Policy administration and issuance is really where the proverbial rubber meets the road in terms of so many insurance industry initiatives and goals. Even though claims adjusting/administration is considered a "moment of truth," it's the specific insurance policy that dictates the terms of that claims settlement. The policy truly is the ultimate representation of a carrier's relationship with its customers (policyholders) and, as such, is where many technology-related efforts having to do with customer analysis, improved underwriting, payments/transactions and servicing come together.
In many ways insurance companies have made tremendous progress in terms of rethinking the terms of policy administration in the 10 years since they started talking about thinking of the policy as a symbol of a customer relationship, rather than simply a contract. Accordingly, more and more is expected from the systems that support those relationships - a big challenge, considering that when we talk about legacy systems in insurance we almost always are talking about policy admin systems. That's why policy administration is the focal point of many companies' hopes and goals - in terms of gaining more insight into policyholders, and improving loyalty/retention - as well as their most difficult challenges, in terms of legacy systems issues, compliance and information management.
But it's not just about technology and the financial and logistical challenges of system upgrades or replacements. Customers are changing - in particular, the emerging insurance customer of the near and far future (young people) is going to have needs, behaviors and expectations very different from the policyholders of today and the recent past (Baby Boomers and their parents/grandparents). Increasingly, demographic analysis and market segmentation will be equally critical features of policy admin systems as are premium payments and beneficiary changes.
In this special newsletter edition of Insurance & Technology's Connected Enterprise focusing on achieving straight-through processing in insurance, we will examine new approaches to policy administration and issuance processes. Additionally, a live webcast on August 15, produced by I&T and CSC, will explore industry efforts to transform policy issuance and administration and some of the options and best practices related to this endeavor.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio