Failing to anticipate a rules governance mechanism for managing changes is a MAJOR policy administration sin for property and casualty (P&C) providers. (For the previous blog posts in this series: sin #1, sin #2, sin #3, sin #4, sin #5).

A modern, configurable policy administration solution offer users unprecedented flexibility and adaptability. With unique, rules-based configuration tools, nearly any change is possible – all without an expensive, time-consuming development project.

But simply deploying such a powerful tool isn’t enough. Much thought needs to be given to changes — and how they’ll affect the holistic system — before they happen. Rules-based systems should always include features for multi-threaded development and full traceability of all changes. A governance body is required to establish priority and direction of how changes should be implemented.

Rule changes are often predicated on other rule changes; they build on one another, and sometimes the order in which they are introduced needs to be changed while one or more are in flight. This fact has created endless bottlenecks in traditional policy administration systems. Moving to a configurable system alone, though, doesn’t automatically allow a carrier to clear such hurdles — poor rules management capabilities in a modern system can also create bottlenecks and hidden costs. Without a proper governance body in place and the supporting rule versioning tools, product initiatives will inevitably need to be single-threaded, affecting the ROI of the system as a whole.

At Sapiens, we think of modern policy administration systems as icebergs. At the top are the instantly recognizable pieces – configuration, simple rule changes and lifecycle transactions for policies. But a properly thought-out architecture and process for managing the changes that are bound to be required must sit beneath the water line. It’s too often overlooked, but it absolutely must be there. If not, the effectiveness of even the most powerful, flexible policy administration solutions can be negated. For information on all the P&C policy admin sins, please check out my white paper: The Seven Deadly Sins of P&C Policy Administration.

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