After delaying project kick-offs because of the financial crisis, life, health and annuity insurers are replacing policy administration systems at a high rate due to a number of competitive pressures, according to Novarica's first Market Navigator report, which outlines the business case and profiles several relevant vendors.
According to the report, authored by managing director Chad Hersh, developing products and getting them to market quickly is a top driver of the increased activity, as exemplified by Allianz Life's implementation of Accenture's ALIP platform earlier this year. Other drivers include, according to the report:
- The addition of group life/health (including voluntary benefits and worksite marketing) business for some carriers, and the move into these products by health insurers
- A desire to reduce the sizeable costs associated with running myriad legacy systems on aging platforms
- Keeping up with competitors who are modernizing
- A desire to reduce dependence on vendors to maintain or enhance the system, or to make day to day changes to rates, underwriting rules, etc., thereby reducing long term total cost of ownership
Recruiting and retaining the best producers is also a major concern, the report adds:
"The new generation of producers ... simply won't stand for the challenges presented by legacy solutions," the report says. "This is critical for either attracting captive agents or for increasing wallet share with independent agents."
Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio