Insurance Business Group

Policy Administration Solution

Insurance Technology Challenging Landscape

• 70% of P&C Claims require 4-6 handoffs; 48% take three weeks to process
• 75% of the total P&C claims costs are losses and loss adjustment expenses, which are
increasing.
• Internet importance for insurance will grow as customers increase use and experience of online
banking and Internet sales of other financial and consumer products.
• Reinsurance systems integration costs could be decreased by 60-70% using industry standards
and shared services.
• Sales of Life insurance policies have declined over the past 10 years, while acquisition costs eat
up almost half of each premium dollar.
• Insurance companies could save 10-15% annually per policy by integrating the Internet into their
sales and administrative processes.
• Insurers' planned technology investments in agent automation will not increase sales or profits
because it will not fix broken business processes that:

Create underwriting bottlenecks

Fail to enforce industry data standards, but use proprietary standards instead

Don't allow life insurers to reach new markets

Source: Forester, Baine, Morgan Stanley Dean Witter, TCi Research, ACORD, and LOMA

www.datamatics.com
 Insurance Business Group
Policy Administration Solution

Policy Administration System

Policy Administration Systems form the core of insurance processing and are fundamental to an insurer’s
ability to operate efficiently and capitalize on emerging opportunities. Policy Administration Systems has
firstly been used for the core policy processing systems that processed and maintained policies. Now
policy administration system can be used for this traditional software and for fully integrated suite that
handles functions from product development tools to quoting, rating, billing, claims management, and
others. There are ‘packaged solutions’ or ‘off-the-shelf’ integrated products, which can be implemented
to handle the operations. However, most of the mid sized and large insurers are equipped with multi
application home grown legacy landscape, which requires customized modernization. Plug and Play
components are also being implemented to handle specific functions while co existing with the legacy
systems. Packaged solution seems to be working well with Greenfield operations. Datamatics
understand the key business drivers and challenges in the policy processing function.

Business Drivers

Product flexibility/speed to market Speed-to-market of

new products is still important, but so is the ability to create
differentiated products that are less commoditized,
especially as differentiation through creative compensation
becomes more difficult.
Cost Reduction Carriers continue to look to cost
reduction in the face of an increasingly commoditized
market and limited investment returns.
Web-enablement At a minimum, carriers should offer
policy view and some transactional capabilities for both
customers and producers.
Consolidation/Integration Whether as a result of
mergers, acquisitions, divestitures, or simply cost cutting,
carriers are still striving to reduce their number of systems
and/or servers, and to make remaining ones interact
seamlessly.
Business process flexibility/Improvement Fixing broken
or sub-optimized business processes can prove difficult at
best when antiquated systems won’t support new and
improved processes.
Regulatory Compliance The already difficult task of
maintaining compliance grows harder every year.
Distribution Reach Alternative channels of distribution
requires seamless integration of front end with the back
end
Modernization Cost of legacy maintenance is provoking
business owners to look at newer modernization and
migration approach. SOA compliant applications enable
futuristic designs

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 Insurance Business Group
Policy Administration Solution

Business Challenges

Rating
Lines Business Focus

Automation required to speed up new product rollout and
Property & Casualty (Personal
response quotes
& Commercial Lines)

Changing rating standards (Coefficients, parameters,
Fire, Motor, Marine, Cargo, Hull,
regulations)
Liability, Workmen’s

Rating MIS requirements and statutory reporting needs to be Compensation, Household,
supported by the rating system. Travel, Personal Accident

Need of interfacing rating engine with actuarial and Life & Health
underwriting support system.
Individual Life (Traditional & Unit
Underwriting linked Variable life), Medical

Need to take faster decisions in order to prevent backlog in Insurance & Managed Care
new business stream. (HMO) Products

Incorrect loadings on sub-standard cases may affect long- Group Life & Pension Funds
term profitability or cause your business to lose its Specialized Re Insurance
competitive edge.

Lack of management information leads to product pricing and treaty management based on
assumptions rather than real facts.
Policy Issuance

Automating Issuance, Endorsements, Out-of-Sequence Transactions needs to be handled real
time

Authorization Levels and Limits needs to be monitored

Referral Workflows needs to be managed

Document management and Printing/Publishing Functions needs to be supported

The total cost of issuing policies should be lowered

Need for online support.
Accounting/Billing

Invoices, Revisions, Reminders, Cancellations, and reinstatements need to be turned around
fast.

Issue of Checks on Demand should be supported

Accuracy, timeliness, flexibility, and prompt
resolution of discrepancies are the most important
issues.

E-business support and flexibility in payment
methods are becoming important competitive
issues.
Reinsurance

Prompt processing of treat and facultative re
insurance

Reacting to changing legislation.

Setting up of re insurance rules

Issue of Facultative slips and bordereaux
Claims Processing

Reduction of manual intervention

Reduction of the claim handling time

Identification of fraudulent claims

www.datamatics.com
 Insurance Business Group
Policy Administration Solution

Datamatics Solutions

Datamatics offers a best-of-breed policy administration solution for the insurance industry. Our solution
framework is customized to co exist in the legacy multi system environment integrating plug-n-play
components for niche functions with modernized or migrated applications for core operations.
Datamatics’ Insurance Business Group contributes to 27% of the corporate revenue and has the
experience of working with global insurance carriers as well as product companies.
Our internal team of business analysts and domain consultants coupled with your strategic alliances for
niche technology areas for insurance enables us to offer the best consortium of consulting as well as
application development and deployment.

Datamatics’ Insurance Business Group offers the following services, which empowers insurers and
service providers in the insurance space to handle the industry dynamics

Functional Focus Areas

Business Process Re engineering Policy Administration New Business & Underwriting
Systems Client Database Management

Business & Requirement Analysis Parameterized Rating
Policy Servicing

Architecting Modernization Road Claims, Agency & RI Administration
Maps BI & DW
Channel Management & Agency & Broker Management

Design & Development of solution Distribution Automated UW & Quotation System
framework
Sales CRM & Benefit Illustration
(Integrating Modernized/Migrated Interface ACORD Standards
Applications and best-of-breed Standardization & Statutory Reporting
Components) Compliance
Interfaces with Associations
e-Business Portals Customer Servicing Portals (POS)
Agency & Claims Portal

Design & Development of plug-n-play Service Oriented Architecture (SOA) compliant modules to address niche
functions like Parameterized Rating, Automated Underwriting, Policy Issuance, Claims Administration, Agency
Management etc

Webifying legacy & User Interface Transformation to extend reach and enhance usability

Solutions to handle internal & external interfacing & messaging requirements based on industry XML standards.

Data migration from multi sources to a consolidated platform for new product implementations.

DW & BI solutions built in over multi application legacy or new packaged implementation

Business Process Management, Workflow, Imaging and Document Management solution implementation

Customer Benefits

Increased life and value of legacy applications

Reduced operating costs upto 30%

Promoted faster introduction of insurance products to market

Improved service efficiency upto 22%

Studies have shown that with a right mix of process improvement, outsourcing and technology
utilization policy processing cost can be reduced by up to 25%.

www.datamatics.com