Update: Celent Evaluates Policy Administration Vendors
New reports assess dozens of vendors and find the pool of options carriers have to choose from is not only alive, but still growing.
Insurance Networking News, September 16, 2011
Earlier this week, findings from Celent asserted core system modernization will remain a concern for insurers for another decade, dovetailing those assertions, two reports were released Wednesday assessing the policy administration system options available to North American P&C insurers in personal and commercial lines.
Celent released their biennial reports titled “Policy Administration System Vendors, North American Commercial P/C Insurance 2011,” profiling 50 commercial policy administration systems—33 full profiles and 17 limited— in the first report, while the second report assesses 34 policy administration systems in use for personal lines—25 full profiles and 9 limited.
The report cites a flurry of recent policy administration implementations, noting that over 230 insurers licensed new policy administration systems in 2009 and 2010 and that at the end of 2010, about 100 insurers were in the process of implementation. Donald Light, Celent senior analyst and co-author of the report, sees this market growth as promising but says it presents more work for both carrier and vendors.
For vendors, according to Light, the work comes with added competitive pressure: “In terms of vendors, how do you stand out? They’ve been making big investments in usability, which we think is a great thing, because it will improve accuracy and efficiency within the carrier staff and users. But the issue becomes, because of the proliferation of options, what have you done for me lately? Not just for the insurance company, but for the company’s technical staff, who has to maintain the system over time.”
“For insurers,” says Light, “I think the takeaway is that there is gold within the big pile of straw. The mere presence of the large pool of vendors and solutions makes the task of the insurance company a little harder, in terms of performing due diligence properly. It’s a task that requires more care and levels of effort now.”
Each report offers to help carriers find the gold buried in the pile by providing detailed profiles of every vendor that participated, including charts plotting all participants for direct comparison based on Celent’s categories of evaluation. In each of the full reports, Celent designates two winners per category. There were four categories of XCelent Awards: Advanced Technology, Breadth of Functionality, Customer Base and Depth of Service.
The categories of service and customer base assessed a vendor’s account quantity, quality and variety of clients in and out of North America and size of service and support staff along with customer feedback after implementation was used to evaluate service, respectively.
The technology category evaluated vendors based on the modernity and consistency of code base, the need to customize code/use scripting for implementation and the configurability of processes. The technology category was partnered with an assessment of functionality, which focused on usability, diversity of use in terms of business lines as well as regionality and “availability of indicative advanced functionality.”
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