The role of an actuary in a policy administration system implementation has been saved
The role of an actuary in a policy administration system implementation
The benefits of a core systems transformation can only be fully realized by involving key business users at every step of the process. Insurance companies often overlook including actuaries as part of their core systems transformation teams as they are not the primary end-users of the eventual policy administration system. This oversight could cause insurance companies to not capitalize on the value that actuaries bring to the table with their insights into product, underwriting, rating, and pricing and analytics.
Benefits of a New Policy Administration System (PAS)
Insurance is a service and knowledge-based business, which means that access to information and technologies are necessary for attracting and retaining a profitable customer base. Thus, an insurance company's core systems are instrumental in helping to compete for the highest value customers. Many property and casualty insurance companies are embarking on core systems transformation efforts in order to improve business agility and increase efficiency throughout the risk lifecycle. Achieving the desired benefits of a core systems transformation program depends as much on business capabilities as it does on the technology. To develop a technology platform that enables the desired business capabilities, it is important for the appropriate functional resources that understand these capabilities, what needs to be in place to enable them, and the benefits to be gained, to be drivers of the solution.
Actuaries are instrumental to PAS implementation success
Actuaries analyze and manage the risks within insurance companies through their role in pricing, reserving, and risk management functions. Actuaries are highly skilled in the use of analytics and are one of the key users of data at insurance companies. Although actuaries are traditionally associated with risk and analytics, they also understand the business of insurance and the products being offered. This understanding goes beyond the numbers and provides actuaries with a unique view of how product, underwriting, rating, and analytics come together. Insurance is often very complex with regard to the coverages themselves, the heterogeneous exposures and risks that are underwritten, and in certain instances, the requirement of individually negotiated and priced contracts. Actuaries' deep understanding of these complex issues help them play an important role in many key operations and activities at an insurance company. PAS implementations are no exception.
As business intelligence and analytics are increasingly providing new competitive capabilities to improve underwriting processes, core systems investments continue to be critical in improving speed to market and product flexibility. When building analytics into the PAS journey, insurance companies should consider these analytics capabilities before, during and after the PAS implementation. As one of the key users of data and champions of analytics, actuaries help PAS implementations realize one of the key benefits of a modern PAS, in encouraging and enabling advanced analytics.