Insurance rating software could be condemned as old hat. Over the years, a multitude of column inches have been written about the power of software that delivers business rules logic and automatic decisions. So why are there still so many examples of inefficient processes and the inability to react quickly to changing market conditions? Both of these have a direct and adverse effect on bottom line profitability.
Self-evidently, the insurance industry has a long way to go. It certainly can’t claim to have embraced the opportunities offered by the power and versatility of the best rating software.
Key attributes of the best insurance rating software
To offer true benefits, we believe that rating software has to deliver in three areas:
Ease of use
- The software must be user-friendly and enable you to deliver change quickly. Authorised business users should be able to create and manage rules easily without reliance on IT development. The configuration journey should be intuitive and quick to apply.
- The software must deliver power into your hands. Power over the business rules that reflect your risk appetite, your pricing, and your business workflows. The right solution is the one that supports the changing needs of your business, from simple rules through to infinitely complex calculations and process flow designs.
- Service-Oriented Architecture
- True SOA software should enable you to scale for enterprise-class performance. It should offer you the architectural flexibility to use existing systems and embrace new technologies, at the same time, if necessary.
If the software you use already has these attributes, you should feel confident that you can rely on it to keep up with you as your business evolves and grows.
Choosing the right insurance rating software
Choosing the right rating software for your needs can deliver measurable business benefits. This is because, in an increasingly competitive market, the rating and rules that manage business processes and risk are critical both to success and profit. Shouldn’t you be in full control?
Product pricing and design
Shouldn’t you have full control over your product pricing and design? The right technology will offer you complete flexibility. You should be able to apply differential pricing by distribution model, for example. You should be able to make price changes rapidly, to apply and amend product features and benefits, to evolve product designs to reflect changing customer needs … the list is endless and should not be constrained. Overall, the software you use should enable you to manage your product design in the ways that you want: both for customer engagement and for profit.
Process efficiency and automated decisions
Wouldn’t you like to be able to leverage smart workflow processes, with configurable decision points that automate or create user-driven tasks? For many, these are now considered essential for increased efficiency and service levels with reduced operating costs. Manual processes and the extensive use of spreadsheets to drive activities are still traditional in the insurance market, but they are inefficient and risky. There is an alternative.
Speed-to-market seems to be an overused phrase recently. But that does not diminish the power behind the words – the advantage of being able to react quickly enough to beat the competition to the new opportunities. Retaining and improving market share depends on being able to change in line with the needs of customers who have constantly evolving tastes and expectations. The right technology enables you to implement change quickly through configuration, avoiding the need for long development queues or highly skilled computer programmers.
Of course, technology alone cannot deliver agility and improved speed-to-market. A business must also re-assess its IT testing and deployment processes in areas where such agility is key to business preformance. However, without the enabling technology, how much can the existing processes be improved?
Operational efficiency, market agility, and business profitability
We could go on, but the bottom line is that your products and processes, and the speed with which you can deploy them, are critical to revenue and operational efficiency.
The fact that so many insurers struggle to make rapid changes, or need an army of highly skilled people to deliver the required service levels, is ample proof that there is still a huge opportunity waiting for those that embrace the right technology.
There is an ongoing debate about how to describe software that has the power to manage the business. Is it rating software? Is it a rules engine? Is it something else? It doesn’t matter what you call it, what matters is that you embrace the benefits offered by the best-in-breed.
As stated at the outset, there have been so many articles stressing that the best insurance rating software is a real business differentiator. My conclusion is that we need to keep such articles coming until we see innovation and agility in the market-place. The kind of innovation and agility that proves insurers are finally grasping the opportunities on offer.