In order to help life insurers understand the key drivers of PAS modernization, the challenges faced during implementation and how to make your transformation a success, Equisoft commissioned Novarica to conduct a research study with carriers who had undertaken modernization projects.
From planning to implementation, this research provides the most current picture of how life insurance CIOs approached their PAS modernization challenges and how you can benefit from their experience.
This is the second of three articles that explore each of the major areas covered in the research:
Part One: 3 Major Themes Driving Change at Life Insurers
Part Two: 4 Critical Challenges That Must Be Tackled to Ensure Successful PAS Modernization
Part Three: 5 Elements That Make Digital Transformation a Success
The complete findings from the research are available by downloading the full report:
Transformational Journeys: Implementing Modern Core Systems At Life Insurers
Integration and migration
Life insurance CIOs interviewed in the Novarica research identified a number of potential issues—from planning to data conversion to testing—that can derail modernization. Most of those problems arise out of the inherent complexity of modernizing core systems—especially within the already complicated IT environments that exist throughout the rest of the enterprise.
The most common challenges cited in the study were: new PAS integration with other systems within the IT footprint; and migration of data from old platforms so they can be retired.
1. Scope challenges
When it comes to defining the scope of your project, it helps to be crystal clear about your main, initial goals for the transformation. And prioritize them. Keep these ordered targets front of mind throughout the planning of the modernization—they will be your guide, keeping you from taking on too much or following development paths that don’t contribute to the core reasons for the initiative.
Be sure to communicate to the whole team that not everything will get into phase one. Instead, the best way forward is to take an iterative approach in which you can create the core product required, and then test and learn before moving on.
2. Legacy block challenges
Life insurance products in particular can have spectacularly long lifespans—often measured in decades. And those policies, housed in your legacy systems, pose a particular challenge to any modernization initiative. Answering the question of what to do with your legacy blocks is critical to the success of most projects. You may or may not decide to migrate that data to your new target system right away, but either way it is important to map out the strategy for how and when it will eventually happen.
When data migration is an afterthought to PAS modernization, it often becomes an unforeseen impediment to overall project success because it is unplanned, expertise is not engaged to deal with the challenge, or budget may no longer be available.
3. Integration challenges
— Tanya Ho-wai, Senior Director, Insurance Products, Oracle
From Equisoft Accelerate Series Webinar: Insights From Executives On Major Factors That Determine PAS Modernization Success Or Failure
It takes a great deal of effort to identify all of the systems that need to be integrated as part of a modernization project, and even more time to map all of the required integration points. Part of the process of planning your integration, is understanding on a deep level what technical debt may exist—perhaps in the form of changes that need to be made to accommodate the requirements of the new system. Pre-planning becomes critical because you need to identify the contingencies that must be dealt with and determine how to deal with them ahead of time—especially when you're trying to tie in multiple systems.
4. Testing challenges
The importance of testing can sometimes be de-valued during the planning of PAS modernization because organizations assume the modern platform that’s being implemented has already been tested by the vendor. Which is true, but as the PAS is integrated into the insurer’s systems, new complexities arise. It’s necessary to test the entire solution and match it up against your specific use cases.
In the pre-planning stage, it’s a good idea to research the automated testing tools you'll use, and understand the investment required. Plan for the implementation of the tools and how you can perform end-to-end tests that will have value in post-production. That investment will continue to pay-off every time you upgrade or make changes.
Given these key challenges insurers face when preparing for PAS modernization, there are a few key takeaways executives need to consider:
- Identify your desired outcomes ahead of time—this helps the project teams understand progress over time
- Communicate and coordinate integration changes early—identify dependencies and what changes will be required if they are altered
- Create and fund a comprehensive testing plan before you begin the project so that you will have the means and the method to ensure your launch is successful
For more insights into what insurers are experiencing in their modernization journeys, read the full research report. Or, check out the webinar recording with Equisoft, Novarica and Oracle for more insights and discussion of success factors and important key takeaways.
Don’t miss the other webinars in the Equisoft Accelerate Series for more insights into how to succeed in your modernization projects.