Streamlining Insurance Operations: The Role of Policy Administration Software

In this article, we’ll be exploring the origin of policy administration systems (PAS), highlighting key players within the sector and looking at a study published in 2022 IEEE International Symposium on Software Reliability Engineering Workshops (ISSREW). Discussing validation of PAS automation software within Insurance against traditional calculations specifications.

The Rise Of Policy Administration Systems

The increasing demands of modern policyholders for fast service and transparency have driven insurance companies to rethink their business models. The classic pen and paper approach are now giving way to advanced policy administration software.

Policy Administration Systems (PAS) have been used in the insurance industry since the late 20th century, becoming increasingly prevalent in the 1980s and 1990s. These systems were developed as part of a broader move towards digitalisation and automation within the sector. Early PAS were basic in functionality, focusing primarily on record-keeping and processing basic transactions. Over time, these systems evolved to become more complex and integral to insurance operations, supporting a wider range of processes including underwriting, claims processing, and customer relationship management.

The adoption of PAS was driven by the need for greater efficiency, accuracy, and speed in handling insurance policies, which became particularly important as the volume and complexity of insurance products grew. The technology behind PAS has continuously evolved, incorporating advances in database technology, user interface improvements.

The policy administration system architecture leverages advanced technologies like Robotic Process Automation, Intelligent Document Processing, and Machine Learning. The upshot is not only improved business processes but also decreased labour costs and increased customer satisfaction.

The Established & Disrupting Key Players

Several pioneering companies were instrumental in the early development of Policy Administration Systems (PAS) for the insurance sector. Some of these key players include:

  • CSC (Computer Sciences Corporation): CSC was one of the early leaders in providing IT services and systems to the insurance industry, including comprehensive policy administration systems. Their products helped insurance companies manage the entire lifecycle of policy administration from issuance to claims.
  • Accenture: Through its consulting and technology services, Accenture has long been involved in transforming the IT infrastructure of insurance companies, including the development and implementation of PAS solutions.
  • SAP: Known globally for their enterprise resource planning (ERP) software, SAP also developed solutions tailored for the insurance industry, integrating policy administration into their broader offerings.
  • Oracle: Oracle entered the insurance PAS market with products that integrated their robust database technologies with insurance-specific applications, helping insurers to manage and analyse vast amounts of data efficiently.
  • Guidewire Software: Emerging slightly later than some of its counterparts, Guidewire has become a leader in providing core system software to the global insurance industry, focusing on policy administration, billing, and claims management. Guidewire is very much still a key player, providing the insurance sector with top PAS software, with the ability of using generative AI.
  • ICE InsureTech: ICE provides a robust insurance software platform that helps manage the entire insurance lifecycle, from underwriting and policy administration to claims management. They cater to a variety of insurance lines, emphasising customisation and regulatory compliance.
  • Instanda: Instanda offers a highly configurable insurance software platform designed to help insurers, brokers, and MGAs quickly launch and manage products. Their tools allow for end-to-end policy management and are known for their user-friendly interface and fast deployment times.
  • Novidea: Utilising a cloud-based approach, Novidea offers an insurance platform that provides real-time insights and end-to-end management of the insurance lifecycle. They focus on boosting operational efficiency and enhancing customer experiences through data-driven decisions.
  • Acturis: Acturis offers a cloud-based software platform widely used by insurance brokers and insurers across the UK and Europe. It integrates policy administration with other functionalities like CRM, billing, and claims management.
  • Open GI: This company provides a broad range of software solutions and services that support the insurance distribution process. Open GI’s products cater to brokers and underwriters, focusing on streamlining policy administration and other insurance operations.
  • CoverGo: An API-driven insurance platform, CoverGo offers modular insurance technology that supports all types of insurance lines. Their platform allows for the creation of flexible and scalable insurance products with robust policy administration capabilities.
  • EIS: EIS provides a digital insurance platform that enables insurers to innovate and operate like a tech company. Their system supports core insurance processes, including policy administration, across all major lines of business.
  • Duck Creek Technologies: They offer solutions for P&C insurers, focusing on policy administration, claims, and billing. Duck Creek’s platform is known for its configurability and the ability to adapt to changing market needs.
  • Majesco: Specialising in cloud insurance software, Majesco’s solutions cater to both P&C and life insurance sectors. Their platform supports policy, claims, and billing management along with digital transformation capabilities.
  • Sapiens: Sapiens provides software solutions for the insurance industry with a broad portfolio that includes policy administration systems for life, pension, annuity, and general insurance sectors. Their platforms are designed to enhance operational efficiency and customer engagement.
  • Salesforce: Salesforce offers a platform that, while primarily CRM-focused, can be extensively customised to support various insurance processes, including aspects of policy administration. It enables insurers to enhance customer relationships, streamline operations, and integrate with third-party applications available through Salesforce’s AppExchange to expand its capabilities into direct PAS functionalities like policy lifecycle management, claims processing, and automated underwriting workflows.

On the other side of the spectrum, we have a few notable players that have already disrupted the InsurTech space with their PAS capabilities:

These companies contributed to significant advancements in the insurance technology space, each playing a role in developing systems that enhanced operational efficiencies, data handling, and customer service capabilities within the insurance industry, their efforts paved the way for modern InsurTech industry.

The Results and Actionable Insights

The study available through IEEE Xplore provides valuable insights into the outcomes of modernising Policy Administration Systems (PAS) in the insurance sector.

The technique used in this study has been evaluated on a digital transformation project of a large insurance company on 12 real-world calculations through 254 policies. The evaluation resulted in effort savings of approximately 92 percent against the conventional manual validation approach.

Below are some key highlights demonstrating the tangible results from such initiatives:

Increased Efficiency: The adoption of modern PAS tools is shown to significantly streamline operations within insurance companies. These systems automate and optimise various processes, from policy issuance to claims management, reducing manual tasks and associated human errors.

Improved Data Management: Modern PAS facilitates better data handling capabilities, enabling insurers to manage and analyse large datasets more effectively. This improvement in data management supports more informed decision-making and enhanced reporting capabilities.

Enhanced Customer Service: By implementing advanced PAS solutions, insurers can offer faster and more reliable customer service. The systems support real-time data processing, which helps in providing timely responses to customer queries and faster claims processing, thereby improving overall customer satisfaction.

Cost Reduction: The study points out that modern PAS can lead to substantial cost savings. These systems reduce the need for physical documentation and streamline administrative processes, which in turn decreases operational costs. Over time, the reduced need for ongoing maintenance and IT support for outdated systems also contributes to cost efficiency.

Risk Management: Modern PAS are equipped with better risk assessment tools that allow insurers to understand and mitigate risks effectively. This capability is crucial for developing accurate pricing models and for ensuring compliance with regulatory requirements.

Scalability and Flexibility: With modern systems, insurance companies gain the ability to quickly adapt to market changes and regulatory updates. The modular architecture of modern PAS makes it easier to introduce new products and integrate with other platforms, providing a scalable solution that grows with the business.

This study underscores the critical importance of PAS modernization in enhancing operational capabilities and competitiveness in the insurance industry. For a detailed analysis and more comprehensive results, you can view the full study here: (https://ieeexplore.ieee.org/abstract/document/9985149).

PAS Systems and Integration

The landscape of Policy Administration Systems (PAS) is evolving rapidly, shaped by both longstanding industry stalwarts and disruptive new entrants. As technology advances, traditional systems are being upgraded with functionalities like AI, machine learning, and cloud computing, improving efficiency and enhancing the customer experience across the board.

The main problem most Insurance companies face when acquiring PAS systems is IT fragmentation – It is crucial for existing IT infrastructure to integrate with new PAS systems.

Amidst this transformation, companies like Simpli are making integration easy, by leveraging technologies such as Robotic Process Automation (RPA) and AI, Simpli provides tailored solutions that enhance the operational capabilities of insurers. This ensures that insurers can not only manage policies effectively but also connect seamlessly with other essential functions within their operations.

For insurers, the choice of a PAS provider is more crucial than ever. It’s not just about replacing old software with new; it’s about choosing a partner who can help navigate the complexities of today’s tech-driven market. The right PAS solution should offer flexibility, efficiency, and the ability to scale as the market evolves.

As we look to the future, the importance of integrating advanced analytics and real-time data processing into PAS is clear. Such capabilities could transform key aspects of the insurance industry, from improving transparency to enhancing fraud prevention.

Navigating the PAS market can be challenging, but it’s also filled with opportunities. For companies like Simpli, it’s about striking the right balance between innovation and practicality, ensuring we provide solutions that not only meet current needs but also equip our clients for future challenges.

If you have any specific questions or would like to learn more, get in touch with one of our leaders:

Michael McGurn (CEO & Founder) – mick@simpliautomation.com

Allan Murego (Head of Partnerships) – allan@simpliautomation.com

Ilya Laptev (Head of Growth) – ilya@simpliautomation.com