Policy administration system replacement is one of the most ambitious -- and risky -- projects that an insurer can pursue. But even before the daunting systems replacement effort, IT and line-of-business executives have to develop a business and financial plan for the project and get buy-in for the effort at the highest levels of the company. How can insurers build an effective business case for modernization what should carriers include in a request for proposal and, ultimately, how can they measure the success of a policy admin system implementation? --Peggy Bresnick Kendler
CEM Insurance Co. is a P&C program insurer with less than $10 million in premium. Our processes were completely manual before we implemented our new policy administration system. We saw that our lack of a system was a barrier to entry in some markets, and we wanted to expand our lines of business into additional states where we were already admitted. However, we found that agents weren't interested in working with our company unless we made it easier to do business with us.
We approached other companies that had recently gone through the policy admin transformation process and could offer suggestions on the various options available. We quickly discovered that many available systems were complicated and used interfaces between claims, policy administration, underwriting and other systems. Rather, we were looking for a more comprehensive suite of products that could be handled in one system. Our decision was based on timeframe and cost. We finally selected a solution from ISCS (San Jose, Calif.) because the company has insurance knowledge in-house, the solution can be hosted and it includes all the components we wanted.
Our system has been operational since April 2010. Although it runs extremely efficiently, we haven't yet seen the total cost savings because we're still growing our book of business. We have, however, realized tremendous time savings. Month-end reporting and generating data for regulatory compliance, for instance, used to be extremely time consuming, and all of our underwriting was done by hand. Today, we can handle renewals in minutes.
Before, our agents had to create a paper file. Now everything works with a click of a button. The new system has allowed us to go paperless, and we can access our system at any time, from anywhere. The system has freed up at least five to six days of my own time each month, which enables me to focus on other revenue-generating tasks. The system optimizes everything we do at CEM. We are aiming to drastically increase our premium without adding additional resources.
Christopher DuCharme is Director of Program Operations for CEM Insurance Co. (Deer Park, Ill.)