A policy administration system (PAS) should advance corporate strategies, not just keep the lights on. Most legacy systems no longer support today’s business needs. They are expensive to modify, they hinder speed to market, and administrative transactional data lacks insight to true business information.
Legacy systems can seldom provide the real-time response that customers and agents expect. These systems are also at risk of not being able to update products when regulatory or environmental changes occur. Enterprise repositories can provide access to legacy data but with overnight lag time.
A new PAS implementation is a huge investment of time, money, and resources (a 2-4-year effort is normal). Knowing where you stand and where you want to be is vital before undertaking such a transformational initiative.
Learning from the Past
When planning for change:
- Don’t expect to keep the system forever.
- Don’t recreate the past; legacy processes belong and should stay in the legacy system.
- Stay current with vendor upgrades and refrain from creating your own version.
- Keep the original architecture and stay as close to base as possible.
- Use stringent change control guidelines.
- Ask for advice before opting to customize.
Ready, Set, Go
There’s no crystal ball into the future, but nothing lasts forever. The world will continue to change; being able to pivot quickly and often will enable insurers to adapt to new technologies and methodologies.
Implementing the solution should also include the following provisions to ensure a smooth and successful transition:
- Institute a well-orchestrated data strategy and governance policies. Understanding the gold source, keeping the integrity of the data, and avoiding redundancy all support efficiently accessing and maintaining your data.
- Improve your end-to-end business processes and use industry standards when possible.
- Use automated rule execution, workflow, reporting, and analytics.
- Take advantage of vendor and industry best practices.
- Establish configuration guidelines based on your product needs while still adhering to vendor guiding principles. This may mean utilizing out-of-the-box capabilities and avoiding complicated product hierarchies, workflow rules, and business processes.
With all of these provisions, always ask whether this is something that is truly impactful and required for the business or if it is a nice to have.
Future-Proof Your Investment
In strategizing for the long term, be sure to:
- Have a collaborative partnership with your vendor. Consider the vendor team synonymous with your team, and join client advisory groups to prioritize enhancements and provide input to the vendor’s roadmap.
- Maintain requirement traceability. Even though the business rules may now be in configuration tables rather than COBOL code, it still is important for future maintenance that those business rules can be traced back to requirements and original source documents such as product specs.
- Keep the business definitions and explanations in the schema (or data dictionary) current. Making data more accessible is only useful if the data elements are understood.
- Avoid the “not invented here” mentality and embrace the power of the global technology sector. Encourage the use of open-source solutions, integration standards like ACORD, and partnering with InsureTech and other third-party solutions.
Modern PAS capabilities are moving rapidly; the longer insurers wait to start, the further they will have to go.
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