From legacy to longevity: Modernizing policy administration
About the Author
MKym Gully provides the technology direction for the Accenture Life Insurance & Annuity Platform and also drives our Digital Innovations business. Kym has more than 20 years’ experience within the financial industry covering all areas of the software development lifecycle.
Kym Gully, Technology Lead for Accenture Life and Annuity Software
ost life insurance companies have spent decades and millions of dollars maintaining their aging policy administration systems. But their work has been only partly successful. Although it might be acceptable to maintain a closed block of business on a legacy system, new business should be processed on a platform that supports today’s breed of customers and products, and that provides the adaptability needed to keep up with the blistering pace of 21st century commerce.
Companies need to modernize their policy administration systems, but they can’t do so using costly, “big bang,” multi-year implementations. Instead, insurers should be looking for componentized, flexible integration points with out-of-the-box adaptability and a modular architecture.
Today’s technology is fast-moving and there are key aspects of a modern policy administration system that a CIO or CEO needs to consider to keep pace with a market that is continuously redefining itself for a digital world.
Success factors for modernization
CIOs have several goals in mind when it comes to modernization: eliminate business and IT silos; reduce complexity; and deliver a world-class customer experience. They need to move the business forward which also requires successful integration with an expanding ecosystem of business partners and customers.
Based on our experience, we see four success factors that are especially important when it comes to policy administration modernization:
1. Flexibility through a “mobile first” strategy. Companies cannot afford an approach that pursues different solutions for desktops, tablets and phones. Traditionally, companies built systems for a desktop and then only later considered mobile requirements. Today, the goal is “build once, use many times.” Off-the-shelf GUI infrastructures make it easier to create systems that can be displayed on multiple devices.
2. Smart applications. Embedding intelligence into applications is now critical—automated applications that offer straight-through processing and are driven by analytics and self-governance. The focus should be on extending data availability both internally and externally, leveraging analytic extensions to use data that supports the business and more effectively engages the consumer. 3. Strategic alliances. In a fast-moving and complex marketplace, it’s no longer possible to be a specialist in everything. Alliances are essential. To defend and grow market position and support multiple distribution channels, new dimensions of application connectivity are essential. It’s important to open up and interface with business partner and customer ecosystems.
4. A world-class customer experience. Delivering a compelling and satisfying customer experience is a crucial differentiator as carriers consider policy administration systems. The focus needs to be on helping carriers build integrated solutions that create personalized, multi-channel customer experiences at a reduced cost. This is especially important when providing for the rapidly growing expectations of the end-consumer in the digital world.
...new business should be processed on a platform that supports today’s breed of customers and products, and that provides the adaptability needed to keep up with the blistering pace of 21st century commerce.
Companies can take optimal advantage of these trends by pursuing innovations in several areas.
• Leading infrastructure: Effective infrastructure must be real-time, costcompetitive and available 24/7, with the scalability needed to handle the peaks and valleys of business activity. Strong security is essential for Web access. Also, to reduce total cost of ownership cloud is an option few companies can ignore. Pay for what you physically use is the way forward.
• Best-of-breed applications: Using modern technologies, applications need to be tiered, layered and flexible, as well as agnostic to the ecosystem so they can perform in any environment. By taking advantage of the open source world, carriers can improve their return on investment.
• Innovation-focused leadership: Effective technology and business leaders understand market direction, and they anticipate and meet the expectations of next-generation consumers. Successes found in other parts of the world can and should be adopted.
• Supporting the business: Leaders are pursuing predictive analytics solutions for ongoing business support. They are continually looking to refine products and expand sales opportunities. At the same time, they seek to improve cost structures through operational improvements.
Building for the future
When deciding on concrete steps to develop a flexible, world-class policy administration system, an important message for CIOs is to think both in the short and the long terms. Don’t try to do everything at once.
Begin with the core capabilities, built in the cloud, and then look at other components and their dependencies. For example, infrastructure supports integration, which then provides the basis for mobility, which in turn provides the distribution channels for the external user interface. Mobility and integration support analytics, innovation is driven by integration, and all facets are connected to the core platform and controlled by the infrastructure.
The ability to configure a new product in one week does not help the time to market if the rest of the ecosystem requires six months to build out support for downstream systems. It can’t all be done on day one, so a long-term technology roadmap and integration strategy is required.
Think of it like solving a jigsaw puzzle. You begin with the corners and edges and then work to solve the rest of the puzzle. CIOs need to think of getting the basics in place, and then ensure that ongoing innovations are developed in sync with other parts of the puzzle. It’s a way to make maximum progress with a minimum of resources and spending, while getting the best results over a multi-year period.