Despite the COVID-19 pandemic, interest in policy administration system (PAS) replacement remains strong at life and annuity insurers; they have several viable options when considering a new PAS. As insurers look to improve speed to market and customer experience while adapting to regulatory changes, it is imperative to understand the current market and the technology that will influence it in years to come.
Life and annuity insurers are looking toward vendors that offer more implementation options that can lower risk and cost. Insurers are also in search of benefits like improved data transparency, speed to market, workflow, and reduced maintenance and operations. Vendors are responding by offering hosted/SaaS-based implementations, componentized implementation approaches, and microservices. Carriers are adopting more granular and nuanced approaches that leverage new PAS platforms and improved integration approaches and systems architecture.
New PAS implementations are expensive: They take time, money, and resources. But carriers are increasingly working with SaaS-based and hosted solutions to reduce time and cost. Challenges still exist with conversion and project risk management, but insurers are realizing benefits in efficiency of operations, improved functional capabilities, and better data management—all of which carriers cite as key project drivers.
Some carriers now see new PAS deployments as part of a broader strategy for line of business management that complements a broader BPO strategy, allowing for the quick implementation of new (and sometimes, greenfield) operations without becoming encumbered with legacy business processes or structures. The COVID-19 pandemic has introduced a number of new risk factors that carriers need to consider in their future-state planning. This includes close evaluation of financial and operational risks associated with both software and BPO/ITO providers.
Now more than ever insurers have a number of viable options for new PAS vendors, with many life and annuity solutions that are maturing and providing more flexible and configurable architectures, as well as stand-alone module capabilities. While there are still challenges with managing overall project risks and conversions, carriers are realizing benefits in efficiency of operations, improved functional capabilities, and better data management, all of which favorably position insurers for the future.
To learn more about this space, read our most recent Novarica Market Navigator, Life/Health/Annuity Policy Administration Systems. It provides detailed profiles of 23 vendor solutions with information on each of the vendors’ capabilities, technology, and market position to help insurer CIOs understand their options in the marketplace.
Add new comment