Jeff Haner here. It’s been fascinating for us to watch the surge in activity around policy administration solutions. As we talk with Gartner clients, I’ve been surprised at how many are, quite simply, embarrassed about the amount of time it is taking to implement their new policy administration solutions. There seems to be a common misconception, perhaps fed by marketing claims or experience with simpler systems, that the move to a new policy administration system can be finished in months, or even weeks. While short implementations can be accomplished under certain circumstances, based on the trends that Gartner sees, most insurers of any size that are moving off legacy systems will be looking at about a year to complete their first deployment, and at least another year or two to fully migrate to their new system. Longer timeframes are not uncommon.
When insurance IT leaders share the lessons they’ve learned from these experiences, we frequently hear two themes: the importance of business requirements, and the negative impact of customization. In a recent research note where we analyzed key policy administration requirementswe we came to the conclusion that those insurers who invested in documenting their business requirements in detail beforehand had fewer issues and were able to deploy faster. In another note we found that nsurers who succeeded in selecting systems that were a good match for their needs were able to rely more on out-of-the-box functionality and minimize time needed for customization. They also experienced fewer maintenance issues with subsequent upgrades.
The implementation of a new policy administration system is a very significant, difficult undertaking. If you’re in the market for a new policy administration solution, be prepared by understanding your requirements well, select a system that is a good fit for your needs, and be sure to set expectations within your organization that change of this magnitude is not easy.