Pricing of Policy Administration Systems in Europe

by Catherine Stagg-Macey,  Nicolas Michellod, December 31, 2008

Abstract

Zurich, Switzerland 31 December 2008

Insurers looking to compare the functionality and technology provided by various policy administration system vendors can usually gather sufficient information from the vendors themselves, or through intermediaries. However, pricing for these systems is an area that lacks transparency.

In a new report, Pricing of Policy Administration Systems in Europe, Celent discusses four key points that should be addressed by IT vendors and insurers when negotiating replacing a policy administration system: licensing, maintenance, implementation and customisation, and total cost of ownership.

"Offering offshore capabilities does not necessarily mean that rates charged for implementation staff are lower in comparison to the overall market," notes Catherine Stagg-Macey, senior analyst with Celent’s insurance group and co-author of the report.

"There is no one-size-fits all strategy for policy administration system pricing. The key word that most vendors and their potential clients focus on when discussing licensing and project pricing is ‘flexibility,’" adds Nicolas Michellod, senior analyst with Celent’s insurance group and co-author of the report.

This reports provides information about IT vendors’ licensing pricing model preferences, the average annual maintenance fee applied around Europe, and variations in terms of implementation costs, with specific coverage of offshore capabilities offered by certain IT vendors and figures about the first year and proceeding years’ total cost of ownership. In addition, Celent reviews issues surrounding pricing for insurers and summarizes findings linking categories and perceived functionality of PAS on the market. Finally, Celent provides some predictions about price trends in Western and Eastern Europe.

The 24-page report contains 12 figures and four tables. A table of contents is available online.

of Celent's Property/Casualty Insurance and Life/Health 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

Zurich, Switzerland 31 December 2008

Executive Summary 3
Introduction 4
Core Product Licensing 6
Maintenance 9
Implementation and Customization 12
Total Cost of Ownership 14
Key Consideration Summary 19

 

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