The insurance industry worldwide is undergoing a significant change accelerated by the financial meltdown and changing demographics of its customer base. In this blog, we will discuss the challenges, approaches and possible solutions to dealing with the transformation that the industry has unwittingly entered into.

« March 2018 | Main

June 26, 2018

Next Generation Policy Admin System And Cloud

Like many other industries, P&C insurance industry is undergoing huge digital transformation. It is facing huge margin pressure due to the fierce competition and increased calamities etc. These call for operations to be run at very high efficiency levels and for better risk mitigation. 

There is a change in the customer's mindset as well due to digitization etc. Mobile channels are used more often for policy servicing and claims etc. Customers have tools to compare rates of multiple providers before making a decision at their fingertips.

Localized insurance providers are turning out to be the biggest threat to large players in the market due to the local flavor they can bring in apart from the cost advantage to the customer. As most of these providers are startups, they start with the latest technology stack and computational models. Due to lack of legacy data, they need not worry too much about regulatory and compliance requirements which in turn increases their operational efficiencies.

There is increased usage of technology across the board in insurance policy life cycle right from quote to claims:

  • Drones are used for property assessment and claims estimation. 
  • Analytics are also used for customizing products for customers
  • IoT devices are used for real time data collection
  • Claims and policy management processes are expected to be transformed using Block Chain.

All these changes require big players to make big changes to their core systems to stay relevant. At high level, the core features of new system can be classified into the following:


Policy administration system (PAS) is a key component of P&C insurance provider's application landscape as this the place where customer is going to directly interact with the provider's system. This system must be flexible enough to perform the activities with utmost ease and at the same time intelligent enough to offer new services based on the usage etc. NextGen PAS need to have the following characteristics to stay relevant in the current times:

NextGEN_PAS2.pngThese are very important to implement modern models like 'Usage Based Insurance(UBI)" etc. Lot of collaboration is needed among multiple systems which requires strong collaboration platform. This where cloud computing plays a key role. 

The underlying platform should be highly elastic and have seamless integration capabilities with IoT devices etc. With the amount of investment Cloud Service Providers (CSPs) are making into their service offerings, cloud adoption as the first step of their modernization journey would help insurers get to the target state faster.

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