Filed Under:Carrier Innovations, Technology Solutions

Configuration or Contortion? Making the Best Choice in Policy Systems

When choosing a policy administration system, insurers are looking for the ability to make as many changes as possible through “rules and tools”-based configuration rather than code-based customization.

“Configurability is seen as table stakes for policy administration and most other core systems as well,” says Donald Light, senior analyst in Celent’s insurance practice.

BALANCE

Configuration requires balance. In choosing among vendors, insurers need to balance their ability and desire to configure a policy administration system against the amount of out-of-the-box domain content and insurance-specific functionality it provides.

Smith says CFG found that balance in the ALIS policy administration system from FIS Software, which merged with Sapiens in July 2011. “The system is built with a particular underlying process flow and data model that gave us something to standardize on,” he explains. “At the same time, the designer provides a level of abstraction between product data and processes that allows us to do business-level configuration.”

First deployed in late 2009 with CFG’s single-premium whole-life product, the ALIS platform has allowed CFG to launch new products in under three months, compared to about a year under its legacy platforms. The company is continuing to consolidate remaining legacy environments to ALIS.

DISCIPLINE

Configuration requires discipline. Configuration provides powerful capability to make changes quickly and truly customize a system to meet insurers’ needs. Companies need to wield this power wisely.

ALIGNMENT

Configuration requires alignment. Configuration can shift some traditional IT responsibilities to the business side. Insurers need to understand that, rather than cutting IT out of the change process, this shift makes alignment between IT and business essential.

“It’s realistic to rely on vendor expertise or knowledge experts who designed the system in [implementing] your initial lines of business so you don’t go down paths you don’t need to,” says Tom Chesbrough, senior vice president of enterprise products at StoneRiver.

Ideally, configuration will not only require alignment but facilitate it as well.

Insurers also need to understand that configuration still requires traditional IT governance and change management.

“With so much control entrusted in their hands, the carrier will soon realize that the content creation is just one part of the whole puzzle,” says Manoj Porwal, assistant vice president of product architecture at MajescoMastek. “There are other critical and important aspects like version control and configuration and release management that they have to deal with. We have seen lot of carriers struggle with these two aspects.”

Companies with a big skills gaps may find it difficult to achieve the speed-to-market benefits promised by modern administration platforms. “If they are learning to configure at the same time they are implementing, that is directly correlated to the failure of projects to meet the original scope and timeline,” says Harris-Ferrante.

In its configuration team, CFG has carefully chosen people with an analytical background. “You don’t need a programming background, but you do need to be able to understand why something has happened and how to get it to work—people who can work through the logic of configuration. Fortunately a lot of our business users have that,” says Rubin.

MANAGE CAREFULLY

Migrating to a more configurable policy administration platform “has definitely changed our IT world,” says Harper. “We’re already much more responsive than ever before.”

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