Maximizing investment in policy administration systems
Today’s cloud-based policy administration systems (PAS) are designed to enable both P&C and Life insurers to manage policies through their entire lifecycle and are the foundation of carriers’ digital strategies. These types of platforms are a boon to carriers looking for ways to enhance their customer relationships and develop more effective offerings but many carriers aren’t leveraging the full potential of these systems.
Carriers know they need to adopt digital processes to stay competitive and that cloud-based technology can expedite that transformation. We’re seeing many of our clients implement PAS platforms to take the first steps towards more effective digital operations. However, while implementation brings its own challenges, the true challenge lies in driving value over the long-term and maximizing the platform’s capabilities to serve larger business goals.
The Benefits of a PAS Platform
Carriers often implement PAS platforms with the goal of modernizing their processes and becoming more agile in the market. However, many carriers lack a continuous delivery plan to ensure that they are truly realizing the benefits of the new platform such as product and feature flexibility, experience personalization, rating & pricing flexibility and acceleration through regulatory requirements.
Measuring the impact of a PAS implementation
To achieve success with Policy Administration System (PAS) platforms, it is essential for insurance carriers to establish methods for measuring the platform’s impact on their business. Considering recent inflation trends, carriers must determine the speed at which they can implement rating and pricing changes using the new PAS. This metric will also indicate how quickly they can develop and offer new products and features to their customers. Given that departments of insurance frequently raise objections to filings, the ability to rapidly make changes to insurance products will be a crucial measure of success. Carriers should also develop a continuous review loop to see how the platform performs over time. This will help them to identify areas where the platform can be improved and to make necessary changes. Effective measurement should be the basis for improvement. When it comes to seeing results from a PAS implementation, the key is to continuously review the efficacy of the solution and look for opportunities to improve within the performance data. A key outcome carriers must look at is whether they have been able to deliver innovation to their customers with the platform. Has the PAS solution enabled the business to effectively anticipate the needs of the market? Have new products been piloted and released on a continuous and timely basis?
Data Accuracy is crucial
PAS platforms should help carriers measure whether their innovation is generating ROI and enable them to move quickly to iterate on products as needed. To do this, carriers need to make sure the data coming from the PAS platform is accurate and that problems with data accuracy aren’t negatively impacting claims or billing systems. They also need to consider whether they are fully leveraging the data they have. Ideally, carriers would be able to extract the data and use AI and data science to perform analysis and generate insights which are then fed back into the PAS platform so that users can engage in data-driven decision making. As an example, rates should be updated as quickly as possible in production with rate changes happening as fast as the pricing and actuarial teams provide feedback.
Optimizing your investment with post-implementation health checks
Setting up a recurring health check of the overall PAS product and the lines of business associated with it helps carriers ensure that there’s alignment with the original goals of the implementation. These health checks should inform new goals going forward.
Additionally, the health check needs to dive into the operating costs of customer service representatives and underwriters. The PAS platform has to create more opportunities for growth while reducing costs and boosting efficiency. Carriers can measure success by benchmarking team productivity before the solution was introduced and compare current efficacy against the projections made at the time of implementation. Finally, carriers can zoom out and take a look at whether the solution has helped the team develop revenue-generating products. They should consider if the product teams have been using data: determining if rich data is readily available or if data is still siloed in disparate legacy systems. Product teams should be using data to inform their product strategies and a PAS solution should enable a more holistic view of customer data across the organization. If carriers find that data optimization is still an issue, they need to reprioritize encouraging adoption of data-driven processes or assess whether the platform itself is creating barriers to data accessibility.
If you’re looking for ways to get more out of your PAS investment, I would love to connect. Feel free to reach out to me here.
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