Look Before You Leap

Taking care of business. For insurance companies, taking care of business means acquiring, servicing, and keeping policyholders. It means making it as easy as possible for policyholders and intermediaries–whether they are career agents, independent agents, insurance brokers, or others–to conduct their transactions with the firm. It means having the requisite information available to regulators on a timely basis. It means that because policy administration systems (PAS) support those functions, PAS are a critical part of the portfolio of systems enabling insurance companies to take care of business.

However, a significant number of insurers are using PAS that are at least 20, 30, or even 40 years old. These PAS were developed and deployed for another era of insurance commerce–a time period that generally could be characterized as slower; with simpler products, less demanding clients, known competitors, a relatively straightforward relationship between the insurer’s home office and its distribution channels, and regulators moving with the rhythm of the market.