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INDUSTRY

L/H/A Insurers Have Many PAS Options

Surveys and studies show that insurers are actively implementing new policy administration systems. In September 2011, Celent released its “Policy Administration System Vendors, North American Commercial P/C Insurance 2011” report, and later, released a similar report for the life, health and annuities industries. The analyst and consulting firm says that despite continued economic turmoil, there is still a strong interest in renewing and/or replacing policy administration systems (PAS), and these initiatives are necessary to help the industry address growth, service and distribution imperatives.

In its report—“North American Policy Administration Systems 2011: Life,
Annuities, and Health ABCD Vendor View”—the firm profiles 18 systems in
use among that market and says that since its first report in 2005, activity
level has remained active among both insurers and PAS vendors. Several of
the profiled vendors have made important advances in usability and person-
alization, adding Web-based portal interfaces that benefit customer service
representatives, underwriters and field users, according to the report.
“Clients who have implemented systems in the last three years report greater
satisfaction with system functionality and ease of making changes to their
base solution,” said Karen Monks, Celent analyst and co-author of the report.
“As vendor systems become more configurable and have more modern
user interfaces, clients will recognize both hard and soft benefits from their
system modernization.”
Insurers have a wide spectrum of systems and vendors to consider. They
should begin the process by looking at their own unique mix of lines of busi-
ness, geography, staff capabilities, business objectives, financial resources
and IT group size, Celent says. Some systems provide broad and extensive
out-of-the-box functionality that matches an insurer’s lines of business and
operating model. Other systems offer powerful configuration tools to build
capabilities for both known and future requirements.

Big Buys

COUNTRY Financial has licensed the Policy Writer software suite from Adaptik Corp. to serve as the heart of its next-generation personal lines policy administration platform, the companies report. Policy Writer will replace COUNTRY Financial’s current legacy systems that support all of its personal lines business, including auto, home and agribusiness.

The key required features COUNTRY desired in the system include a common intuitive system to support all of its personal lines, straight through processing throughout the life cycle of the policy, real-time transactional processing, single-step out-of-sequence transaction processing and pre-integration with leading rating and billing solutions.

According to Adaptik, Policy Writer
will enable COUNTRY Financial to
leverage a single platform to support its
financial representatives and internal
users across all lines of business. In addi-
tion, the insurer plans to use the system
to streamline its response to market
demands for new or refined products
and realize operational agility through
the system’s automation and rules-based
straight-through processing.

Policy Admin Investment Needed

Ernst & Young (E&Y) predicts property/casualty insurers will continue to struggle against a tide of further economic ills.

According to E&Y’s “Property-Casualty Insurance Industry Outlook,” property/casualty carriers will operate in a low premium growth environment throughout the year, adversely affecting insurer profitability and resulting in the fifth consecutive year of negative performance.

Along with these challenging predictions, the consulting firm offers some advice. E&Y noted that increased regulatory compliance will compel insurers to measure risk in new ways, which will affect their capital and risk management strategies.

Among the five strategies that U.S. property/casualty companies need to explore in 2012 to improve their chances for success is investment in core systems.

Insurers face mounting pressures to modernize core insurance systems such as claims, policy administration, underwriting and billing. Competitors have set the stage for this need for improvement, along with heightened customer expectations and, above all, increasing costs to maintain and upgrade systems. “Faced with limited investment alternatives yielding an attractive return, insurers are investing in themselves to position their operations for growth and improved profitability,” notes the firm.

PAS Vendors Making Moves

Cover-All Technologies Inc. has acquired Blue-
Wave Technology for an undisclosed amount of cash.
The acquisition of Blue Wave, maker of the claims ad-
ministration software package Pipeline Claims, is part
of a broader push by Cover-All to expand its footprint
in the property/casualty marketplace. In 2011 the
company, which provides policy administration and
business intelligence technologies, launched products
aimed at commercial lines as well as business intel-
ligence and analytics, resulting from its 2010 acquisi-
tion of Moore Stephens Business Solutions’ business
intelligence and analytics solution.