Winners of 2012 XCelent Technology, Functionality and Customer Base Awards

Many new business and underwriting systems are open and configurable, will evaluate application questions and third-party data in real time, and compare results against company-specific underwriting, according to Celent’s “North American New Business And Underwriting Systems: Life, Health, And Annuities ABCD Vendor View.”

In the report, Celent also names the winners of their 2012 XCelent Technology Award, XCelent Functionality Award, and XCelent Customer Base Award, which have been embargoed by request, and are available in the report.

Making use of Celent’s ABCD Vendor View, the report presents a comparative view of the vendor marketplace, graphically representing four elements: advanced technology (and technical flexibility), breadth of functionality, customer base, and depth of customer service.

Some systems allow for straight-through processing, allowing policies to be issued immediately; others provide underwriters with a workbench filled with information to review and offer ultimate disposition of cases. Important trends in new business and underwriting systems include:

- Greater use of automated underwriting systems by non-U.S. firms as a result of lower levels of regulation, minimal use of medical requirements in underwriting processes, and less focus on sales to higher net-worth individuals with high face amount policies.

- Service-oriented architectures (SOA), interfaces with internal and external applications, and programming languages like JAVA, which enable more efficient, less expensive new business and underwriting processes.

- Growing interest in leveraging these tools to enhance straight-through-processing (STP) strategies to improve underwriting delivery times and efficiency.

- The convergence between reinsurance underwriting rules engines and vendor systems for underwriting case management.

Celent said automated or electronic new business and underwriting systems applications enable life insurers to automate the adjudication of new policies. They combine evidence data, including laboratory reports, doctors' records, medical information bureau reports, medication and medical histories, and other underwriting requirements and facilitate evaluation to assess the proper rate class for applicants.

Systems include: underwriting rules, automated interfaces with underwriting evidence providers and user interfaces for human underwriters, case managers, and producers. Automated new business and underwriting systems applications are being incorporated into strategies to deliver straight-through processing (STP) to their distributors and customers.

Functionally, these systems deliver:

- Integration with e-applications on the front end and policy administration systems on the back end, enabling electronic receipt of application data and ultimate issuance of policies

- Real-time receipt and matching of underwriting requirements from third party vendors with application data

- Conversion of internal and third-party data and information necessary for underwriting

- Workflow functionality to manage interactions between producer, electronic underwriter, human underwriter and new business staff

- Analytical tools to assess process flows and tools, such as predictive modeling and simulation tools to predict and test future process scenarios

- Rule engine capability to create and maintain underwriting and business rules

Celent’s report contains two types of profiles: full and limited. Vendors with a full profile received Celent’s ABCD Vendor View; limited profiles cover three system types: new products for the North American market; newly rewritten systems; and systems offered by reinsurance companies.

The report contains 15 responses top Celent’s detailed Request for Information (RFI). Each vendor provided a briefing and demo concentrating on the usability and functionality for users and the administrative and configuration tools used by IT or administrative users, along with the completed RFI and up to four customer references. Customer references also completed a survey to rate their system on functionality, integration, implementation and ease of use.