Over the past few years, more vendor solutions have come online that can help small and medium carriers do more or at least not be at a competitive disadvantage,” says Paul McDonnell, senior vice president and managing director of BearingPoint’s insurance practice.
As both a cause and consequence, the interest of property/casualty insurers in replacing or rehabbing policy administration technology continues unabated. In a recent Gartner survey, policy administration still was ranked as the top business priority, reports Kimberly Harris-Ferrante, research vice president at Gartner.
She adds, however, things have been a bit different on the life/annuity side. “We’ve seen interest in policy administration take a bit of a dive because it’s difficult to cost-justify a conversion for a new policy administration system. Therefore, there has been a shift from administration replacement to the desire to improve the existing end-to-end IT platform—leveraging ACORD standards, Web services, SOA, and other tools and technology to get more out of legacy systems,” she observes.
What also has changed in both sectors is carriers’ views of what administration technology is supposed to do. “As priorities shift in the industry, insurers are realizing while policy administration systems are important, investments in customer service, call centers, and product development technologies provide more competitive advantage and support differentiation than simply having a new policy system,” Harris-Ferrante says.
This also is seen in the shift from building a sales culture to improving customer service. “In previous years, we saw a lot of focus on straight-through processing in life and sales force automation in P&C,” Harris-Ferrante explains. “We’re seeing a huge shift in 2008 toward making sure your administration platform will deliver fast, quality service and support self-service and cross-channel linkage that will drive customer satisfaction and retention.”
The increasing emphasis on customers is one that North Carolina Farm Bureau (NCFB) confirms. “Five years ago, our initiatives were focused on delivering solutions to our agents, not for our customers to have self-service options,” indicates Linda Squires, senior executive of NCFB’s operations and information systems. Today, NCFB has rolled out several self-service features to its customer portal and plans additional ways to let customers take charge of policy changes.
This shift favors smaller companies. “Midsize companies tend to understand naturally the value of relationships. They also have an easier time gaining collaboration and corporate agreement on strategy and the process changes and technology needed to support it,” Harris-Ferrante says.