More intuitive software and better connectivity have carriers looking closely at policy administration systems once more.
By CYRIL TUOHY, managing editor of Risk & Insurance?
NASHVILLE, Tenn.---After taking a back seat to underwriting, data conversion, billing and customer service issues over the past three or four years, policy administration systems are back on top of insurance carriers' buying agendas, according to insurance accounting and technology experts.
"Policy administration is hot," said Mark Roth, vice president of business development for the Insurance Accounting & Systems Association (IASA), gathered for its annual meeting at the Gaylord Opryland Hotel and Conference Center from June 5 to 8.The question, of course, is why? Why the resurgence in policy administration systems, which are considered the core technology around which insurance companies build their infrastructure.
Bill Montei, partner with Echo Ridge Partners, a newly formed policy administration software vendor targeting insurance carriers with between $2 million and $80 million in annual premium, said that policy administration systems have come a long way in making their front-facing graphical user interfaces more intuitive to use.
"Connectivity is much better today that it was five years ago," he said. "Today, there is more choice and better designs."
"Systems have matured," said Larry Stern, vice president of AQS Systems, a Hartland, Wisc.-based provider of policy administration and business support services to commercial property/casualty carriers.
These days, just about every carrier has a good Internet portal, can load buckets of data in a blink of an eye and can load out-of-sequence information on customers, said Stern.
Prices are also coming down, added Montei.
The better economy has caused carriers to shift from reducing costs to looking for new ways to grow again, said Denise Garth, senior vice president of strategic marketing and product management for Omaha, Neb.-based Innovation Group.
DIFFERENT THAN THE PAST
Improving billing and data systems are good ways to retain the customers you already have, but they don't usually provide new avenues for growth like policy administration systems do.
"Policy administration allows you to grow the business, and growth has to be different than in the past," Garth said.
Seamless policy administration, however, is also among the most difficult IT projects to implement, and carriers are looking to software providers not just to offer systems, but to deliver top-flight service as well.
The advent of the "on-demand" world, in which clients expect carriers to deliver policies almost immediately anywhere in the world, has put a new onus on policy administration systems, said Bill Sinn, strategic industry and marketing director for Pitney Bowes Business Insight in Lansdale, Pa.
Carriers need to have a "360-degree" view of their customers, and need to know that the young executive who's just cancelled his startup consulting firm's policy is also the son of the state's most successful auto dealer, for example.
"People are asking, 'How can we interact with the customer better? How can we excel?' " Sinn said.
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