Insurance Business Value from Business Process Management & Business Rules Engines
San Francisco, CA, USA December 8, 2003
Two related technologies, business process management (BPM) and business rules engines (BRE), are emerging as high-profile solutions for many insurers. To realize value from these technologies, insurers must cut through the jargon, and use business-based criteria to decide whether and where to deploy them.
Insurance is a process business and a rules business. Insurers must price, underwrite, and adjust consistently. Success depends on making smarter decisions than the other company. Can business process management (BPM) and business rules engines (BRE) solutions give insurers a competitive advantage?
BPM and BRE solutions can make a significant impact on every core insurance process, says senior Celent analyst Donald Light, author of the report. The most difficult initial challenge may be narrowing down and prioritizing where to deploy them. BPM fits well with costly and/or fragmented processes.BRE fits with high financial impact and/or complex decisions.
Light continued, These solutions can provide a significant ROI. But insurers will realize the greatest value through building virtuous circlesby using iteration (continuous improvement) and diffusion (applying these components in new processes and business units).
Celent defines a complete BPM solution as one which enables the design, integration, execution, monitoring, and optimization of workflows among people and applications.
Similarly, a complete business rules engine (BRE) solution enables the design, integration, automated execution, and optimization of decisions within processes.
Celent estimates that in 2004, total new project IT spending in the U.S. on BPM- and BRE-related projects will beUS$700 million, or just under 10% of a total US$7.2 billion of new project IT expenditure. This total includes all aspects of new project spending: software and consultants (about 44%), internal staff (37%), hardware (13%), connectivity/bandwidth and other (6%). The largest portion ofBPM- and BRE-related new projects will be in the core processes (underwriting, policy administration, and claims), followed closely by distribution. The major categories of BPM & BRE solutions are: horizontals, integrated and packaged, and verticals.
The report concludes with specific recommendations for how insurers can choose BPM and BRE vendors, how banks and securities and investment firms can utilize BPM and BRE, and how vendors should position their offerings.
The 32 page report contains 12 figures and charts.
A Table of Contents is available online.
of Celent Communications' Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left. Non-members should contact email@example.com for more information.
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].
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|San Francisco, CA, USA December 8, 2003
Insurance Business Value
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