Moving your policy data from one policy administration system (PAS) to another may sound simple — it’s logistics, right? In reality, the conversion process is much more complex and critical to the overall success of transformation initiatives than most people realize. If the conversion is poorly done, then insurers can find themselves understaffed at the time of conversion and working with data that doesn’t match. This can result in skepticism about the system’s quality, lower productivity and a negative impact on the bottom line. Moreover, if any or a combination of these occur, then transformation efforts can stall before implementation is final. Considering how much conversion impacts underwriters, agents and insureds on day one, it’s imperative to allocate sufficient time for conversion planning.

Manual vs. Automation

The biggest question for an organization as it formulates its conversion strategy is determining how large a role business units or IT will have in moving converted information. Arriving at an answer involves choosing automated conversion, manual conversion or a hybrid, partially automated solution. Each approach has pros and cons, depending on similarities between systems, data integrity in the current system and complexity. 

As the following diagram shows, there are several factors that can influence how your organization should proceed and where it fits on the conversion approach spectrum. A smaller personal lines carrier might find itself closer to the automated end of the spectrum, whereas a mid-sized, multi-state commercial lines carrier could be in the hybrid zone and a national specialty lines carrier might be on the manual end of the spectrum. 

Conversion Considerations

To help mitigate the risks in any type of conversion, planning should be both thorough and be subject to careful scrutiny by program leadership. The following are three broad considerations that can help you formulate a plan that has the appropriate structure and discipline.

  1. Define the rollout strategy early in planning. Will you be rolling out your new system using a big-bang approach by phasing in implementation by product, location, line of business or a combination? To minimize risk, you may decide to steer clear of a big-bang approach, and choose an alternative based on your comfort with the product, personnel or the volume of conversion in each phase.
  1. Align resources around the conversion. Assess the resources you have and will need for conversion.This will help youunderstand the number of people you’ll need to support your rollout strategy and plan to develop and onboard any additional resources. Variables to take into consideration include the PIF count and seasonal variability of your book of business, the current available capacity of your underwriters and underwriting support staff and the incremental increase in the level of effort related to conversion.

The testing, implementation and conversion phases are likely to introduce many unknowns to your organization and result in many demands for SMEs (representatives from the business that support the program). You may want to consider evaluating and potentially expanding the SME team at each phase of implementation to ensure there is adequate coverage.
Dedicate time and resources to ensure there is sufficient conversion related training. Consider just-in-time training for your underwriting team and other end-users, but keep in mind that the conversion functionality and process training may not have the same timing as training for new business, endorsements or cancellations.

  1. Provide for post go-live support activities. Commit the team to identifying a set of conversion standard operating procedures. Doing so will provide much needed guidance on the treatment of updated/new products, one-time conversion process workflows and system-related requirements. If created correctly, these standard operating procedures (SOP) can serve as job aids for your end users and also help inform the development of the training materials.

Lastly, ensure that there is appropriate support for the conversion process throughout the rollout. You may want to consider creating a specific support team to intake, triage and resolve issues. This team also can be responsible for refining the conversion/rollout documentation (e.g. SOPs, training and FAQs) and for monitoring the team’s progress.
Automation Considerations

There are special considerations to take into account if your organization decides to use an approach that includes automation. First, it’s imperative that the organization understands and agrees upfront on the level of automation that’s needed. Pushing to get to 100 percent often has diminishing returns or no return on investment at all. This decision should factor in three primary considerations: key exceptions, timing of the automation and required level of historical information.

  1. Key exceptions. In order to keep things streamlined, define the key exception cases or products that should be put to the side. Because doing so will promote greater efficiency in an automated conversion process, you should give special consideration to the areas in which you can leverage common mappings.
  2. Timing. Your organization will need to weigh the pros and cons of different timing sequences. Timing sequence options include batch, real-time, at renewal or big-bang. If your target conversion approach is a hybrid, then it will necessarily include some manual intervention and, therefore, may influence your decision about desired conversion timing.
  3. Historical information. You also will need to define how much historical information you need. Business owners will need to help you determine what data is truly necessary and agree to not bring over everything. At the same time, you’ll need to work with the underwriting, claims and legal teams to develop an archival strategy for the old data that will not be converted.

Lastly, if you adopt an approach that leverages automation, then you should assume that the data is messy and will require cleansing either in advance or once it is in the new system.
In summary

Though it’s not as glamorous as building and creating the new system, adequately planning and preparing for conversion is critical to ensuring a smooth PAS transformation implementation. Looking at the lifecycle of a PAS transformation program might lead one to think that conversion is the end of the process, but don’t forget this is actually just the beginning for the majority of your end-users.

Steve VanDee, operational transformation consultant with PwC's Advisory Services, co-authored this piece with Josh Knipp and Imran Ilyas, partner with PwC's Advisory Services.

Readers are encouraged to respond to Imran using the “Add Your Comments” box below.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on do not necessarily reflect those of Insurance Networking News.

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