The property and casualty (P&C) insurance business has NEVER been more complicated than it is today – new and exciting insuretech is flooding the market; customers demand the instantaneous, personalized and digital service they receive across all other verticals; carriers’ systems must be able to interface with various elements throughout the diverse insurance ecosystem (including chatbots and machine learning); and regulations seem to be constantly changing.
Just as a climber seeking to scale a large mountain cannot achieve her goal without a stable base camp, insurers lacking a modern policy administration system (PAS) will not be able to meet today’s customer and organizational needs while staying ready for the future.
#1 – Treating Policy Admin. Like Unrelated Business Requirements
Like policy processing, the creation of a back-end policy administration system is not linear. The worst thing a carrier can do when scoping a policy admin replacement project is divide it up into dozens of small pieces, work each to completion and then try to fit them together.
This traditional approach to complex problem solving is not the right approach when it comes to building the technology to support policy administration. The requirements are simply too interrelated for this approach to work; it often leads to gaps or rigidity in the solution.
Because of the often-extreme operational demands found in policy administration, products, functions and features must be rationalized in multiple contexts, taking into account subtle nuances to ensure they work with other aspects of the system.
Let’s take the example of implementing a new product. Often, there are two project teams, one creating the product definition and the other creating the user interface. The product work is done first and requirements are typically passed on to the UI team with little interaction. This traditional development system often results in an inefficient or awkward data capture workflow, falling well short of user expectations and the business case.
That’s why Sapiens’ Policy Administration suite was architected with iterative, agile processes at its core, allowing users to interact with the policy administration system as they define the requirements. This allows subtle refinements to be incorporated as the system is built, rather than down the line at greater cost.
For more information, please stay tuned for sin #2 in this series, or check out my NEW white paper: The Seven Deadly Sins of P&C Policy Administration.
John Pettit is the head of Sapiens’ North American P&C Insurance Platform, with nearly two decades of experience in the P&C insurance market. He previously served as the founder, CEO and president of Adaptik Corporation, a North American insurance software firm that was acquired by Sapiens.