4 Ways Insurers Are Taking the Risk Out of Policy Admin Replacement
Complementing the Package
Risk Mitigation Strategy: Complementary vendor solutions, process reengineering.
It's a mistake to think that a new policy administration system will bring with it all the functionality an insurer needs, notes Robin Joshua (at right), director, corporate underwriting and risk management at Canadian Automobile Association South Central Ontario (CAA, Thornhill, Ontario; CA$160 million in annual premium). Joshua has brought in Toronto-based iter8 to provide statistical reporting capabilities to complement the capabilities of the insurer's new policy administration system.
CAA decided about a year-and-a-half ago to select Guidewire's PolicyCenter to replace a legacy system to increase the insurer's ability to efficiently offer more products and services across a wider business footprint, according to Joshua. On the strength of industry experience with the vendor's PolicyCenter and ClaimCenter systems, CAA has also selected Guidewire's BillingCenter.
"I brought in iter8 because we have to report to the Insurance Bureau of Canada and the ability to do that was not built into Guidewire," Joshua says.
Some functional limitations are to be expected of any core system, Joshua asserts. "I've never seen a system that has everything," he says.
"There's a belief that legacy systems that have been around a long time have everything, but that's not true either," Joshua continues, adding, "There will always be something you need to address in another fashion."
Another critical mistake that CAA will avoid during its modernization initiative is to try to impose existing business processes on new technology, which Joshua says is bad for two reasons: It shoehorns the technology for things it wasn't designed for and squanders the opportunity to re-engineer more efficient, precise and customer-centric processes. "We're working to see how we can take best advantage of the technology," Joshua adds.