Stacey Cheese, Edgewater Consulting Insurance Practice presented on the modular approach to policy administration at the LOMA LIC Technology Committee meeting in July 2013.

1. Sometimes Wrong Is Right

2. Agenda
► Issue
– Carrier solutions are based on Large carrier implementations
– Is the easy answer actually right
► Examples
– The PAS Syndrome
► Path
– How to start on the correct path
► Discussion

3. The Easy Answer = Right Answer?
► Easy answers become the right answer for mainstream
– Consultants, Analysts, Vendors look for the path of least resistance
• What has worked in the past?
• What are the industry norms?
• What is advice that cannot be challenged?
► Quick solution decisions that are defendable are the mainstream
– Large – Mid carriers look for the wholesale replacement and refurbishment
of enterprises or specific issues (PAS)
• Short High spend with perceived success
– CIO decisions supported by Analysts and Vendors
► Enterprise strategies become vanilla documents

4. All carriers face the same issues – same answers?
► Given the right approach is the rip and replace and all carriers
face the same issues – one size must fit all?
► What about……….
– “I do not have a $25M budget for 2014……”
– “I can’t wait two years for this, we need to capture that market now….”
– “Where will I get the internal bandwidth to support this…..”
► The right answer is the right answer……..if you happen to be the
right size for that answer
► Small – Mid size carriers need to avoid mainstream thinking
– Creativity
– Bespoke
– Focused

5. The best Wrong answer – is the right answer
► Small / Mid carriers need to think about what is the best
approach that is not the one they cannot succeed with
– What are my 10 year end goals?
– How can I make immediate improvements in weak areas without wasting
time and money? How can I gain a greater ROI?
– What is my business end game?
► Alternative thinking for a modern market
– Dynamic wins, every time
– Technology can fill the void of past issues
– Build your enterprise the way a vendor builds their product

6. Example: The PAS Syndrome

7. ► Single, monolithic application
► Replacement of PAS systems is
a large scale undertaking
► Pushed by PAS vendors and
analysts
► Proven strategy for large
carriers
► Huge investment but still
monolithic?
Legacy PAS
7
PAS Data
Policy Admin System

8. ► Extend or replace database
schemas
► Modify PAS source code
► Makes system upgrades
unnecessarily long, expensive
and painful
– In many cases, system cannot be
upgraded
Customizing a Legacy PAS
8
PAS Data
Policy Admin System
Commissions
Commissions

10. ► Each component (or module)
provides specific functionality
► Exposed as a well-defined
interface
► Components are integrated
together using industry
standards such as ETL, SOA or
workflow processes
► Components can be swapped
out or modified easily
– Other components aren’t
impacted; only the interfaces
Component Approach
10
Policy
Admin
System
Billing
Commission
Policy MaintAgent Maint
Claims

11. App Store = Future
► Moving to a component based architecture can be done overtime
– Start with a blended old PAS, new modular design with an ESB
– Overtime integrate and create Apps to solve your business needs
– Create a framework for success
– Incorporate many varied App solutions
• Cloud based
• Hosted
• BPO integration
• Home grown
► Carriers need to move now to a framework that allows app generation,
purchase to solve bespoke needs
– Remove the need for wholesale enterprise changes
– Share Apps amongst carriers
– Co-Sponsor App development (The Deltas approach to success)
– 85% of all functionality can be common, your market value is not in your code

12. The Component Enterprise
8/22/2013 12

13. How To Get Started

14. Plan to Succeed
► Customized Enterprise Roadmap
– Combine all business goals and IT strategies to provide a roadmap of
projects, estimates, timeline, order and market evaluation
– Planning any IT spend is more critical than ever
– Boiler plate approaches do not work
– Your organization, your strategy, your goals

15. Process Should Drive Your Enterprise
Building blocks for an enterprise are comprised of a set of tuned
interlinked processes
► Process focus not requirements focus
► Focus on Process differentiation not definition
► Drive strategy and systems from process
not process from systems
► Interchangeable components, Cloud,
in-house, BPO, packaged
Framework
Process
Components

16. Discussion