It seems only fair that there should be some compensatory dividend for enduring a prolonged winter this year but that is certainly not the case for the P&C industry. In the midst of this soft market, floods and wildfires already resulted in massive losses before the first tropical storm of the year had made its appearance.Bad business results are untimely for companies struggling to modernize, especially mid-tier P&C companies. It would be nice, then, if they could achieve their goals without unnecessarily high systems investments. The prevailing thinking about policy administration may not help.
Despite the welcome availability of newer systems built on more open architecture, the industry mindset is still stuck on the "monolithic" mode. Carrier business and IT execs still think in terms of policy administration rather than the specific capabilities they need. As Deb Smallwood of Smallwood Maike & Assoc. puts it, carriers are thinking from back office to front, rather than from front to back. She advises that insurers focus on the capabilities they need and not assume they need a multimillion dollar, whole-hog policy admin replacement.
Vendors can hardly be blamed if they cater to this perception. However, says a CIO friend of mine, "while they will try to sell you the whole system, if pressed they will sell bits of functionality in modular fashion."
That would save carriers buying redundant code where they have already achieved some degree of modernization or simply where they have viable capabilities.
Of course all this fits with the direction technology architecture is taking toward more plug-and-play integration, service-orientation and zero functional redundancy. To get there, the vendors who have the technology may need to make it easier for carriers to shop a la carte, and the carriers themselves need to ditch their legacy technology conceptions along with their systems.Despite the welcome availability of newer systems built on more open architecture, the industry mindset is still stuck on the "monolithic" mode. Carrier business and IT execs still think in terms of policy administration rather than the specific capabilities they need.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio