Policy Administration Systems: Building Value over Time

by Donald Light, January 27, 2010
Asia-Pacific, EMEA, Latin America, North America

Abstract

Licensing, implementing, and deploying a new policy administration system is often the biggest, most complex, and most costly technology initiative that a property/casualty insurer can undertake. What must an insurer do over time to realize value from such a system?

In a new report, Policy Administration Systems: Building Value over Time, Celent analyzes the initial and continuing strategies insurers use to produce early and continuing value from policy administration systems. The report also includes case studies of how nine insurers evolved their use of new policy administration systems over several years.


The two basic ways to realize the full value from a new policy admin system are to extend and/or deepen its use,” says Donald Light, Senior Analyst with Celent's Insurance group and author of the report.
 
"Extending addresses what kind of business is put through the policy admin system; and from where that business comes. Deepening is a matter of how it is used, and who uses it. There is a great deal of fluidity in how an insurer can blend extending initiatives and deepening initiatives from year to year," he adds.

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
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

4

The Prime Directive (Insurance IT Version)

5

What Takes Time: Inside and Outside the Policy Administration System

8

Value in Year One: Picking Low Hanging Fruit and Paving Cow Paths

10

Value in Year Two and Following: Extending and Deepening

12

Case Studies

15

Conclusion

22

Leveraging Celent’s Expertise

23

Related Celent Research

25

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