Insurance policy administration systems are the principal driver of many operational decisions and new business processes; they are designed to manage policies through their entire lifecycle.
Unfortunately, many legacy policy administration systems suppress an insurance carrier's ability for both operational efficiency and its digital transformation goals. The complex and outdated legacy technology architecture requires increasing IT maintenance budgets to keep systems working.
As the insurance industry continues to undergo digital transformation, it will be increasingly difficult to be competitive without modernized insurance policy administration software solutions that provide the necessary capabilities to address changes in the market.
Insurance agencies can't afford to rely on hardwired and rigid systems that are incapable of quickly responding to changes in regulation, risk management, market forces, or customer needs.
What is an Insurance Policy Administration System?
A policy administration system is a software solution that helps manage the entire policy lifecycle by running various insurance functions and operations including rating, quoting, and policy issuance and renewal. These tools also help insurance agents with actuarial calculation and underwriting while offering access to policy data.
These advanced systems also empower users with self-service capabilities, enabling accurate data entry and retrieval, ultimately contributing to increased customer satisfaction.
Typically, policy administration systems are rigid and difficult to customize all-or-nothing types of solutions.
Many insurance policy administration systems integrate with third-party systems to enhance the following capabilities:
- Product Management: They maintain a comprehensive product catalog and facilitate the development of insurance policies.
- Billing and Accounting Calculation: This includes claims and reimbursement processing, commissions, and agent licensing.
- Underwriting Automation and Premium Calculation: Capabilities also involve managing eligibility criteria and client ratings.
The difficulty insurers run into is when critical business processing is hardwired into policy administration systems and requires time and resources to be managed and updated.
Transforming Policy Administration Systems with Business Rules
Even though the insurance industry continues to suffer from legacy technology bottlenecks and underinvestment, many insurance companies are taking steps toward renewing their aging legacy systems.
A recent survey showed that 80% of participating insurers have already or are planning to carry out at least one policy administration system transformation.
Efficient product development capabilities rest on powerful business rules engines that optimize policy administration systems.
The modernized insurance policy admin system not only enables carriers to develop customized insurance products based on their own data but also offers automation capabilities that reduce time to market.
Modernize Insurance Policy Administration Systems
Insurance providers use rules-based applications to optimize the overall policy administration process and improve offerings to meet business requirements.
Hyperon is a business rules engine to which a legacy policy administration system is connected in order to optimize critical processes such as underwriting, product development and configuration, and claims management.
For instance, when insurers need to make changes to their premium calculation models, they do so in Hyperon without having to touch the code base. Also, carriers can extract underwriting rules to update and automate them. So, for example, Hyperon users can outline under which conditions a premium should be increased and by how much.
What’s more, some applications can be underwritten entirely by rules-based software, without any human intervention.
As a result, business users without any technical expertise are able to develop custom models that give them an advantage in the market without waiting weeks or months for the IT department to implement the changes. These are some of the key features of business rules engines.
Benefits of Insurance Policy Administration System Improvements
Insurance providers can achieve accelerated growth by modernizing their policy administration systems with business rules engines:
- Client Satisfaction: Deliver personalized insurance products that offer a differentiated customer experience.
- Product Innovation: A modernized policy administration system gives business users the ability to develop new and innovative insurance products necessary to meet the ever-changing market demands.
- Automation: Flexible business rules empower insurers to update and automate underwriting processes on the fly to accelerate quoting and policy issuance.
Rules-powered policy administration systems enable insurers to carry out rapid product development, streamline policy management, reduce time to market, minimize overall costs, and build customized tariff calculation models that achieve specific business goals.
Insurance Policy Administration Platform Transformation: Future Proof Your Carrier
One of the main drivers of success in the casualty insurance space is the ability to make immediate changes.
All of the many systems and processes make replacing an existing policy administration system a huge and costly undertaking.
However, every insurance company can immediately benefit by extracting a part of their legacy system to a business rules engine and reap the rewards of the Pareto Principle: make a 20% change and enjoy 80% of the benefits.
A well-designed risk management information system is vital for insurers looking to proactively identify and mitigate potential risks. By leveraging business rules engines, an insurance company gains a competitive advantage by automating complex decision-making processes, reducing errors, and improving overall operational efficiency.
Hyperon can improve your policy administration software by optimizing mission-critical processes, from quoting and underwriting to renewal, and claims management.
Hyperon makes it easy for business users to manage and update applications and processes, without having to rely on manual programming or support from the IT department. With our business rules engine, the power to thrive in changing market conditions is always at your disposal.
Get in touch with one of our experts to see how you can innovate without replacing your old legacy system.