Insuranceciooutlook

What is the Significance of Insurance Policy Administration Systems

By Insurance CIO Outlook | Tuesday, February 23, 2021

In the modern marketplace, policy management software systems use regulatory capabilities to enable carriers to innovate and respond to shifting market factors.

Fremont, CA: Early policy management systems had large structures and could only meet limited requirements with minimal capacity to integrate outside the back office or with distribution channels. However, with the flexibility of functionality in these systems expanding along with the ubiquity of the Internet and social media, modern policy management systems today face virtually no restrictions on distribution channels.

With older policy management software, companies were forced to write or edit code whenever they wanted to make a change in product or roll-out innovations. Today, companies require integrated, flexible integration points with the adaptability that comes as standard upon purchase.Insurers are demanding technology that seamlessly integrates with existing solutions to increase market agility and speed before greenlighting the purchase and implementation of the policy management system.

The Future of Policy Administration: Five Key Trends

Rule Capabilities 2.0

Those days are gone when a policy administration solution could simply promote its system as rules-based in order to differentiate it from the rest of the market. Today, all relevant systems include this functionality. The term "rules-based" itself simply implies that business or underwriting rules are part of the system.

In the modern marketplace, policy management software systems use regulatory capabilities to enable carriers to innovate and respond to shifting market factors.Insurers can now re-use past work, handle multiple, multi-faceted rule types, and apply straight-forward rule re-apply to boost system performance, expand operating efficiency, and design offerings around business needs vs. technology limitations.

Supporting Global Expansion

Carriers are increasingly moving beyond their domestic regions to tap into markets that offer additional opportunities for expansion. Many insurers are planning to expand their foreign business to drive growth and profitability. Increasing numbers of multinational insurers are also looking into emerging markets, including the Asia-Pacific region, due to their much higher growth rate than traditional markets in North America and Europe.

Expanding beyond national borders requires policy management solutions that can meet country-specific requirements. New geographies present new business and IT-related challenges across market maturity characteristics, distribution channel preferences, insurance product preferences, regulatory laws and customer behavior. As the distribution mix evolves according to consumer and geographic diversity, adaptive policy management systems will help insurers to respond to these heterogeneous operating environments with alacrity.

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