Automated policy administration system leads to enhanced customer relationships helping insurers to retain customers for long.
If one goes by the trend legacy systems are passé, policy administration system (PAS) is on a consolidation phase. Votaries of PAS will say, PAS will effectively address issues like cost overruns and productivity. Also, there are inbuilt advantages like integrating distribution networks to enable agents to focus on sales than working with many interfaces. This will in turn increase the sales. Does this mean that switching to PAS is the only answer? This question needs to be addressed holistically.
Today the government is working in conjunction with the insurers for data system integration to make systems more compliant. States are integrating data systems and working with the private sector to facilitate the technology and systems needed for effective information exchange. The underlying intent here is information exchange makes regulatory compliance easier. Markets call for technology up gradation. Poor response time will lead to loss of interest among customers. Insurers have individual as well as group policies. Insurance carriers require a system of recording for them. PAS role is helping in executing processes like rating, issuing, binding, quoting, endorsements, and renewals. IT vendors are offering tailored PAS’s to address different policies.
Can IT Vendors Offer Flexible Solutions?
Now the important point to ponder is whether all insurers find switching to modern PAS easier? It has to be borne in mind that insurers need to invest an enormous amount of time and money for switching to modern cloud based systems. In such a scenario, what is the ideal solution without disrupting the daily business?
Today automation holds the key in policy administration system. We have already seen legacy systems are passé. Right from issuing a policy to settlement of claims software application automates the entire policy administration process against handling processes individually. PAS can be termed as the hub of the insurance process from the customer to the back office. Traditional legacy systems are not agile to respond to market and evolving customer preferences. Big data and the requirement to respond quickly needs to be addressed by process automation. PAS comes with modern tools for product management, underwriting, forms management, carrier management, agency management, user management etc. PAS app also handles policy issuance, documentation, risk assessment, tax and regulatory compliance, accounting and settlement, and reconciliation. And all these solutions are available by upgrading the legacy system with automated solutions.
We are entering into an era of automation where key processes are automated:
- Quotes, Rates, Bindings
- Policy Issues and Generations
- Policy Servicing — Endorsements (In sequence/Out of sequence)
- Renewals, Cancellations, Rewrites
- Reinstatements
- Underwriter Workflow Management
Some IT vendors are providing automated solutions by upgrading the legacy systems. This option is for insurers who don’t want to disrupt their daily activity. The insurer who opted for this service wants to avoid total data migration with a view to reduce costs. The same IT vendor also has the capability to offer entire data migration on cloud. Although this is time consuming this is a one time investment. Of course there is flexibility for the insurers to pick the right choice.
Billing system plays a key role in improving insurance process. Effective billing system helps insurance carriers to design payment and collection plans competitively. Automated billing process has the advantage of lower maintenance costs. Besides, it enables insurers to configure the workflows and business rules reducing errors and avoid bad transactions.
In sum, automated policy administration system, be it an upgrade of legacy system as saas or switching to cloud based solution, insurers are at an advantage of staying in line with the markets.
