Igniting reinsurance program modernization

A productive way to begin the modernization planning process is by defining the organization’s goals, what its future state will look like, and the high-level requirements of the new platform.

Once agreement has been reached on the goals for implementation, the next step is to define the scope and approach. Organizations should consider what’s included and excluded from the preliminary and expected subsequent scope, the timing and key dependencies, and the initial design of the approach. But it’s important to recognize that this initial approach will likely evolve as the project advances.

The final phase of the planning process is to determine the most important vendor and system requirements. These requirements should be weighed by their importance, which may change over time as the organization better understands business needs and the prioritization of the functionality.

As they move into the vendor selection process, many organizations can create a scoring framework influenced by focused selection criteria that reinforces critical project elements, such as breadth and depth of functionality, strength of company and resources, technology platform, ease of use, and cost of ownership.

To dive even deeper into a vendor’s capabilities and how they match up with the requirements, a request for proposal (RFP) provides an opportunity to gather additional information about the company, the types of resources they’ll bring to the project, their customers, the technology platform, and the costs.

Once all system demonstrations are complete, vendors with the best score—indicating the likelihood of project success—may be given a proof of concept to help illustrate the vendor’s capabilities. Some organizations decide to embed the proof of concept during the RFP, while others may use it when making their final selection.

As insurance companies begin to dive into a greater level of understanding of their selected platform and vendor, they’ll likely continue to discover gaps and opportunities. Moving into the implementation phase, organizations should establish a process to work through those gaps, analyze the outcomes, and track the cumulative impact on the business.

While every implementation is different, this nine-step methodology can help guide your journey. Although it may look like it at first glance, this isn’t a linear process. Organizations embarking on their first system implementation will quickly learn that there is a lot of interrelated work that will need to take place before go-live, and some of these steps will be revisited and refined over time.

Processes and controls are likely to change or need an overhaul as a result of the introduced automation. It’s important to evaluate these early in the process to confirm proper resource alignment, process and control design, and customization definition. A key guiding principle is to build based on how the process should be designed, not how it works today.

Throughout the implementation journey, data and reporting activities can be one of the work streams that may take the longest, so we recommend getting this step designed and started early.

So the new system is live. What happens now?

After go-live, organizations should be prepared to manage day-to-day support—from answering user questions to addressing errors and conducting quality assurance.

Ongoing maintenance can also include integrating vendor releases and new endorsements into the system, making necessary changes when business processes are altered, monitoring key business case assumptions to see if the new reinsurance program aligns, and making adjustments to the system where needed.

Many organizations aren’t able to achieve their entire wish list during the initial implementation, so now is the chance to revisit other high-priority functionalities and configure or customize other elements of the system.