Archive for the ‘Policy Administration Systems’ Category

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Importance of Communication on Core System Replacement Projects

Friday, March 29th, 2013

Tom Benton

In my recent discussions with various insurance IT leaders, communication issues are becoming a common thread in lessons learned during core system replacement projects.  This reminded me of a Harvard Business Review blog post I read recently.  The post suggests that communication is an issue that has been of concern for a long time.

The author (Scott Edinger, founder of Edinger Consulting Group) presents three critical elements of communication first proposed by Aristotle, the Greek philosopher who studied under Plato and was teacher to Alexander the Great, a leader who undoubtedly dealt with communication issues on his projects.  The three elements of ethos (credibility), pathos (emotional connection) and logos (reason, or logic) are all important to communicating your message effectively as a leader.  Your team needs to believe what you are saying, connect with it and understand how you came to your conclusions.  The post notes that while all three elements are needed to communicate  effectively, leaders can become better communicators by improving in any of the three.

From my discussions on core system replacement projects, IT leaders believe that improvement in communication will increase the likelihood of success on these projects.  As one Novarica IT Research Council member noted, project leaders need to communicate “early and often” for project teams to successfully meet the challenges of these large, high risk projects.

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ACORD/LOMA Forum 2013: Novarica on Growth, Modernization, and IT Impact

Sunday, March 3rd, 2013

Matthew Josefowicz

Chad, Karlyn, and I will be speaking at a number of this year’s ACORD/LOMA Forum, on topics ranging from modernizing your distribution channels to preparing insurers for new technologies and business strategies in 2014. If you’re planning to attend ACORD/LOMA this year, please let us know.

Our sessions are:


Tuesday, May 7

  • 2:15-3:30 PM. Creating Market Expansion Capabilities: Capitalizing on New Growth Opportunities (Karlyn Carnahan)

There has never been a better time for insurers to develop a strategy for capitalizing on new growth opportunities. The marketplace abounds with opportunities for carriers to offer critical products and services to commercial and private businesses. This panel discussion will cover how to get started on setting up your business for successful expansion, outline the benefits of industry partnerships and provide a comprehensive overview of the technology available to successfully expand your business to serve the markets you want to serve.

  • 2:15 PM – 3:30 PM e-Signatures: Implementers Discuss Their Experiences and the Benefits of Adoption (Rob McIsaac)
Rob McIsaac participates in a panel with Genworth, ESRA, and Warwick on e-Signatures benefits and challenges.

 

Wednesday, May 8

  • 8:30-9:30 AM. Evolving Your Distribution Channels: Modernization That Matters (Karlyn Carnahan)

Insurance isn’t purchased the way it was a decade ago. Unfortunately, insurers have maintained static distribution channels with little potential for significant growth. So, how can insurance distribution channels change with the times? For insurers, the evolution of distribution channels is modernization that matters. Attend this session to learn how automation can help distribution channels roll with the punches and improve producer management at the same time.


  • 10:00-11:15 AM. Analyst Panel: What is New in 2013 and What Should We Expect in 2014? (Matthew Josefowicz)

While many new technologies and business strategies are discussed during the event, is anything really new that is changing the industry? This panel will present point of views from the analysts on what is new this year and how much change is really happening within the industry. Panelists will discuss the major industry changes of 2013, whether insurers are really innovating, and what we can expect in 2014.

  • 1:15-2:15 PM. Core Policy Transformation: Real-World Insurer Stories (Chad Hersh)

This interactive session brings together technology, consulting and data conversion industry experts to discuss the different strategies insurers are taking to fundamentally improve their business. Hear real-world stories of insurance transformation from the teams that are executing on these projects. Topics will include understanding the compelling business reasons to transform, including product agility, excellent customer service, and reduced cost; and how business context impacts transformation strategy and business value of modern application architecture in a changing insurance value chain.

  • 2:30-3:30 PM. IT Initiatives That Deliver Business Impact (Matthew Josefowicz)

This panel of insurers presents case studies of real-life IT projects that delivered business impact by adopting new practices, delivering quick hit new capabilities, expanding the capabilities of existing systems, or transforming entire platforms. Learn how these insurance IT leaders worked with their business partners, overcame challenges, and delivered real business impact.

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Business and Technology Trends: Workers’ Comp and Commercial Lines

Friday, November 30th, 2012

Karlyn Carnahan

For the latest in our series of Business and Technology Trend reports, I looked at the top issues for Commercial Lines and Workers’ Comp, and offered an overview of and data on their respective markets and examples of recent technology investments by insurers.

Both commercial lines and workers’ comp carriers are looking to invest more in agent portals, data analytics, and core systems replacement. Specifically, commercial lines carriers are focusing on expense reduction, growth strategies, and improving underwriting results, as they see pricing continue to firm up. As a result, we are seeing them consider issues including business intelligence (particularly predictive analytics, for those who have sufficient data), policy administration upgrades to improve product development flexibility, claims administration system upgrades, and agent and policyholder portals that extend functionality to both parties.

Workers’ comp carriers, on the other hand, are dealing with competitive and regulatory pressures that are leading to a strong interest in data and efficiency. Like commercial lines carriers, their top initiatives include extending portal functionality to the agents and policyholders, upgrading claims administration systems, and policy administration system upgrades to improve risk selection and pricing, and to reduce operating expenses. They are also interested in business intelligence and predictive analytics tools.

A free preview of the Commercial Lines report is available online here, and a preview of the Workers’ Comp report is available here.

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New Novarica Reports Help P/C and L/H/A Insurers Navigate a Market of 80+ Vendors

Thursday, May 24th, 2012

Chad Hersh

I’m thrilled to announce the publication of the most recent update to our Novarica Market Navigator reports on P/C and L/H/A policy administration systems. We looked at over 80 vendors for these studies, including 58 P/C solutions and 25 L/H/A solutions—by far the most comprehensive look we’ve taken at those markets to date. The resulting profiles are designed to help insurers navigate a marketplace that’s becoming only more complex.

With a third of insurers indicating that they are currently replacing or planning to replace a policy administration system, these reports couldn’t be timelier. In fact, more P/C and L/H/A carriers view PAS replacement as a top priority project than any other type of project. Many insurers learned—the hard way—that product agility and speed to market aren’t just buzzwords, but can make a world of different when trying to quickly enter or exit a line of business or product.

And with many project administration systems now being offered on non-legacy platforms, particularly for P/C, figuring out which solution to use has grown increasingly difficult for insurers. This report can provide carriers with valuable insights on where to start with their searches.

Meeting and exceeding expectations for agents, brokers, and customers requires changes to most carriers’ core systems, and we’re seeing that manifested in the surge of interest in policy administration systems and in the functionality provided by the systems. The other business drivers for core systems replacement—speed to market, product agility, internal workflow optimization, and data accessibility—continue to be key decision factors as well.


Click here to read a preview of US Property/Casualty Policy Administration Solutions 2012(Q2).

Click here to read a preview of US Life/Annuity/Health Policy Administration Solutions 2012(Q2).

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Do PAS Projects Pay Off for P&C Insurers?

Wednesday, May 9th, 2012

Chad Hersh

Core policy administration replacement is one of the highest priority projects among P&C insurers. Nearly every one of those insurers has the same questions: how does our project (or potential project) compare to those of our peers? Are we spending too much? What results can we expect to gain? What has been the experience of others who’ve taken this step?

To answer those questions, Novarica partner Matthew Josefowicz and I looked at core policy administration projects completed by 37 P&C insurers over the past 10 years. The resulting report outlines project impacts, average resource utilization, costs, and timeframes, and discusses major challenges faced and overcome.

The full report details a number of key findings, notable among them the fact that the vast majority of PAS projects have been replacements for one or more existing systems, rather than projects where a new system is added to support a new line of business. And unsurprisingly, P&C insurers are spending on projects that support their biggest books of business.

But the question remains: is an investment in a PAS project worth it? The answer, it seems, is yes: the majority of insurers cited 25% or greater improvement in speed to market, data accessibility, and technology risk as a result of their projects—three key drivers for P&C insurers as they work to modernize their systems.

To see how your PAS project spending stacks up, click here to read Novarica’s full report, US P/C Policy Administration Projects: Averages and Metrics.

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Product Agility an Emerging Incentive for L&A Core System Modernization

Monday, May 7th, 2012

Chad Hersh

I had another great conversation with Insurance & Technology’s Anthony O’Donnell today, this time to discuss where L&A carriers rank speed to market among their needs in core system modernization projects. As I explained to Anthony, core system replacement is being driven by a number of needs, including speed to market, data transparency, and better distributor and customer self-service.

But while vendor marketing messages and many pundits continue to (correctly) point out the need for speed to market, another critical need has emerged: product agility. Speed to market implies the need to get a product to market quickly, but product agility is the ability to add any new product to the system–whether the admin system supports it today or not. Many carriers seeking to add a long-term care rider to an annuity have to wait for vendors to improve their systems; think Medicare Supp or Medicare Part D as examples of healthcare legislation driving rapid product introduction needs, and look out a year or two at the huge potential changes.

To read Anthony’s full story on L&A insurers’ need for speed and agility in core system modernization, click here.

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INNtv Interview on Insurer Plans for 2012

Thursday, January 19th, 2012

Matthew Josefowicz

My recent interview with Insurance Networking News is now online. Topics include:

- Overview of the Novarica Insurance Technology Research Council and plans for 2012

- Mobile and Social media

- Modernizing core systems strategies

See the full 6:20 minute interview at Insurance Networking News

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Novarica featured in Best’s Review article on PAS replacement

Wednesday, January 4th, 2012

Matthew Josefowicz

Novarica research and insights on insurance policy administration system strategy were featured heavily in the article “Replacement Value” in the January 2012 edition of Best’s Review. Click here to download a PDF of the article.

As active readers of this blog and our research are no doubt aware, insurance policy administration strategies and vendors are a major area of focus for us at Novarica.  Our US Insurers IT Budgets and Projects for 2012 report showed that more than 1/3 of insurers are either already in the midst of, or planning a policy administration system project for 2012.

An excerpt from the article is below:

“This is really about re-engineering the core processing systems of the organization. If the business side isn’t fully invested in almost co-developing the projects — or participating in it on equal footing with IT — it’s much harder for these projects to conclude successfully.” [Josefowicz said]

Hersh suggests that carriers begin replacement with a clean slate.

“Don’t base what you will do off what you’re doing today. If the goal is to replace your system, then you need to start over. The goal ought to be to reinvent the system by replacing it. Carriers need to have a clear, articulate argument for why and how that’s going to happen.”

Click here to download a PDF of the full article.

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Novarica on PAS and Vendor M&A in I&T

Tuesday, December 13th, 2011

Matthew Josefowicz

Nathan Golia and the I&T team have a nice round up on 11 Burning Insurance Industry Questions That Will Be Answered in 2012, which includes a few Novarica perspectives:

Chad Hersh on Policy Admin:

“Carriers have swung from monolithic suites to best-of-breed systems, and now to best-of-breed suites,” observes Chad Hersh, a partner in New York-based research and advisory firm Novarica. “Best-of-breed suites have emerged as a significant preference, as the majority of best-of-breed vendors have expanded their offerings to include billing and claims.”Carriers appreciate the reduced integration effort associated with best-of-breed suites, Hersh notes. But, “If history is any guide, we can expect another shift down the road,” he cautions.

Me on Vendor M&A:

Novarica partner Matthew Josefowicz predicts that more independent software vendors will be acquired by services firms, in the manner of Wyde/Mphasis and Duck Creek/Accenture. “This is driven in part because most insurers have shifted to a ‘buy’ rather than ‘build’ mentality. Another reason is that the componentized suite is becoming the dominant model for software vendors,” Josefowicz asserts. “This is likely to drive consolidation of vendors that provide only a single point solution.”

 

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Life/Health/Annuities Policy Administration Systems Market Navigator Published

Friday, May 20th, 2011

Chad Hersh

We’ve just published the most recent update to our Novarica Market Navigator reports on L/H/A Policy Administration Systems. The new edition features profiles of 25 solutions, listed here.

Whether the purpose is consolidation of existing systems, replacing an existing system or systems, or simply adding a new product or line of business, carriers are undertaking policy administration projects despite the recent downturn. Although L/H/A carriers were under exceptional financial pressure for a variety of reasons in 2008 and 2009 (and for some, 2010), the number of these projects being planned is rapidly growing. In fact, more L/H/A carriers view PAS replacement as a top priority project than any other type of project.
The primary factors driving this continued trend are:

  • The need to improve product development speed to pursue new opportunities or to accommodate shifting preferences (e.g., shifts to and from term life, or to variable products and back to fixed products)
  • A desire to reduce the sizeable costs associated with running myriad legacy systems on aging platforms
  • Keeping up with competitors who are modernizing
  • A desire to reduce dependence on vendors to maintain or enhance the system, or to make day to day changes to rates, underwriting rules, etc., thereby reducing long term total cost of ownership

Another key factor is the desire to attract and retain not just top producers, but also the new generation of producers who simply won’t stand for the challenges presented by legacy solutions. This is critical for either attracting captive agents or for increasing wallet share with independent agents. For some carriers, being able to offer a low face value, instant issue policy is another driving factor. Finally, a growing number of modern systems are emerging for areas which have long been neglected, including group products, worksite marketing, universal life, variable products, and more.
Inflexible legacy policy administration systems can prevent insurers from being able to take advantage of new opportunities and being able to meet customer and agent expectations.

 

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