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 last of three articles that explore each of the major areas covered in the research:
The complete findings from the research are available by downloading the full report:
Modernizing your core policy admin system is a generational effort—a significant project that affects all aspects of the organization, and that will endure for 20 years or more. It is critical for leaders initiating such a project to make the right decisions today, so they don’t leave a legacy of consequences for those who follow. Our research revealed 5 critical elements for success:
The research completed by Novarica and Equisoft clearly showed that one of the biggest success factors in their projects, was the amount of time and effort devoted to pre-planning. They stressed the importance of giving the planning the time it deserves—especially in light of that 20-year long tail that will follow the project.
CIO comment from the study
Successful pre-planning requires building a strong business case, communicating it clearly to all stakeholders—and ensuring they are bought in. The key is to align your project goals with the existing corporate goals. It’s easier to achieve buy-in from the key decision-makers if they can see how your project supports their vision for the future of the entire organization.
The communication piece is critical. Transparency is non-negotiable—otherwise you won’t receive the targeted feedback you need to foresee and workaround potential issues with the plan. And true buy-in will never be possible without a complete understanding of all the risks and benefits. The most successful projects translate that sharing and buy-in process into a governance and change management plan before development gets under way.
An offshoot of the overall plan that is vital to project success, is a good resource plan. This will identify not only the internal resources with expertise and experience that will be required to complete the project, but also the gaps. The plan outlines how those resource holes will be filled by new hires, consultants, and vendor resources to round out the team. As you involve your upstream and downstream system owners, and they begin to understand what the details of the project will mean for them, they be able to help you identify potential issues and improvements, both large and small.
CIO comment from the study
3. Business visioning
Business visioning describes a process of examining your current situation, identifying the challenges you need to overcome and then imagining what your company will look like once the transformation is complete. Once you have a shared vision for the end result, you can define the capabilities and workflows that will be a part of that future state.
As you work through this process, it’s important to focus on the new capabilities that a modern system will give you. Don’t just bring old workflows forward into the new reality you’re building. Instead, look to eliminate legacy processes and take full advantage of the potential of your new systems.
Keep in mind that, as you develop your vision, you should also look to prioritize. It may not be possible to achieve your entire end-to-end solution in phase one of your project, so focus on the critical elements necessary to get into production.
4. Define and restrict project scope
There are many approaches to modernization—from big bang, which was more common in the past—to a greenfield iterative approach, which is gaining increasing traction today. For most insurers looking to jumpstart modernization and see benefits in the near term, the way forward is to choose a small number of products you want to modernize and implement a new PAS solution for them as phase one. And, in order to accelerate implementation, it is best to avoid customization as much as possible. Ideally, cloud-based, SaaS solutions that are ready to go, out-of-the-box are the best starting point. Because they are rules-based and therefore highly flexible without having to change code, they give organizations a quick way to go live and take control of their system.
5. Data migration
Fully unlocking the ROI potential of your PAS modernization is really only possible when you are actually able to retire all of your legacy systems. That makes the ability to migrate policies off those platforms and onto the target system a critical success factor.
However, many companies make the mistake of not considering data conversion at the outset of the project. It gets left to the end—and unfortunately often suffers because there is not time and few resources remaining to do migration properly. In other instances, organizations feel it’s a small job that can be handled internally. Only to run into trouble because of lack of experience, inadequate tools and a gross underestimation of the size and complexity of the conversion.
Instead, the best practice would be to perform a block analysis to determine the number of systems involved, product types and complexity, volume of policies, and all the variations of policies across different systems. This analysis is the basis for determining how and when to perform migrations—and on which products. Ultimately you should have a conversion strategy, tailored to your unique landscape, that is integrated fully with your overall modernization plan.
The key success factors for PAS modernization identified by the executives who participated in the research included:
- Ensure business readiness for PAS modernization
- Secure buy-in from leadership and across the organization
- Change management communications
- Envision new processes
- Don't carry legacy processes into new world
- Understand resource needs
- Consider resource impacts across departments
- Perform block analysis
- Understand your conversion objectives and plans for achieving them
For more insights into what insurers are experiencing in their modernization journeys, read the full research report. Or, check out the webcast 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.