North American New Business and Underwriting Systems

Life, Health, and Annuity ABCD Vendor View
by Karen Monks, December 19, 2012
North America

Abstract

Recent economic conditions have had an adverse impact on life insurance application volumes, but there continues to be interest in automating new business and underwriting functions, as insurers strive for straight-through processing (STP) of new business.

Insurers hope that systems that automate new business and underwriting functions will help reduce unit costs and improve margins. Celent believes that these initiatives are necessary to help insurers address growth, service, and distribution mandates, and allow for cost per policy issued reductions.

In the report, North American New Business and Underwriting Systems: Life, Health and Annuity ABCD Vendor View, Celent reviews new business and automated underwriting systems available to insurers in North America. The report profiles 15 automated new business and underwriting systems for life and annuities products with six full vendor profiles, four limited vendor profiles, and five reinsurance solutions.

Today’s new business and underwriting systems collect structured data, triage risk and identify underwriting requirements, fulfill back office processes, and allow for analysis of the resulting data. They provide the potential for insurers to reduce costs by moving some of the traditional back office processes into the front office and to improve profitability by giving insurers insights into the characteristics of applicants for product and pricing refinement.

“In the current sales climate, insurers are looking for ways to improve unit costs. They are achieving results by changing their cost structures and delivery speed through process simplification and automation,” says Karen Monks, Analyst with Celent’s Insurance Group and author of the report. “By implementing an automated new business and underwriting system, insurers are able to reduce costs associated with new business acquisitions. Over time, new business acquisition costs and underwriting time can be lowered. These systems can help free up underwriters’ time to concentrate on more complex cases.”

The report discusses each system’s functionality and highlights trends in the new business and automated underwriting marketplace. Celent analyzes six system providers using its ABCD analysis framework to present a comparative view of the vendor marketplace that visually represents four elements: Advanced technology and technical flexibility, Breadth of functionality, Customer base, and Depth of client services and solutions. Additional information is provided for emerging solutions and reinsurer solutions. System providers included in this report are: Accenture, CSC, Ebix, Reinsurance Group of America (RGA), Resonant Technologies, StoneRiver, FAST Systems, MajescoMastek, STEP Solutions, Tata Consultancy Systems (TCS), Hannover Re, Munich Re, SCOR, and Swiss Re.

This is the second of several reports related to straight-through processing in life insurance. The first in the series was Understanding the Benefits of Electronic Applications and Policy Issue, November 2012.

This 132-page report contains 10 figures and 77 tables.

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 part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Tylor Tourville
ttourville@celent.com
Tel.: +1 617 424 3284

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

1

Introduction

3

Report Methodology

5

New Business and Automated Underwriting: Definition and Functionality

7

Trends in New Business and Underwriting

10

Celent’s ABCD Vendor View

12

Full Profiles

16

Accenture: Accenture Life Insurance Platform (ALIP): Electronic Applications and Underwriting

17

CSC: nbAccelerator

25

Ebix (formerly PlanetSoft): The Policy Processor (TPP)

34

RGA: AURA

42

Resonant Software inc.: Integrated Life Underwriting Solutions

50

StoneRiver: LifeSuite

58

Limited Profiles

66

FAST Technology: FAST Insurance Components

67

MajescoMastek: nb+U

73

STEP Solutions: STEP New Business

79

Tata Consultancy Services: TCS BaNCS

86

Reinsurance Solutions Profiles

92

Hannover Re; Life Reinsurance Company of America: Merica-US

93

Munich Re Automated Solutions: Allfinanz Interview Server

100

SCOR Global Life Americas: Velogica

107

Swiss Re: Magnum

112

Swiss Re: plasma

119

Concluding Thoughts

125

Leveraging Celent’s Expertise

127

Related Celent Research

128

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