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Augmenting

Augmenting A Low-Risk Way to Test Out New Products and Markets Seize opportunities and launch new programs quickly and effectively-in spite of your policy administration system Carriers want to take advantage of revenue opportunities in the program business. But their inflexible legacy systems are holding them back. The answer is to augment the existing system with an agile, turnkey solution designed to meet the requirements of the program business. The program business is thriving, and the success factors are clear. PREMIUMS ARE GROWING $2.7 billion In 2012! 2011 $24.7 billion 10.8% direct premiums 2012 $27.4 billion 3.3% general P&C marketplace KEYS TO PROGRAM BUSINESS SUCCESS Quick incubation cycle Ability to support a "fast fail" Build on success and spin off additional programs Minimize financial risk by reducing implementation cost Appetite to launch as many programs as possible to determine which are the most successful "Speed to market was absolutely critical for us in choosing new policy administration software. We needed a cloud-based system that got us up and running with our new insurance programs in a few short weeks." Steve Fitzpatrick, CEO, Glencar Underwriting Managers Legacy systems cannot keep up with program growth. THE PROGRAM BUSINESS REWARDS SPEED AND AGILITY, BUT 61% 78% 60% of carriers report that their of commercial systems report that their current current policy administration are 10+ years old system technology system does not respond to restraints are a problem new market demands, which for their business? results in lost business opportunities TOP THREE LEGACY-SYSTEM PAIN POINTS RIP-AND-REPLACE IS PAINFUL AND COSTLY Having to depend on IT resources for all system changes 2.9 Difficulty meeting current business years requirements of the organization Average time to replace a legacy policy administration system4 $ Competing priorities for IT resources Augmenting offers significant benefits and results. TYPICAL ENTERPRISE POLICY ADMINISTRATION SYSTEM UPGRADE Vs. AUGMENTING WITH A PROGRAM-SPECIFIC POLICY ADMINISTRATION ENTERPRISE POLICY AUGMENTING ADMINISTRATION SYSTEM High Risk Low Requirements input From all lines of business From a single line of business Significant Impact on IT Minimal Probability of project delays High Low 000 Development Multi-year Weeks time Millions of dollars Cost Thousands of dollars Staff Dedicated IT staff Business analyst requirements Review Months Days 31 cycle time Bureau content library, rates, rules Pre-packaged from vendor Dedicated IT staff and forms update Changes and updates Dedicated IT staff Managed by business analyst TIME FROM REQUIREMENTS TO PRODUCTION 45 <6 weeks 90 16 days days weeks THOMCO Glencar Florida Municipal NSM Insurance Underwriting Managers Insurance Trust Group SPEED TO MARKET TIME TO RATE POLICIES MIS Insurance Services, LLC Lockton Risk Services Decreased from: 6 months to 60% 1 week Meadowbrook Insurance Reduction Results: MIS Insurance Services, LLC V Speed to market Decreased to: V Compliance adherence / Scalability V Flexibility V IT stress relief A true business partner 45 minutes For more information on how augmenting can enable your organization to seize the opportunities in program business with lower cost, less risk and faster speed to market, contact Instec at (630) 955-9200 or visit www.instec-corp.com. Sources: 1 "The TMPAA State of the Program Business 2013," Target Program Administrators Association. Furtado, Karen, "Policy Administration: P&C Plans and Priorities," Strategy Meets Action, July 2013. Furtado, Karen, ibid. Furtado, Karen, ibid. Instec 3. 0-

Augmenting

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How to launch new programs with minimal risk to your company: a compare and contrast

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