Why Donegal Insurance is Saving Policy Admin for Last

Many insurers are in the midst of big policy administration replacement projects. But Donegal Insurance Group, a multi-line P&C carrier based in Pennsylvania, isn't sweating it right now.

The company is still hard at work with legacy system replacement, however: Donegal recently announced its engagement with Guidewire BillingCenter, and is also implementing a rating engine from Insbridge and forms software from HP Exstream, CIO Sanjey Pandey tells Insurance & Technology. After all that's taken care of, Pandey says, the company will tackle policy.

Sanjay Pandey, Donegal Insurance Group

"We decided to take a phased approach to legacy to mitigate the risk to the company, and at the same time we're focusing on stuff that impacts a customer," he says. "We would like to enhance our customer service and speed to market to our agents and policyholders on the billing side. We are limited in producing modern-looking documents. And in this day and age you have to come out with products quickly." The new billing, rating, and forms management systems will address those shortcomings, he explains.

"The issue we were wrestling with whether to do a rip and replace, but we felt that would be disruptive" because acquisition is a major part of the company's growth strategy, Pandey adds. "We want to get these side systems out of the way first -- that will take us 12 to 18 months -- then we can tackle policy."

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The first legacy system Donegal replaces was actually its claims system -- seven years ago, Pandey notes. That was when the company first recognized the need to make core upgrades. But after completing the claims project, other priorities emerged.

"Our focus for the past five or six years was to do a lot of investment in our portals and add straight-through processing and ease of doing business technologies for our agents," he says.

Now that those projects are completed, the company is back to its core system replacement path. Its experience with ClaimCenter has shown it the power of modern platforms.

"We're right now trying to launch into some predictive analytics with claims, since we have such easy access to the data," Pandey says. For BillingCenter, the goal will be to implement electronic bill presentment and some mobile capabilities: "things that our COBOL-based systems can fudge, but they come packaged in these new platforms," he says.

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