Even before the global outbreak of COVID-19, insurers couldn’t afford to make changes to their offerings by changing code in a leisurely fashion. Today, there’s simply no time or budget for that.
Today’s advanced, next-generation policy administration systems (PAS) must include core elements that enable insurers to stand out in a digital business environment. They must offer five key characteristics.
Below are the first three:
Fast Time to Market
The market is changing quicker than ever. Insurance carriers are taking agile approaches to enhance their current set of products, add new products and enable the market to find them across new and emerging distribution models. The necessity for a PAS to support these approaches is critical to the success of any carrier.
Agile and quick product launches are replacing the traditional models with a full-blown solution out of the gate. A next-generation PAS offers an immediate, full solution with a minimal viable product (MVP) option, so that insurers can quickly release new products or features with minimum investment, to take inventory and learn if the new products are viable in the market and to see how customers react.
Configurability & Self-Sufficiency
The system must be fully configurable to keep up with today’s demands. By using a configurable system, a PAS can make the full process quicker and easier to use, saving costs and increasing speed to market. Creating a self-sufficient PAS operated by the business departments, the insurer will need less tech support to get the system up and running and add flexibility when it comes to implementing. Additionally, a carrier can take advantage of the flexibility a configurable PAS offers. It allows them the capability of quickly and easily making changes to their new offerings and reacting to market demands, as well as customer demands and needs.
Today’s PAS should enable insurers to define their products and work directly on digital and back-office development in one step.
Openness to External Systems
A significant proportion of investment in insurance innovation is going to insurtech companies that are seeking to penetrate the insurance business sector. Thousands of companies are driving the insurance market towards innovation, a new and advanced user experience, business efficiency, growth tools and more.
Insurers who want to benefit from this trend cannot rely solely on their own innovation – they should be open to collaborations with partner companies. To achieve this goal, their systems must be open and flexible to easily and quickly adopt new technologies and applications, and to accept more internal and external third-party data. Open PAS architecture will enable insurers to personalize their offers further, to use third-party data to better manage their offer lifecycle and to reduce underwriting process time. API layers connected to the PAS and facilitating this openness are a must for insurance innovation.
Stay tuned for my next blog post, which will highlight the last two additional key qualities of a next-gen PAS…