Core claims systems haven't quite caught up with the pace of sales for policy administration systems in the insurance market, but the move is on, thanks in part to vendors and insurers embracing new technology for the solutions. Donald Light, senior analyst in the insurance group at Celent and author of the research group's recent report, "Core Claims Systems Vendors 2006," believes an important trend in claims technology has been to migrate existing core claims applications to modern platforms, such as Java J2EE or Microsoft .NET. "While there still are some well-recognized vendors using older languages and platforms, they are becoming a distinct minority," he says. "Several of [the claims vendors] have indicated they have plans over the next few years to do that migration." He predicts over the next five to 10 years virtually all the development for vendors and most of the maintenance and customization for insurance carriers will be done in J2EE or .NET.

Another trend Light sees in the current claims market is to build rules or workflow functionality capabilities within the claims systems themselves. "An insurance company always can go out, buy a business rules engine or a BPM solution, and lay it on top of its own claims system or any other system it wants to interface with," he says. But he contends the proper direction is toward the design and control of workflow and the creation of rules within the claims packages. These upgraded packages bring advantages to insurance companies that wish to streamline their processes or automate certain steps within processes to speed those processes and make them more consistent, he notes.

As carriers migrate to .NET or the J2EE platform, typically they'll include the workflow and rules functionality, continues Light. "There is nothing inherent in being on a .NET platform that says you now must have a rules engine or workflow capabilities, but it is basically a market-driven demand," he points out. "A particular solution will be looked at as coming up short if it does not have those capabilities."