Policy Admin Systems – what to do when there’s too much choice
July 29, 2016 Greg Brown
The last five years have seen a huge growth of the policy admin systems (PAS) vendor market, meaning that the choice of systems available to insurers is greater than ever. Our analysis shows that there are over 170 vendors worldwide that provide end to end PAS. In our previous whitepaper report, we gave you a checklist to help start the process of choosing a platform and argued insurers can gain benefits from looking beyond the traditional systems. However, such a wide array of options can sometimes be baffling. In this article I will discuss the benefits and challenges the range of alternatives creates, give you practical steps to making better decisions about the right PAS for you and share three vendor examples show-casing companies that are taking new approaches to meeting client needs.
The paradox of choice…
Surely the proliferation of vendors is good? In theory an increase in the number of systems creates a competitive market that drives down prices and improves functionality and flexibility for clients. Whilst this is true there is a hidden burden: the cost and effort of choosing. Hardly a week goes by when I don’t meet a client who is suffering from ‘FOMO’ – the ‘fear of missing out’ on the perfect PAS that’s just around the corner – or who describes the sinking feeling on discovering a PAS they’ve not heard of. As psychologist Barry Schwartz discusses in his book ‘The Paradox of Choice’, too many options are more likely to create a sense of paralysis and dissatisfaction rather than the freedom and happiness we might expect.
Choice has its benefits…
The good news is that the challenge is not quite as black and white as you’d expect. There is a reason for the increased range of PASs. Over the last 10 years vendors have become more specialist, focusing on excelling in specific areas – e.g. world-class user experience – rather than the more traditional ‘one size fits all’ approach. To us this makes complete sense: no two clients have precisely the same requirements. One might be seeking to build an end to end pure digital player, another needs a platform providing capacity for startups and a third is looking for a tool to automate policy admin for a network of MGAs. In fact, over the last 6 months, every single one of the client vendor selections we’ve been involved in has resulted in a different vendor being chosen.
Practically tackling the ‘Paradox of Choice’
So how do you get the benefit created by the proliferation choice of without being paralyzed by the volume of vendors? In two ways:
Start with a clear definition of your business strategy:
What are you trying to achieve and how does that make your PAS needs different from others? Focus on the business ambition, not the technology. See Chris Sandilands recent blog post on Agile StrategyTM for help with shaping your business strategy.
Use an ‘Agile Procurement’ approach,
as outlined in our previous whitepaper on PAS selection, to enable you quickly to scan the market place, selecting the few vendors that can support your strategy.
Three example vendors taking new approaches to meeting clients needs
If I’ve not done enough in this article to persuade you to look beyond the ‘big 5’ vendors then here are three vendors taking a different approach to policy admin. These vendors have moved beyond a focus on core administration functionality to offer additional USPs that are relevant in a digital age.
Click on the images below for a full case study of each provider.
N.B. these are just three examples of how vendors can meet different business needs. These examples are purely illustrative and do not constitute any form of recommendation from Oxbow Partners.
About Oxbow Partners
At Oxbow Partners we use our ‘agile’ approach to help our clients develop and implement strategies at pace. We provide independent advice to help our clients find the best policy admin system for them. We do this by combining our extensive strategic, commercial and operational knowledge of insurance businesses with deep technical expertise and our database of over 170 policy admin systems. For more information, please contact Greg Brown ([email protected]).