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A springboard for improvement EY global policy administration survey reveals a strong business case for transformation

Executive summary

Introduction

Survey overview

Section 1 The business case for policy administration transformation is stronger now than ever

Section 2The importance of proper planning and aggressively managing scope

Section 3Policy administration transformation is the first step in an ongoing cycle of digital modernization

Conclusion

Contacts

01

02

04

06

12

18

22

24

Contents

EY global policy administration survey | 1

Competition has always been the driving force behind industry change. Recently, the pace of required change has quickened as companies find new means of gaining competitive advantage. These efforts have come through cost-cutting measures, improved operational efficiencies and new innovative products — to name a few. Companies that have ignored these efforts in the past were quickly forced out of the market, while those that pushed competitive initiatives became leaders. This applies in the insurance industry as it does in any other. Continuous improvement ensures sustainability and often provides better solutions for customers.

In recent years, insurance companies have been transforming core business applications such as policy administration, billing and claims to reach the next level of competitiveness. They are leveraging these transformations to springboard new initiatives and enable new capabilities. To gain a better understanding of the current policy administration landscape, EY teamed up with Gartner to survey business and information technology (IT) executives of property and casualty insurance carriers around the globe.

We focused on these major assertions and backed the themes with survey findings, data and industry knowledge:

ff The business case for a policy administration transformation is stronger now than ever.

ff Proper planning and scope management is crucial to a successful implementation.

ff Policy administration transformation is the first step in an ongoing cycle of digital modernization.

Most carriers have made progress in transforming policy administration. Yet many have concerns about critical success factors such as complexity, cost, scope management and executive commitment. While survey findings reveal that satisfaction is high among those who have completed a transformation, there are many untapped opportunities for future technology and service improvements. Increased efficiency, speed to market and enhanced customer engagement are only a few of the realized benefits.

Executive summary

Laura C. FordEY Principal — Insurance Advisory Services

2 | A springboard for improvement

EY’s 2016 US Property-Casualty Insurance Outlook provides a vision of what to expect in the near future:

“Digital technologies, such as social media, analytics and telematics, will continue to transform the market landscape, recalibrating customer expectations and opening new ways to reach and acquire clients.”

Introduction


One of the major focus areas for insurance carriers has been upgrading their technological platforms. Carriers have always been reliant on their core systems (policy administration, claims and billing); however, there has been a reluctance to replace these systems in their entirety even as they became obsolete because of the cost and complexity. The tendency has been to disguise legacy system limitations to end users by building new front-end interfaces or, if necessary, manual intervention. But these solutions have become costly to maintain and have failed to resolve the underlying issue.

As the marketplace moves toward digital technology, the need for faster and less expensive solutions is elevating the role of core systems into front office interactions. This is driving carriers across the industry to replace these systems to realize competitive benefits from a state-of-the-art technical solution.

Policy administration transformation has been and continues to be high on the agenda for carriers. They are finding that the business case for this transformation is stronger now because there are more off-the-shelf software solutions available in the marketplace.

Carriers who have completed or are in the middle of the transformation all highlight scope management, because of system and enterprise complexity, as a major issue during the transformation. This calls for careful oversight throughout the project. Once complete, these systems are being used to strengthen the supporting operations and technology to enhance the overall digital customer experience. Policy administration system replacement is becoming “the norm” for carriers, so they must evaluate additional initiatives to maintain or strengthen competitive position.

Survey overview


EY collaborated with Gartner to survey 202 property and casualty insurance companies to better understand the current policy administration transformation landscape. Respondents were asked 31 questions to provide details of their experiences in three phases: planning, transformation and post-transformation.

Of the respondents, 59% were from North America, 33% from the United Kingdom and Europe, and 8% from Australia and Asia-Pacific (see Figure 1). Latin America was not included in this survey.

The direct written premium (DWP) for each carrier respondent, for the most part, was evenly spread in each geographic area. The only discrepancy was that European Union (EU) carriers skewed to either smaller size (less than US$1b in DWP) or larger (more than US$1b in DWP). Overall, the split between job function was fairly even: 109 respondents hold IT roles, while 93 hold business roles. It is worth noting that respondents from carriers with lower DWP were more likely (85%) to hold business roles (versus IT).

The survey results provide valuable information about the current state of the marketplace, common occurrences during a transformation, and insight to carriers’ overall impressions of the process and, in certain cases, the outcome of the transformation. United States Canada Other

United Kingdom Australia

50%

28%

9%

7%

6%

Overview of respondents by location of headquarters

Figure 1: Headquarters


Survey overview

$$

$

17% Less than US$500m

20% More than US$5b

63% US$501m–US$5b

54% IT roles

46% Business roles

Overview of respondents by location of headquarters

Figure 1: Headquarters

Overview of DWPFigure 2: DWP

Overview of primary work rolesFigure 3: Job roles


There is significant market activity around policy administration. Of the respondents, 93% have started a policy administration transformation and 51% of those have completed their transformation (see Figure 4). The responses show that US carriers have the most transformations in progress (50%), while in all other regions the majority of respondents have completed their transformation.

Commercial line carriers responded with the most policy administration transformations in the planning phase and in process, while in comparison, personal line carriers showed more completed transformations. When comparing these overall market numbers with similar 2012 research (by Gartner), 77% of carriers were in the process, and only 9% said their transformation was complete — showing a dramatic shift in these numbers in only a few years.

In this highly competitive insurance market, carriers have considered numerous ways to increase efficiencies, reduce cost, bring innovative solutions to their customers and improve employee productivity. A policy administration transformation is becoming a key initial step for a carrier to begin implementing these initiatives. Though the effort may be daunting, the business case for transformation is stronger now than ever as the focus on digital capabilities increases. Carriers can no longer sit idly with legacy systems and expect to compete.

The business case for policy administration transformation is stronger now than ever01

Current transformation status

Completed

Planning

In process

42%38% 13%

Completed and retired

7%

Percent of total number of records

Half of the respondents completed their policy transformation initiatives

Figure 4: What is the status of your company’s policy administration transformation efforts?


The business case for policy administration transformation is stronger now than ever

Main concerns or inhibitors to policy transformation initiatives are cost and complexity

Figure 5: What are the top five main concerns or inhibitors considered during the evaluation of policy administration transformation initiatives?

Cost and complexity top concernsEven with strong activity, there are still major concerns around a transformation. In our survey, we took a closer look at what factors are considered in the initial phases. We found that the top concerns for undertaking such an effort — cost, complexity and the time to completion (see Figure 5) — were consistent across personal, commercial and specialty lines.

Complexity ranked ahead of cost in the EU, while both Canada and Asia-Pacific ranked time to completion as too long as second. These concerns highlight the key factors that carriers perceive as barriers to entry for a transformation.

Responses were similar for those with business and IT roles. However, we found that respondents associating themselves to the business side were more concerned with the complexity of current systems, while those associated with IT were most concerned with cost. If these concerns are consistent for carriers and their expectations, then what is driving activity in the transformation space?

Cost

Complexity of current system

Time to completion too long

Organizational lack of funds

Lack of IT skills

Other projects higher priority

No need for improvements

No solution fits needs

Lack of business case

Other

Grand total

Mai

n co

ncer

n

5

23%

19%

10%

14%

Concern — inhibitor rank

31% 20%

1 2 3 4

26% 25% 15%

16% 13% 19% 12%

6% 13% 5%

7%

18% 15%

7%

7%

6% 7%

9% 9%

9%

6% 9%

11% 11%

10%

10% 11%

12%

12% 13%

4%

2%

4%

2% 4%

2% 3%

2% 2%

3% 1% 2% 1% 0%

100% 100% 100% 100% 100%


Key drivers of transformationDespite the prevalent concerns surrounding a transformation, carriers are still finding the potential benefits attractive enough to pursue the effort. To better understand the impact of their decisions, respondents were asked to list the key drivers for their own policy administration transformation (see Figure 6). They overwhelmingly stated that the main driver was an increase in efficiency, with time to market for new products and improved customer engagement ranking closely at two and three. These drivers were found to be consistent across lines of business (personal, commercial and specialty), respondent role (business versus IT) and, for the most part, geographies (the main difference was that customer engagement ranked second in both EU and Asia-Pacific).

Third-party software solutions are now a viable solution as illustrated by respondents providing the lowest ranking for both “no solution fits needs” and “lack of business case.” Carriers are taking these solutions and building business cases that call out drivers for a transformation to assist in solving many problems they currently face.

Main driver for transformation is increased efficiency

Figure 6: What are the top five main drivers for the implementation of policy administration?

Mai

n dr

iver

Increased efficiency

Time to market

Improved customer engagement

Deficiencies in current system

Acquisition activity

Other

Grand total

Driver rank

43% 25%

19% 26% 28%

17% 25% 25% 20%

14% 13% 12%

4%

3% 1%

7%

11%

33% 26%

2%

14% 11%

18%

19% 18%

9%

10%

1%

45%

1 2 3 4 5

0%

100% 100% 100% 100% 100%

The business case for policy administration transformation is stronger now than ever01

“As third-party software solutions continue to mature, carriers are presented with viable solutions that will help them control the cost complexity of a transformation while meeting their business needs.”

Laura C. Ford EY Principal — Insurance Advisory Services



It is important to note that even with the amount of activity in the transformation space, respondents have stated that these transformations are not driven by acquisition activity. The primary goal is to strengthen the organization. These drivers will be part of the information carriers can use to build a strong foundation for a business case to transform their policy administration system.

Both personal and small commercial lines insurers seek to improve efficiency and time to market by standardizing their transaction processing and driving more automation to lower the overall cost. These differing needs have enabled personal carriers to enter the market first with common solutions that meet their needs, while more complex commercial carriers were required to wait for solutions to adapt to their more demanding needs and requirements. Mid- to large-sized commercial and specialty line carriers will look to improve their time to market and efficiency by rapidly deploying new and specialized products.

In a marketplace with commoditizing products and consistent improvements in operational efficiencies, these drivers demonstrate the strong business case for a policy administration transformation. Carriers must focus their initiatives on improving their speed to market to drive differentiation and lower the overall cost in delivering their products to customers.

“It makes sense that there is a slight variation by segment in terms of drivers. It is our experience that while the drivers are the same across market segments, the underlying implementations are different. Small commercial and personal lines carriers focus on improving efficiency and time to market by standardizing transaction processing and driving automation to lower the overall cost. Mid- to large-sized commercial and specialty line carriers focus on improving time to market and efficiency by rapidly deploying new and specialized products.”

Gail E. McGiffin EY Principal — Insurance Advisory Services


The business case for policy administration transformation is stronger now than ever01Most important expected outcome from policy transformation that companies plan to track is time to market with new products, followed by faster policy issuance

Figure 7: What are the top five most important expected outcomes that your company planned to track resulting from policy transformation?

Expected outcomes align with driversThe survey explored how carriers perceive the expected outcomes along with the actual realized outcomes to determine if a transformation is delivering on those drivers. Carrier responses for expected outcomes align with the drivers behind the transformation stated above. The top expected outcomes were shown to be similar by line of business, except that specialty carriers ranked improved external customer satisfaction as slightly higher. It is important to note that reduced IT maintenance was ranked the lowest (see Figure 7). This ranking suggests a shift from carriers viewing a transformation as a long-term cost saver to more of an enabler.

Those carriers that completed their transformation (101 respondents) reported the number one realized outcome from a transformation as an increase in operational efficiency, followed by speed to market with new products (see Figure 8). Relating the outcomes back to the drivers outlined in the business case shows that business case outcomes are being realized. These outcomes also tie directly back to ways carriers can leverage newly implemented policy administration systems for future initiatives.

The survey shows that the majority of carriers are actively involved in a transformation. They are using third-party solutions to address common concerns and realizing outcomes that align to the drivers that they have identified. Carriers not actively involved in a transformation might soon find it difficult to compete, as a transformed policy administration system is quickly becoming a neccesity for any carrier in the marketplace. Carriers which have completed their transformation will continue to add new capabilities to their new policy administration foundation. A strong business case, however, is only the beginning. Carriers must successfully manage the implementation to fully realize these benefits.

Expected outcome

Time to market — new product

Faster policy issuance

Increased processing — full-time equivalent

Eliminate process inefficiencies

Faster current product changes

Improved external customer satisfaction

Informed and consistent process

Improved loss ratio

Improved internal customer satisfaction

Increased straight-through-processing

Increased premium — account

Increased policies-in-force count

Reduced IT maintenance

Grand total

5

Expected outcome rank

19%

1 2 3 4

9%

6%

6%

6%

7%

7% 10%

6% 8%

4% 5%

4%

2%

2%

3%

4%

10%

7%

10%

9%

10%

17% 12% 5%

12% 9% 4% 5%

7% 6%

8%

15% 11%

6%

3%

7% 12%

8%

8%

5% 6%

7% 6%

6%

6% 11%

14%

5% 7%

4%

5%

15%

6%

9%

4%

10%

11%

7%

2%

7%

14%

13%

1%

3%

100% 100% 100% 100% 100%

12

3

6

9

Global Policy Admin Survey | 11


Increased operational effiency is realized outcome for those who completed transformation

Figure 8: Which of the following were the top five most important outcomes realized with the policy transformation?

Increase operational efficiency

Speed to market

Improved customer engagement

No reliance on old systems

Smooth acquisition

Grand total

5

Realized outcome rank

48% 16%

1 2 3 4

20% 21%

18% 25% 11%

10% 16% 21%

4%

7%

16%

22%

13% 16%

15%

14% 34%

33%

31%

32%

36%

10%

9%

100% 100% 100% 100% 100%

Outcome

“In our experience, the best transformations have a well-thought-out business case that links capabilities directly to business outcomes. This becomes a tool to focus and manage the key scope decisions throughout the course of the implementation.”

Lars C. Tandrup EY Principal — Insurance Advisory Services


12 | A spring board for improvement

Scope management is a critical success factorThe planning phase is crucial to any implementation, and the size and complexity of a policy transformation is significant because it serves as the system of record and integrates with many other functions throughout the organization. If a policy transformation is planned incorrectly, carriers must deal with staffing concerns, improper future state requirements, and other potential issues.

These issues are likely to lead to scope increases which frequently constrain the budget and push timelines, causing carriers to place a priority on scope management. These increases can be functional or arise from underestimating the effort or cost to complete the work. Survey respondents that were in the process of or completed their transformation experienced many examples of these scope increases during their transformation (see Figure 10).

In observing the occurrences for scope increase, respondents cited four functional activities, including the three most frequent overall occurrences identified by respondents in the survey: increased customization, internal user needs and adding third-party data (added external user needs ranked sixth). This was consistent across all lines of business.

The policy administration transformation effort includes many phases that present the carrier with unique challenges. Survey respondents were asked which phase was the most challenging: planning resulted in the most issues, while post transformation was cited as the least (see Figure 9).

The importance of proper planning and aggressively managing scope02

“Five to seven years ago, it was not uncommon for policy administration transformations to be delayed more than a year due to changes in both functional and technical scope.”

Thom Cranley EY Principal — Insurance Advisory Services

Solution implementation planning is the biggest challenge in the transformation process

Figure 9: Which phase of the transformation posed the biggest challenge for your company?

2016

2%

17%

5%

23%

Assessment

Implementation

Planning

Post

None

Selection

26%

27%



The importance of proper planning and aggressively managing scope

Carriers with a DWP less than US$100m reported an increase in staffing as the most common occurrence (adaption to scope) and increased customization as the least. The other occurrences reported by respondents can be attributed to underestimating the effort and/or cost of the transformation. In our experience, both functional and underestimation occurrences are often linked to planning, in that a poorly executed planning phase in a transformation can directly impact a carriers’ ability to properly scope their effort and estimate cost.

Overall, 84% of respondents reported that scope changes to technology or third-party data requirements resulted in delays in their timeline. The largest group (44%) indicated a three to six month delay. These delays add extra cost to the transformation. And, cost was the leading reason for pausing transformation efforts: 30% of respondents said their transformation was paused or abandoned because it was deemed too expensive. While these delays are not ideal for any transformation, three to six month delays are better than delays of more than six months from previous years.

Carriers are currently leveraging two tools to help manage scope and successfully deliver the system implementation on time: strong program governance and system integrator involvement.

Most carriers experience a increase in scope during the transformation

Figure 10: Which of the following occurred during the transformation process?

59%

53%

44%

43%

40%

35%

33%

16%

2%

Represents functional scope increase

Underestimating of effort — cost

None

Decreased customization

Added downstream requirements

Added external user needs

Increased staffing

Added infrastructure requirements

Added internal user needs

Added third-party data

Increased customization


Building a foundation for strong project governanceEffective scope management requires strong project governance, and scope change decisions need to align with the expected benefits of the transformation effort. Survey respondents ranked commitment from executive sponsorship as the second most critical factor in implementation, behind scope management. Executive leadership involvement is essential to success in managing scope and is the foundation for establishing strong project governance. Commitment from executive sponsors not only includes resources and budget, but also time for decision making and steering.

Centralized transformational organizations provide valuable insights learned from other projects and leverage that information to enable successful project delivery. The use of a centralized transformation organization also had a positive impact on carrier satisfaction (see Figure 11). Another benefit is bringing the right people to the table for each and every project decision. Establishing a core decision-making team is crucial in planning the transformation. The team identifies issues and risks during the project (including scope) that need to be escalated to executive sponsors – and appropriately mitigates these as they arise.



System integrators add a valuable experienceOverall, 96% of survey respondents reported using a system integrator at some level during the transformation. When a system integrator was used, the majority of respondents (45% - see Figure 12) used the system integrator in a lead role.


Overview of satisfaction with the transformation process by transformation organization

Figure 11: What was the level of satisfaction with the transformation process?

Breakdown of transformation roles

Figure 12: What role did each of the following have in executing the policy demonstration transformation?

Centralized

Departmentalized

39% 17%

Very satisfied Somewhat satisfied

20% 20%

By transformational organization

Lead

Heavy

Support

None

Grand total

33% 23% 22%

Internal System integrator Tech vendor

58% 45% 42%

7%

2%

27%

4%

34%

2%

100% 100% 100%

Transformation roles and level of involvement


Carriers with a DWP of US$501m to US$5b were most likely to use a systems integrator in the lead role. In contrast, smaller carriers place them primarily in a support role, while the largest carriers involve them heavily in the process (both of these groups opted for internal resources to play the lead role). The levels of involvement by geography were fairly common across all areas. Canada, however, did report higher use of system integrators in the lead role (44%) compared to other regions (20%).

Often, carriers rely on the expertise of system integrators to help with the tough scope decisions, as well as numerous other critical pieces of the transformation process. These carriers are teaming up with system integrators that understand the complex nature of the transformation, size of the effort, and multiple parties involved — and can bring valuable experience to any transformation. Not only do they help draft the overall plan, but they support program governance and provide perspective on tough scope decisions. By applying what they have gathered from other transformations and knowledge of the industry, system integrators add a perspective that carriers are often unable to provide internally at scale.

Carriers that used a system integrator in a lead or heavily involved role within the transformation reported higher levels of satisfaction with the overall process (see Figure 13) than carriers that only used system integrators in supporting roles. The survey findings also show that carriers which teamed with a system integrator reported shorter delays across all respondents, as shown in Figure 14. A shorter delay in project delivery resulted in greater satisfaction levels and a better project outcome.


Satisfaction level by system integrator involvement

Figure 13: What was your company’s level of satisfaction with the transformation process?

Lead

Heavy

Support

Not applicable

None

36% 23%


46% 44%

15% 28%

3% 0%

0% 5%

System integrator involvement


Scope management is still viewed as the most critical factor in delivering a successful implementation. Carriers who are teaming with an experienced system integrator are utilizing their guidance and best practices to actively manage scope. That collaboration is positively influencing carrier satisfaction ratings. With fewer scope increases, project timelines do not need to be extended as or for as long. This benefit, along with a strong program governance and executive sponsorship commitment, can provide carriers with the internal tools to manage scope during a transformation.


Increase in project timelines decrease transformation satisfaction

Figure 14: How was your timeline affected by changes in transformation?

Timeline affected by increase in scope

Less than 3 months

3-6 months

More than 6 months

Satisfaction with process Satisfaction with outcome

69% 71%

Very satisfied Very satisfied

27% 35%

17% 17%

Transformation outcome satisfaction is also higher with system integrator involvementIt is worth noting that the level of system integrator involvement also directly impacted carrier satisfaction levels with the transformation outcome, which corresponds to the satisfaction results for the transformation process. Figure 16 shows that the larger the role of the system integrator, the higher the levels of satisfaction in the outcome of the transformation. This suggests that teaming with a system integrator during the transformation effort can not only provide support and guidance through the process, but also drive better end results.

Satisfaction level by system integrator involvement

Figure 16: What was your company’s level of satisfaction with the transformation outcome?

To better understand the overall results of these transformations, carriers that completed their transformation were asked to report their level of satisfaction with the outcome: 70% were very satisfied and only 2% reported any dissatisfaction (see Figure 14). This further supports earlier findings which showed that carriers are realizing outcomes by delivering on crucial drivers, such as speed to market and increased operational efficiency which were stated in the business case for the transformation.

Carriers directly called out that “customer satisfaction is now much higher than it was previously,” and that the outcome was “far more cost effective in the long run,” when asked to further comment on their rating of “very satisfied.”

Figure 15: Nearly three-quarters of carriers cite very high satisfaction levels

Policy administration transformation is the first step in an ongoing cycle of digital modernization 03

Lead

Heavy

Support

Not applicable

None

36% 11%


43% 48%

16% 37%

3% 0%

1% 4%

System integrator involvement

2%

70%

23%


Somewhat satisfied

Somewhat dissatisfied

Very satisfied


Integration enables the digital agendaEven with these high levels of satisfaction, most carriers are looking at the investment in a policy administration transformation as the first step in advancing their digital agenda. As shown earlier, fewer respondents are building a business case based on reducing IT maintenance. Instead, the focus is on increasing efficiencies, enhancing the carriers’ ability to offer new products to their customers, and improving the user experience.

Respondents report significant integration with other systems including claims, billing and underwriting — all of these integration points align to these focus areas (see Figure 17). However not all integrations showed consistency across company size. Underwriter Desktop was cited the most for companies with DWP between US$501m and US$2b, and Agent Portal was most integrated among companies with DWP up to US$500m. Our experience is that both of these capabilities are key to implementing operational efficiencies and improving speed to market. They are also foundational for enabling the digital agenda.

All respondents report significant integration with other systems, with claims and billing systems integrated most often

Figure 17: What types of data and supporting systems were integrated as part of your company’s policy administration transformation?

Policy administration transformation is the first step in an ongoing cycle of digital modernization

70%

62%

Third-party data

59%

54%

40%

Agent portal

Underwriter desktop

Billing system

Claims system

Types of systems Percent of toal number of records


Policy administration transformation is the first step in an ongoing cycle of digital modernization 03

When integrating with third-party data sources, we observe that on average implementations are including at least five to nine third-party data sources regardless of market segment and geography (see Figure 18). Based on our experience, as more reliable sources of third-party data increase, carriers will be looking to do more of this type of integration to ease the burden of data capture and to provide more specialized and personalized services. Implementation of modern policy administration platforms makes adding data sources more feasible from an overall time and cost perspective.

All lines of business have a high level of complexity in transformation integration

Figure 18: How many third party sources were integrated?

Number of third party systems

Commercial

Personal

Speciality

Grand total

30% 48%

1-4 5-9 10-24

29% 47% 18%

32% 47% 15% 6%

16% 5%

6%

Line of business

100%

100%

100%

More than 25


Policy administration transformation is the first step in an ongoing cycle of digital modernization

Leveraging a transformed policy administration system to expand digital offeringsCarriers can further utilize a transformed policy administration system to provide their customers (both agents and insureds) with key digital services. The 2016 US property-casualty insurance outlook highlights key future efforts carriers should be considering for their organizations. First, carriers will need to expand their digital offerings to align with the rising expectations for digital solutions. The demand will come from both consumer and commercial customers, as digital service models become common in other industries.

Although transformations are becoming more prevalent in the market, many carriers are struggling to develop digital strategies to improve the customer experience. In order to maintain competitive positioning or become an industry leader, carriers must undertake initiatives that will deliver more self-service functionalities to their agency force via portals. A transformed policy administration system provides the strong foundation to bring more capability to agents via the agency portals. Portals are just one key component of the digital experience and carriers will be able to leverage the new policy system to enhance the experience with other capabilities.

Carriers will be able to leverage more and better quality data from policy administration systems to further their analytic capabilities. Updating a core system, such as policy administration, will provide the means to collect more data than ever before. Carriers can use this data to develop new analytics which will help them to better understand the demands and needs of their current customer base. Effectively using this data to improve their analytic decision-making process will afford the ability to further enhance sophisticated modeling techniques and pricing methods. The data can also be leveraged to identify opportunities to further develop existing products and launch new ones that are segmented based on data captured in the policy system.

These are just a few crucial areas in which a carrier can build on their policy administration transformation effort. Even though these transformations are consistently delivering on what carriers planned for in their business case, it is only the first step in an effort to support digital modernization.

If over half of the survey respondents reported their transformation as complete, competitors are likely to also be operating with a transformed policy system, which means they are experiencing the same advantages in speed to market for new products and overall strides in operating efficiency. Carriers must use this successful transformation as a foundation to provide innovative solutions, such as enhancing abilities for their customers and utilizing their new streams of data to improve their decision-making processes.

Conclusion

While a transformation is crucial to improving core functionality and advancing a carrier’s digital agenda, it must not be viewed as the final step. Carriers can continue to build on the transformed policy administration system to better serve their customers.


Conclusion

While high satisfaction levels signal a successful policy administration transformation effort, carriers must continue to drive more initiatives to leverage new capabilities. With the recent pace of change in the insurance marketplace, a transformed policy administration system will shortly become a requirement to compete in the field.

The business case for carriers to begin a transformation is extremely strong. The capabilities created through a new policy administration system are hard to match, as they create the foundation for so many other enterprise processes and systems. The capabilities created through a new policy administration system are a springboard for so many other enterprise processes and systems - and it is a matter of survival now as many have already completed the transformation.

As our findings discovered, carriers must consider the following questions while undertaking their policy administration transformation:

ff Has enough emphasis been placed on the planning phase of the transformation? Do planning activities need to be revisited?

ff Are the proper controls in place to manage scope throughout the life of the transformation?

ff Have they properly structured their engagement management and corporate governance to quickly and effectively address issues which will arise during the transformation?

ff How can they properly leverage a transformed policy administration system to better serve their customer base?

ff Have they partnered with the correct system integrator for their unique transformation and desired future state?

ff Have they properly aligned and planned their next initiatives to effectively advance their digital presence?

While a transformation is crucial to improving core functionality and advancing a carrier’s digital agenda, it must not be viewed as the final step. Carriers can continue to build on the transformed policy administration system to better serve their customers. While the insurance market has made strides to transform their core systems, overall they lag behind other industries in digital innovation. Carriers that focus their efforts in this space can quickly become leaders in the marketplace going forward.


Contacts


Contacts

EY Advisory Services

AmericasLaura C. Ford +1 215 448 5209 [email protected] Philadelphia, United States

Steve Foster +1 317 850 0292 [email protected] Chicago, United States

Jonathan W. Kamp +1 312 879 2599 [email protected] Chicago, United States

Gail E. McGiffin +1 212 773 9408 [email protected] New York, United States

Craig Russell +1 441 294 5328 [email protected] Hamilton, Bermuda

Lars C. Tandrup +1 415 894 8899 [email protected] San Francisco, United States


Asia-PacificJeffery Eberwein +61 3 9288 8600 [email protected] Melbourne, Australia

EuropeStefano Bellandi +39 02806693782 [email protected] Milano, Italy

Preetham Peddanagari +44 20 7951 6979 [email protected] London, United Kingdom

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A springboard for improvement - Ernst & Young · into front office interactions. This is driving...

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