6 Capabilities to Look For in a Modern Life and Annuity Insurance Policy Administration Solution

Insurance policy administration

Estimated reading time: 5 minutes

Managing multiple life and annuity insurance policies is already difficult as it is, even with the help of software. Insurance policies are highly individualized and are often subject to filing and calculation errors as well as malicious activities by bad actors.

In recent years, life insurance innovation has finally come in the form of next-generation artificial intelligence (AI) and machine learning (ML) solutions. New administration solutions employing advanced AI and ML promise to solve most of these longstanding issues while also expanding insurers’ capabilities to tap into new market segments.

Here are just some of the capabilities of current-generation systems you can tick off your checklist when looking for a new policy administration solution for your insurance company:

1. Real-Time Access to Policy Data

Modern insurance management systems can now be hosted reliably on cloud-based systems. This effectively means that payers and policyholders alike can access these from virtually anywhere with a mobile app, without the need to contact colleagues or a customer service agent, respectively. This saves clients and employees potentially tens of thousands of hours a year that would otherwise be spent addressing basic inquiries and requests.

2. Simple Policy Customization

Customization is now a major selling point for many insurance businesses. However, implementing customization, particularly on older on-premise systems can be a challenge. Newer systems are now either mostly or partly built on cloud infrastructure, solving many of these issues and granting insurers new capabilities.

Having a system on the cloud makes it easier for insurance policy developers to easily collaborate on creating new products, irrespective of their geographic location. The time to market for new base policies and other products could be shortened substantially, permitting insurers to quickly pivot to new opportunities.

Additionally, insurers now have the option of allowing policyholders to make changes themselves. This vastly simplifies the customization process and reduces the workload for employees, making policy administration even more efficient.

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3. One System to Support Multiple Businesses

The past several years have seen business consolidation become a trend in the insurance industry. Consolidation is a great way for insurers to enter new markets but it also creates complications because of all the various platforms and different lines of business that have to be managed.

Modern insurance policy management systems are now designed to accommodate a variety of insurance business models, including those used by insurers with multiple lines of business. This allows for better efficiency and data visibility across all of the senior insurance company’s networks, allowing the whole organization to be more agile and responsive.

4. Easy Scalability

Current-generation policy management software solves the perennial issue of optimizing system capacity to the number of current and expected policyholders. The use of cloud infrastructure allows these systems to serve as many customers as needed with minimal added cost and no additional hardware needed. 

The IT expenses associated with system expansion are also reduced, as back-end maintenance is typically handled by the technology provider themselves. Because of the scale available to these providers, the cost of maintaining such systems is extremely competitive, especially when compared with the cost of similar on-premise solutions.

5. Effortless Compliance

Compliance was formerly one of the biggest roadblocks to efficient policy management. The insurance business is subject to an ever-growing list of government and regulator-mandated laws and guidelines, which adds to the complexity of compliance each year.

Thankfully, newer systems are set up to help insurers effortlessly comply with various regulatory requirements, reducing the time to manage policies. Additionally, improved compliance also reduces insurers’ risk exposure to regulatory fines and sanctions, ultimately reducing the cost of providing insurance to customers.

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6. High-Level Technical Support

It’s not just technological systems that have to step up to the challenges of insurance administration. Human systems and their associated support structures have to be brought up to date as well.

Insurance policy administration has been largely digitized for several decades. In those years, it has become clear that the success of all platform transitions is highly reliant on adequate support from vendors, particularly for user training and complex issue resolution. Without adequate technical assistance from technology partners, insurance companies will have the difficult and often impossible task of maximizing a system that they do not fully comprehend.

In other words, insurers looking to update their policy administration should look beyond mere buzzwords and technologies. They have to be sure that they will also have the support they need to make the most of their tech investment. Fortunately, most of the market leaders providing insurance solutions have done much to improve their technical support capabilities. Insurers serious about transforming their business should only consider tech providers who offer sufficient levels of after-sales tech and customer support.

Step up Your Life and Annuity Insurance Policy Administration

Life insurance providers not only need to face perennial issues like fraud and filing errors, but they also have to contend with an ultra-competitive insurance market where major players are currently consolidating. Insurance providers who are due to update their platforms should therefore take care to invest in tech solutions that address these issues.

Through intelligent life and annuity insurance policy administration, insurers should be able to cut down on their running costs and also be better positioned to pursue new markets with fewer risks. Additionally, better AI and ML-powered systems should offer insurance clients a better overall experience. These benefits alone make these updated systems well worth considering.