Filed Under:Carrier Innovations, Information Security

Ahead of the Crowd

The first step in understanding how a policy administration system gives an insurer a technology edge is to identify what kinds of value a policy administration system could provide. The best way to approach the kinds-of-value question is through Celent’s Prime Directive for insurance IT:

The mission of IT is…

Next, an insurer should seek to understand and weigh the capabilities of each vendor (as a long-term business partner) and each solution (technology, functionality, customer base, service quality, cost, implementation track record, and so on). Will the vendor relationship and the system’s capabilities and flexibility facilitate or hinder the achievement of the insurer’s strategic, operational, and technology strategies and objectives?

These considerations are the beginning of a longer process of understanding requirements, long lists, short lists, and due diligence.

In one sense, the definition of a policy administration system is very simple: It is the system of record for all policies that an insurance company has written. At this most basic level, a policy administration system is a repository of policy-level data related to objects of insurance, coverages, limits, conditions, exclusions, duration of the policy, endorsements, and so forth. A permanent policy record is created at the time a policy is issued and includes the complete history of the policy through renewal, termination, cancellation, and/or reinstatement.



• Renew, with or without changes in terms and price

Policy Service

Service desktop: broadly similar to the underwriting desk top; a set of purpose-built screens, designed to provide policy service staff to handle all or nearly all of policy service inquiries and transactions .


Celent has limited the definition of a policy admin system to include a set of core processes, sometimes with advanced functionality. But vendors do not necessarily limit their definitions of a policy system in the same way, and many have attempted to build out some or all of the end-to-end components that an insurer might need. Some insurers are just looking for a best-of-breed policy administration system to work with other core systems already installed, but other insurers may be looking for a vendor who can offer solutions for parts of their insurance operations.

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