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
Our business goals for new product development required us to be flexible and to develop quickly innovative products that had become market-standard. We were looking for flexibility and innovation, and the ability to replicate and reuse code and calculations between our in-house-developed new-business and illustration systems. We also wanted to build on standards to position us for the future.
In issuing a request for proposal for a policy admin system, it's important to gather input from various disciplines within your company, including IT, actuarial, new business and in-force administration. Factors to consider include usability -- it should be easy to train staff on the new system. Technical fit also is important -- does the system fit well within your corporate technical infrastructure? It was also important for us to look for a vendor that offered an independent model that would allow us to configure our unique business rules.
One of the critical changes we wanted was a consistent release cycle for new products. We struggled to introduce one product per year -- we needed to improve that and be able to quickly launch new products, enhancements and regulatory changes. We are now committed to four product releases (either new products or enhancements) annually.
Denise M. SmiejaManager is manager of Life Manufacturing Systems at Securian Financial Group (St. Paul, Minn.)