(Steve Hauck is Co-CEO of Agencyport Software.)

Back office needs at p&c insurance companies have changed significantly over the last few decades. Expanding existing products, introducing new ones, changing distribution strategies, and the need for business agility—among other factors—have put enormous pressure on legacy policy administration systems, most of which are unable to handle the growing demands of the marketplace.

CTOs and CIOs know they need to act, but the time and cost involved in a replacement project is daunting—as is a plan for migration of policy data from the old system to the new one. While data migration is complex, it doesn't have to be feared. With the right tools, Carriers can ensure an efficient and accurate movement of data into a modern system.

Let's break down some of the myths around data migration and try to take some of the fear out of moving ahead with a new policy administration system (PAS).

Myth: Policy administration system data conversion is a straight-forward mapping exercise—fraught with the inevitable errors inherent in such processes.

Myth Busted: The movement of data from legacy policy administration systems to modernized systems is complex to be sure, but it does not have to be error-prone or inefficient. Until recently, carriers have had two fairly poor solution choices: straight-through process (STP) or custom coding.

While relatively quick, a pure extract-transform-load (ETL)/STP almost guarantees that bad data will load into the new system. Legacy system data may be bad or outdated; the data structure between the systems may be different; and data fields may not always be apples-to-apples—garbage in, garbage out. At the opposite end of the solution spectrum is a home-grown mapping tool. While more custom in nature, it represents years of arduous and potentially error-prone manpower.

Fortunately, there are modern alternatives to these two choices that actually combine the best qualities of each—ETL for most of the data and a robust web user interface to find and fix errors before they go into the new system. Highway and high touch combined.

Myth: Data migration is time-consuming and expensive.

Myth Busted: It's true that because Carriers have been forced into either an STP or custom code strategy, policy conversion has historically been a laborious, costly process.

Today, however, data migration associated with a PAS conversion can be executed using tools that accurately define a policy's definition—mitigating mapping surprises—and scrub data associated with mass data transfers—reducing custom code.

These tools also automate the processes at predetermined policy term periods, providing continuous movement of data, requiring less overall handling, and less time to verify and troubleshoot. Set the schedule and the systems take it from there with human intervention only when necessary—rendering PAS conversion projects both manageable and cost-effective.

Myth: There is no need for detailed reporting during policy administration system conversion because it's a back end process.

Myth Busted: Because the conversion process is highly complex, it's critical to know what's happening step-by-step along the way in order to avoid costly errors at the far end. Reports can answer key questions before those errors occur. Is the data complete? Is it in the correct format? Are there duplicate records? Why was a transaction stopped?

Reporting tools help clear up data obstructions in a PAS conversion. If you can identify the bottlenecks, you can quickly improve the elements used in the conversion resulting in fewer data mismatches and fewer hours spent trying to decipher what went wrong. Reporting tools can pinpoint these hiccups and help a carrier correct them immediately.

Myth: A policy conversion tool is a once and done solution and isn't worth the financial investment.

Myth Busted: Carriers may hesitate to invest in a PAS migration solution for fear that once the conversion is complete, they have a useless tool sitting on the shelf. Insurers can maximize return on their investment by choosing reusable tools that can handle many aspects of ever-changing back end system configurations and underwriting appetite.

The same tools used for policy migrations can also automate book-of-business analysis, inter-carrier book rolls, and rate and underwriter modeling. If the solution is designed specifically for the P&C industry and offers a balance of mapping and UI capabilities, it can be used over and over again.

Conclusion

Implementing a new core system is an enormous strategic investment, and risk-heavy. Moreover, until recently, carriers have been forced to take on additional risk by inevitably populating the new system with redundant or inaccurate data, or spending a fortune in development hours trying to prevent it—costly and frustrating steps backward. Fortunately, solutions to help get clean, accurate data into a new core system quickly are improving all the time. Carriers should not have to sacrifice cost for accuracy—or vice versa.

(Steve Hauck is the Co-CEO of Agencyport. He most recently led his management team in a buyout with Thomas H. Lee Partners and Dowling Capital Partners of Sword Insurance from the Sword Group. Prior to being named Co-CEO of Agencyport Software, Steve co-founded AgencyPort in 2001 after nine years in financial services sales and marketing. Before AgencyPort, he was a director with The E*Trade Group and head of US Institutional Sales and Marketing. He holds a bachelor's degree from Denison

Special Reports /

Myth Busters: Data Migration and Policy Administration

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