The Business Case for Modern Policy Administration Systems

by Craig Weber, June 30, 2008

Abstract

The transformational nature of policy administration replacement requires careful management of expectations and a thorough understanding of business case elements.

A new Celent report, The Business Case for Modern Policy Administration Systems: Lessons from Early Adopters, explores how emerging policy administration approaches are changing the debate over system replacement.

"This is about culture change as much as it is about technology implementation," says Craig Weber, senior vice president of Celent’s Insurance group and author of the report. "These new tools are compelling, but maximizing their value requires dramatic shifts in IT, staffing, and product strategies.

The report contrasts legacy and modern approaches to help clarify the debate over these tools. It also discusses hard-dollar business case elements, provides a reality check on strategic benefits, and offers observations from the first generation of users of these systems.

"The idea is to help carriers evaluate their options and more accurately predict the potential value that can be derived from modern policy administration investments," Weber adds.

The 24-page report contains three figures and five tables. A table of contents is available online.

Members of Celent's Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary 3
Introduction 4
  Entering the Modern Policy Administration System Era 4
Building the Business Case 8
  Hard vs. Soft Benefits 8
  Hard Dollar Costs 11
  Hard Dollar Benefits 13
  Putting It All Together 15
  Timing Considerations 17
Vendor Selection Processes 18
  Best Practice Approaches 19
Final Observations 20

 

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