Everyone in the P&C industry has heard it “We can’t do it.” “Nobody wants to do it.” “We can’t afford to do it.” Unfortunately, what they’re referencing are the reasons many insurers are still trying to maintain their business processing on legacy policy administration systems, attempting to bide time until there is no other recourse but to give in, bite the bullet, and take on the monumental task of replacing an entire policy administration system (PAS). Just the thought of that project sends IT, Business Users and Management reeling.
However, is that fear real? It is a bit daunting when one realizes that a complete policy administration system replacement will touch most every function an insurer manages, from quoting and rating, to underwriting, distribution, and even customer service. With that, everyone has heard at least one horror story around a transformation initiative that has far exceeded budget and the promised implementation / go-live timeline.
But, does it have to be that hard? Surely, in the age where a person can voice-activate their DVR to record a TV program from a cell phone, there has to be someone somewhere who’s figured out how to simplify this process. To be able to help insurers, of all sizes, transform and grow their business while also delivering on their overall objectives of providing speed to market, straight-through-processing for applications, quoting, underwriting, and simplified product development.
Maybe we’re looking too hard and the answer is simple and straight-forward. Why replace the entire machine when all it really needs is a new part…a single enterprise rating system? This core, modular piece of the policy administration system is the foundation of product development and rate management that enables insurers to provide the right product at the right price to the right customer through the best channels at any given moment in time.
The real benefit of a single enterprise rating system is the ability to deliver enhanced business capabilities, such as improved product management, streamlined underwriting, and speed to market. With these benefits, carriers have accomplished a portion of their overall transformation goal. Furthermore, lessons learned from the rating project can be applied to the bigger, down-the-road PAS project to support the successful completion of the overall transformation endeavor.
At the recent Oracle OpenWorld Conference in San Francisco, information was shared with attendees about a recent “go-live” project from an Oracle Insurance Tier 1 insurer who did what is proposed above…replaced just the rating portion of their legacy policy administration system with Oracle Insurance Insbridge Rating and Underwriting. This change provided the insurer greater flexibility to set rates that better reflect risk while enabling the company to support its market segment strategy. Using the Oracle Insurance Insbridge enterprise rating solution, the insurer was able to reduce processing time for agents and underwriters, gained the ability to support proprietary rating models and improved pricing accuracy.
There is mounting pressure on P&C insurers to produce growth and show net profitability in the midst of modest overall industry growth, large weather-related losses and intensifying competition for market share. Insurers are also being asked to improve customer service, offer a differentiated value proposition and simplify insurance processes. While the demands are many there is an easy answer…invest in and update the most mission critical application in your arsenal, the single enterprise rating system.
Download the Podcast to listen to “Stand-Alone Rating Engine - Leading Force Behind Core Transformation Projects in the P&C Market,” a podcast originally recorded in October 2013.
Related Resources:
White Paper: Stand-Alone Rating Engine: Leading Force Behind Core Transformation Projects in the P&C Market
Webcast On Demand: Stand-Alone Rating Engine and Core Transformation for P&C Insurers
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