More than one IT leader has been jolted out of a deep slumber, suffering cold sweats in the middle of the night, over concerns about the installation of a new policy administration system. There are plenty of reasons for them to worry, starting with the complexity of the project and concluding, as always, with the amount of money being invested. Obviously, not every project fails, but most insurers that have been involved with this type of project have stumbled along the way. Learning such lessons does not eliminate all risks involved with subsequent implementations, but some of those risks can be reduced through experience.

Take, for instance, Jim Kennedy, president and CEO at Ohio Mutual Insurance Group and a veteran of policy administration projects. Over his career, he's been involved in four such projects, most recently installing the POINT IN product from CSC at Ohio Mutual. "You talk to 10 people and you probably will get five different views [on implementation risks]," he says. "I've had the pleasure of looking in the rearview mirror at the other three and realizing the mistakes we made."

PEMCO, a regional insurer in the state of Washington, first began looking at policy administration systems in the mid-1990s, embarking on a development project with a technology partner to replace a legacy system the carrier had used for more than 20 years. "Our attempt was to co-develop a new application policy processing system prior to the year 2000," says Stephen Miller, vice president and COO. The plan failed, he explains, primarily because it was a development project. "Things happened in the ownership of our development partner that caused [the project] to lose focus and change direction," says Miller.