North American New Business and Underwriting Systems
Life, Health, and Annuity ABCD Vendor View
Recent economic conditions have had an adverse impact on life insurance application volumes, but there continues to be interest in automating new business and underwriting functions, as insurers strive for straight-through processing (STP) of new business.
Insurers hope that systems that automate new business and underwriting functions will help reduce unit costs and improve margins. Celent believes that these initiatives are necessary to help insurers address growth, service, and distribution mandates, and allow for cost per policy issued reductions.
In the report, North American New Business and Underwriting Systems: Life, Health and Annuity ABCD Vendor View, Celent reviews new business and automated underwriting systems available to insurers in North America. The report profiles 15 automated new business and underwriting systems for life and annuities products with six full vendor profiles, four limited vendor profiles, and five reinsurance solutions.
Today’s new business and underwriting systems collect structured data, triage risk and identify underwriting requirements, fulfill back office processes, and allow for analysis of the resulting data. They provide the potential for insurers to reduce costs by moving some of the traditional back office processes into the front office and to improve profitability by giving insurers insights into the characteristics of applicants for product and pricing refinement.
“In the current sales climate, insurers are looking for ways to improve unit costs. They are achieving results by changing their cost structures and delivery speed through process simplification and automation,” says Karen Monks, Analyst with Celent’s Insurance Group and author of the report. “By implementing an automated new business and underwriting system, insurers are able to reduce costs associated with new business acquisitions. Over time, new business acquisition costs and underwriting time can be lowered. These systems can help free up underwriters’ time to concentrate on more complex cases.”
The report discusses each system’s functionality and highlights trends in the new business and automated underwriting marketplace. Celent analyzes six system providers using its ABCD analysis framework to present a comparative view of the vendor marketplace that visually represents four elements: Advanced technology and technical flexibility, Breadth of functionality, Customer base, and Depth of client services and solutions. Additional information is provided for emerging solutions and reinsurer solutions. System providers included in this report are: Accenture, CSC, Ebix, Reinsurance Group of America (RGA), Resonant Technologies, StoneRiver, FAST Systems, MajescoMastek, STEP Solutions, Tata Consultancy Systems (TCS), Hannover Re, Munich Re, SCOR, and Swiss Re.
This is the second of several reports related to straight-through processing in life insurance. The first in the series was Understanding the Benefits of Electronic Applications and Policy Issue, November 2012.
This 132-page report contains 10 figures and 77 tables.