10 Things to Know Before Buying a Policy Administration System – Part 1

The strategic promise is that policy administration system replacement, if done correctly, can help Property & Casualty insurers improve time to market, be easier to do business with, grow their existing book of business, expand into new lines, reduce costs by increasing productivity, manage loss exposure and expenses and improve profitability. Insurers have realized that replacing their current policy administration system is a high risk endeavor because changes to the core processing system can impact the lifeblood of the entire organization. But upgrading your policy admin is a key aspect to your organization’s success. So, we’ve compiled a list of the top ten things you should consider before buying or replacing a policy administration system:

1. The Readiness Factor. It’s going to be hard to replace your policy administration system. So how do you know if your organization is capable of handling the challenge?

With many options available with today’s policy admin system, ensure that you understand the difference between a suite and best of breed policy administration system. Best of breed systems have standard integrations making implementation easier while suite systems have typical integrations wrapped together into one system but involve the replacement of multiple systems which can be riskier.

In order to figure out which system is best for your organization read the following white paper for more information: P&C Policy Administration Systems: Buy, Build or Outsource?

2. Business Goals. What are they? Policy administration replacement is not a business goal on its own. Do you want to be easier to do business with? Or accelerate your time to market? Or increase your productivity? Know what your business goals are and align your policy administration project to those goals. But, be sure to select a solution that is designed for change, so that you can evolve your system and meet those goals according to your plan.

3. How Modern is your IT Organization? Ask your IT team if they really want to be the “code brokers” for the business and continue the millions of lines of code needed to make product changes. Your IT organization should embrace the idea of qualified business users modeling, creating and revising your products as modern policy administration systems put the power in the hands of the business users, giving IT to focus on more strategic initiatives.

4. Should you “Supersize Your Fries”? Do you want an end-to-end solution, addressing everything from quoting, rating, billing, claims and more, or a best-of-breed solution that allows you to preserve existing investments by integrating with other systems using standard interfaces? You need to determine which solution is right for you.

5. Biggest Bang for your Buck. You can realize huge costs savings and revenue gains when replacing your policy administration system by paying special attention to a key area of your business – product development. Product configuration should exist at the heart of your policy administration system allowing product information formerly contained in various hard-coded operational systems to be stored in a central product repository. Insurers can inherit or assemble re-usable product components from the repository to modify existing products or build new ones – in weeks, instead of months – without affecting processes, which dramatically reduces the time it takes to get products to market.

These five tips should give you a head start at doing the leg-work required in researching what the best system and approach is for your organization. Tune in next time for the next five steps!

Recommended reading: True Speed to Market: Product Configuration Must be the Heart of Your Modern Policy Administration System

Ask your IT team if they really want to be the “code brokers” for the business and continue the millions of lines of code needed to make product changes.