Celent Identifies Policy Administration Trends

NU Online News Service, July 29, 12:38 p.m. EDT

Technology vendor offerings for the policy administration sector that were limited in 2007 have become commonplace today, according to a consulting firm report.

The study by New York-based Celent, "Trends and Predictions for P&C Policy Administration Systems 2009," identified five trends in the policy administration space.

Celent cited the emergence of underwriting and service desktops; improved "new business automation" capability; convergence of ultra-configurable and domain content rich systems; increased focus on usability and screen design; and a rise in European partner certification programs.

To help underwriters and service staff with their key metrics--including decision quality for underwriters and policyholder/producer satisfaction--vendors have developed environments called desktops, generally consisting of "a comprehensive set of screens, designed in a uniform and interrelated way to facilitate the work of an underwriter or service staff," Celent said.

The firm found that "as insurers become more sophisticated in their assessment of how well their policy administration system is supporting their underwriters and service staff, vendors are creating environments crafted to enable those users to work faster and smarter. These environments are underwriter and service staff desktops."

Among other functions, according to Celent, these desktops often have navigation tools and methods allowing a user to switch easily between screens/tabs/tasks, as well as the ability to drill down to details while retaining place in an existing task.

The second trend, "new business automation," is a cross-system process that assists in the goal of integrating systems, rather than having siloed services, Celent said.

Technology advances have allowed vendors to increase support for new business automation, the Celent report stated. "With many vendor systems and insurer infrastructures embracing a service-oriented architecture," according to the report, "it's easier to orchestrate a true functional flow across multiple areas of the business."

Celent defines the third trend, "ultra-configurable system," as a system where "an insurer can deploy their custom implementation with little to no code."

The report noted, "Ultra-configurable, meta-data driven, rules- and tools-based policy administration systems (PAS) are now so key to the modern PAS marketplace that it is more a reality of the space than a trend."

Continuing to develop the look, feel and usability of interfaces is also a key trend, Celent said. "Focusing on the look and feel may seem trivial, given the complexity of business logic behind the scenes. But to ignore the user interface is a mistake, in Celent's opinion, and vendors still manage to differentiate their products by keen attention to usability."

Delivery approaches for policy administration systems in Europe differ from North America, Celent said, and vendors have adapted by establishing partner networks with specialist knowledge in target national insurance markets.

"Partner programs have been in place for many years, but the current trend is to formalize these relationships through certification programs. This is similar to what has been in place at Microsoft, where solution providers are graded according to their skills and offerings as certified partners of Microsoft," the report said.

These certification programs benefit vendors because they create a "transparent and fair process that assists customers in making the decision for an appropriate partner," according to the Celent analysis.