The Increasing Significance of Insurance Policy Administration Systems

Insurers are demanding technology that integrates seamlessly with existing solutions to increase agility and speed to market before they greenlight the purchase and implementation of a policy administration system.

September 26, 2018

Early policy administration systems had large structures and could execute only limited requirements with minimal capability to integrate outside of the back-office or with distribution channels. However, with the flexibility of functionality in these systems has expanded along with the ubiquity of the Internet and social media, modern policy administration systems today face virtually no restraints on distribution channels.

With older policy administration software, companies were forced to write or edit code whenever they wanted to make a change in a product or rollout innovations. Today, companies require componentized, flexible integration points with the adaptability that comes standard upon purchase. Insurers are demanding technology that integrates seamlessly with existing solutions to increase agility and speed to market before they greenlight the purchase and implementation of a policy administration system.

Policy administration software now plays an essential and increasingly significant role in every insurer’s business model, from the first encounter to the back office. Hardwired, rigid systems that cannot scale or adapt adequately to changes in regulatory laws, market shifts, and customer preferences have become a drag on success and profitability. But successful insurance carriers are finding new ways to harness untapped value from their internal operations using various forms of business process automation, and are moreover using policy administration technologies to add value by providing loss prevention and mitigation as well as traditional indemnification.

The Future of Policy Administration: Five Key Trends

As the technology that comprises policy administration systems become more flexible and powerful, Chief Information Officers and Chief Technology Officers are demanding these systems help advance key business goals like fuelling collaboration by freeing underwriters and IT from manual processes and creating an intuitive technology experience for both insurance professionals and policyholders. With technology that is more versatile and easier to use, more people want to use it. When more people use it, the virtuous circle of the network effect can help the policy administration technology snowball in value.

Here are five trends we see today in across policy administration systems.

1. A Device Agnostic, “Mobile Focused” Strategy

We now take it for granted that virtually everybody walks around with a supercomputer (aka smartphone) in a pocket or purse. Due to the relative ease of use, as indicated by geolocation services, navigation by swiping and barcode readers are used to quickly prefill data rather than manual typed input — the modern consumer uses mobile devices throughout all aspects of life. Global smartphone use has already overcome desktop use 52.95% to 43.11% (with tablets rounding out at just shy of 4 percent) according to StatCounter’s July 2018 data. At its heart, a mobile-focused strategy for any type of technology adheres to consumer’s demand for any time/any place service.

Insurers must serve users on their devices of choice. Future applications will be most successful when they are built to be used seamlessly across desktop, tablet, and phone vs. optimized for particular devices to the detriment of others. In the past, the desktop was the guiding platform for systems to be built and mobile requirements were relegated to an afterthought. Today, the opposite is the case. Luckily out-of-the-box GUI infrastructure now affords advanced capabilities to optimize the desired screen real estate and design a layout to fit, making it much easier to develop device-agnostic solutions.

2. Rule Capabilities 2.0

Gone are the days when a policy administration solution could simply promote its system as being rules-based to differentiate it from the rest of the market. All relevant systems include this functionality today. The term “rules-based” itself simply just implies that the business or underwriting rules are included within the system.

In the modern marketplace, policy administration software systems use rules capabilities to enable carriers to innovate and respond to shifting market factors. Insurers can now reuse past work, handle multiple, multifaceted rule types and use straight-forward rule reapplication to boost system performance, expand operational efficiency and design offerings around the needs of the business vs. the limitations of the technology.

3. Shifting Implementation Strategies

Insurers have also shifted strategies to implement policy administration systems. In the past, a standard policy administration implementation used a phased approach. An introductory launch would start with a few lines of business, a small number of states and renewal on conversion. Ensuing releases would then introduce the subsequent lines of business and states on a schedule that spanned multiple years.

Today, insurers are starting to respond to the anticipated longer windows, sizable scope and considerable investment by expediting the completion of the initial launch. Insurers now can implement policy administration systems without the constraints imposed by prior work in the initial launch and include legacy lines and data conversion in subsequent releases. The market has also shifted to go live with new business in an extended pilot program on legacy products before advancing conversion on renewal. Lastly, smaller insurers have been deploying full-suite implementation (policy, billing, claims, reporting and portals) to leverage greater value within the standard timeframe for implementation.

4. Support for Global Expansion

Carriers are increasingly moving beyond their domestic regions to tap into markets that present additional expansion opportunities. Many insurers plan to extend their business overseas to drive growth and profitability. An increasing number of multinational insurers are also looking into emerging markets, including the Asia Pacific region, because of their far higher growth rate than traditional markets in North America and Europe.

Expanding beyond domestic borders requires policy administration solutions that can adhere to country-specific requirements. New geographies spell new business and IT-related challenges across market maturity characteristics, distribution channel preference, insurance product preference, regulatory laws, and customer behavior. As the distribution mix evolves according to consumer and geographic diversity, adaptive policy administration systems will help insurers to respond to these heterogeneous operating environments with alacrity.

5. A Seamless Customer Experience Across Technologies and Interfaces

Insurers have long sought to develop integrated solutions that deliver individualized, multi-channel customer experiences at a reduced cost. Today’s policy administration software brings sophisticated portals and dashboards to support existing and new distribution channels while reducing the complexity when assimilating multiple systems. The best portals work across any browser and facilitate next-generation navigation using powerful search functionality. The most advanced insurers are using policy administration as a platform to introduce adjacent enrichment that provides information or value to customers beyond the benefits of the policy.

DRC’s Policy Administration Solution

The DRC insurance platform provides insurance entities of all sizes end-to-end functionality that’s as versatile as it is powerful. Our integrated solution combines RS X Rating, with comprehensive policy administration functionality to provide Quote, Policy, Rating, Billing, Claims, Agency Administration, advanced analytics and pre-configured third-party integrations. With quote-to-claims throughout the entire insurance policy lifecycle, our platform increases staff productivity and expedites speed to market. We create our software solutions to serve the diverse needs of agents, shoppers, insureds and back-office operations. Our software processes billions in written premium each year. With 24-hour accessible web-based quoting and a robust cloud-based policy administration system, we remain committed to standing at the forefront of traditional and emerging needs to advance the success of our customers.

About DRC

For nearly half a century, DRC has provided powerful and trusted software solutions to the Property & Casualty (P&C) insurance industry. Large carriers, small start-ups, and MGAs alike in the United States and globally deploy DRC’s SaaS and onsite solutions to manage total written premiums in excess of $7 billion. DRC’s web-based administration system expedites implementation, lowers costs and simplifies maintenance across insurance products. Our leading RS X Rating allows business users who price risks and model products in Microsoft Excel® Workbooks to create a version-controlled, web service process throughout the entire insurance ecosystem with minimal need for any programming resource. All DRC clients receive market-leading solutions, expert implementation and our commitment to deliver to their complete satisfaction.