Hitting the Wall

Leading insurers have begun to recognize the strategic importance that policy platforms play in critical process improvements. These systems provide a significant percentage of the business process and core data that drives the business, from policy rating to claims management to routine customer service activities. Without effective policy management platforms, business process transformation and data management, insurers struggle to:

- View customer data across multiple products to identify the most attractive cross-selling opportunities.

- Share claims data with underwriting departments to ensure good underwriting decisions and mistake avoidance, or to make it easy to re-rate all existing policies when a customer changes address.

- Provide real-time policy details via the Web rather than by telephone to drive down operating costs.

- Verify coverage at the time of the first notice of loss to effectively detect fraud and reduce turnaround time for customers on simple claims.

Isolated, inconsistent processes also make it difficult, if not impossible, for business leaders to share, monitor and manage the complex types of underwriting, claims and customer service business processes that cross the enterprise and provide many of the best opportunities for operational cost reduction (leakage) and business and process differentiation. For example, with bodily injury claims, the claims business unit wants to monitor and manage the multitude of internal handoffs and external handoffs with physicians and attorneys to ensure positive outcomes but finds it difficult to do so without optimized and integrated workflow supported by a business platform and a centralized way to collaborate. Another example is when underwriting management wants to change an underwriting rule - it might wait weeks or months to make changes, only to find it difficult to understand the impact of the change on the book of business.

The result of a weak policy administration system is unhappy customers, higher-than-necessary operating and claims costs, and a limited ability to proactively redirect and manage the business.

Leading policy management platforms centralize all policy operations into one business platform. At its core, the policy life cycle is defined as a set of functions, tasks and subtasks that handle application submission, quotes, new business, issuance, endorsement, cancellation, reinstatement and renewal. The leading platforms provide best practices, templates and toolsets that enable insurers to quickly define, model, implement and modify processes to meet their particular business needs.

Also at the heart of a leading policy management platform are business process capabilities that range from screen flow to rules engines and "what if" modeling tools. Enabling modern business processes, modeling and workflow management allows the insurer to openly integrate best-of-breed tools and partners.

Externalized Business Processes

To increase the sharing, efficiency and process effectiveness of core business functions, insurers are externalizing business processes. Externalizing business processes is also a critical step toward the implementation of Web services. Leading policy management platforms enable insurers to more easily integrate with internal and external applications because of their J2EE or .NET and service-oriented architectures.

Policy management platforms will also play a significant role by actively configuring and managing business processes because of their embedded rule engines, workflow and business process management capabilities. Policy management platforms drive a significant portion of insurers' overall investment in business processes and provide one of the most significant challenges - and areas of opportunity - for P&C insurers.

On Solid Ground

A strong policy management platform offers:

- Improved customer service.

- Control and reduction of policy operational and transactional costs.

- Differentiated service types and levels.

- Flexible core business processes that change as the business changes.

- Predefined and shared business process services within the business unit, group and enterprise.