leading property and casualty firms will need to replace their core policy administration infrastructure in order to address the demands of the 21st century," said Paul McDonnell, senior vice president, managing director and insurance segment leader for BearingPoint. "What's reassuring is that policy administration and ratings technology solutions are now available to make this transition viable."
The report also found that the new breed of policy administration systems offer property and casualty insurers the opportunity to address five of the seven key areas of change identified by the executives who were interviewed: customer management, process, enterprise architecture, information and channels. These systems will also:
*Allow carriers to be more agile in their product maintenance and development to better meet market demands;
*Consolidate mission-critical systems such as rating and rules engines;
*Automate and standardize processes and procedures;
*Increase the ease of doing business for distribution channel constituents;
*Take advantage of technology advancements in the area of integration capabilities.
"While the conventional wisdom just a few years ago held that legacy policy systems would endure, the recent emergence of flexible, powerful next-generation solutions has reshaped the landscape," said Massood Abolfazli, vice president of marketing for ISO-ITS. "Leading companies can now capitalize on highly-responsive automation to streamline operations, align technology resources with business needs and compete more effectively."
The global study was developed in conjunction with London-based Datamonitor plc, a business information company specializing in industry analysis. Datamonitor conducted the study for BearingPoint and ISO-ITS in spring 2006 based on interviews with the top executives at leading property and casualty insurers.
Source: BearingPoint
