Benchmarking Policy Administration Upgrades: Advice from Those Who Have Gone Before

by Karlyn Carnahan,  Michael Fitzgerald, September 3, 2014
North America


All IT professionals have a horror story about a system upgrade gone wrong. Since most policy administration systems (PAS) have a 12 to 18 month upgrade cycle for major releases, there are plenty of opportunities to misstep. To address this dynamic, a consistent claim of modern PAS vendors is that multi-tiered architectures and other technical designs ease the pain of upgrades.

Up to now, objective data concerning upgrade metrics was difficult to collect. How long does it really take to upgrade a PAS? Do modern systems live up to the levels of ease that vendors cite?  Historically, have insurers experienced any difference in outcomes when using vendor or third party system integrator staff versus internal staff to execute the upgrade?

In order to close this gap, Celent surveyed 44 North American insurance carriers to provide answers to these questions as well as to understand major challenges faced and overcome. 

Key Findings

  • Most carriers doing upgrades do a point upgrade, and generally these are successful. 
  • All upgrades to modern systems in the survey group were successful, supporting the expectation that these platforms reduce the pain related to ongoing updates.
  • The most frequently reported reason for taking an upgrade is “to gain new functionality” and the second most common driver is “current version no longer supported.”
  • Only 10.7% of insurer respondents used their own employees without assistance from vendors or third party companies. The most common uses of vendor services for upgrades are for coding, configuration, and testing. 
  • Most upgrade projects (64.3%) meet their delivery deadline.
  • Some carriers actually came in below budget on their upgrade, but the vast majority, 60.7%, came in on budget.

“Many carriers report that they have not upgraded their PAS either because they’re homegrown, or, more frequently, because these are new installations,” says Mike Fitzgerald, Senior Analyst with Celent’s research practice and coauthor of the report.  “This places a particular importance on the lessons that can be learned from other carriers’ experiences as the new installations prepare for their first upgrades.”

“For many carriers upgrades are a big deal,” says Karlyn Carnahan, Director with Celent’s Insurance Group and coauthor of the report. “They take months of effort, tie up a lot of staff, and can frustrate business partners. But done well, they go smoothly and can add functionality, upgrade configuration tools, and deliver significant benefits.”

This report focuses on carriers’ experiences in policy administration upgrades. It examines reasons for doing upgrades, staffing strategies, and scope, time, and budgets inherent in upgrades. It also provides advice from carriers on challenges to prepare for and ways to assure a smooth, successful process. 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary



Key Findings



Key Learnings




Description of the Upgrade



Type of System Being Upgraded



Type of Upgrades Performed



Modern Vs. Legacy Upgrades



Reasons for Taking Upgrades



Scope of Upgrade


Staffing Upgrade Projects



Distribution of Staff Used in Upgrade



Vendor Services Provided



Staffing Budgets


Budget and Completion Times



Expected Completion Time Vs. Actual Completion Time



Costs Compared to Budget


Challenges and Advice



Most Challenging Aspects



Advice for Others




Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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