Perhaps no portion of the insurance enterprise today receives as much attention as policy administration. By some estimates, there are as many as 40 policy administration software vendors in the insurance space, and there seems to be plenty of work for everyone.

With so many policy administration products and choices on the market, however, which product features are most and least appealing to CIOs and other IT executives who must oversee the use of these systems? In addition, what would they wish for in a policy administration system if they could rub the proverbial magic lamp?

“I see one of two camps of product lines available in the marketplace,” says Bill Jenkins, CIO and vice president of information technology at Penn National Insurance. “We did an analysis of 100 policy administration systems providers last year. The first camp is older technology with robust functionality, and the second is newer technology with immature functionality. Any way you cut it, though, it’s going to cost you money.”

Jenkins notes policy administration programs for older systems already have been written on the mainframe platform and are still being marketed. Meanwhile, newer, Web-based products have been written on client-server and open systems. “They’re component based so you can plug and play, but they’re not mature as it relates to functionality,” he explains. Some newer systems, he adds, may not be able to handle all lines of business in all states. There also may be problems with different rating criteria and out-of-sequence endorsements. “They’re not full-blown systems at this point,” he remarks.

“But there is a third choice, and that is to go it alone and build your own system,” says Jenkins. “That’s been my druthers for the last 15 years. I rather would have control over my own destiny than leave it to someone else. Our principle is to reuse before we buy, and buy before we build,” he continues. “If there is a product that meets your requirements and you can plug and play, you would be better off to do that. It’s cheaper in the long run.

“Despite that policy, we have decided, based on nothing currently available we need, that we will build our own system. I went through the same wars 15 years ago with General Accident Insurance and reached the same conclusion,” he says.

“We’ve done a blended approach that involves mature components tied together with SOA,” Jenkins explains. The blend includes a rules engine from Pegasystems for upfront underwriting automation as well as a best-of-breed rating engine (Skywire Software’s InsBridge).