Pricing of Policy Administration Systems in Europe

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31 December 2008


Zurich, Switzerland 31 December 2008

Insurers looking to compare the functionality and technology provided by various policy administration system vendors can usually gather sufficient information from the vendors themselves, or through intermediaries. However, pricing for these systems is an area that lacks transparency.

In a new report, Pricing of Policy Administration Systems in Europe, Celent discusses four key points that should be addressed by IT vendors and insurers when negotiating replacing a policy administration system: licensing, maintenance, implementation and customisation, and total cost of ownership.

"Offering offshore capabilities does not necessarily mean that rates charged for implementation staff are lower in comparison to the overall market," notes Catherine Stagg-Macey, senior analyst with Celent’s insurance group and co-author of the report.

"There is no one-size-fits all strategy for policy administration system pricing. The key word that most vendors and their potential clients focus on when discussing licensing and project pricing is ‘flexibility,’" adds Nicolas Michellod, senior analyst with Celent’s insurance group and co-author of the report.

This reports provides information about IT vendors’ licensing pricing model preferences, the average annual maintenance fee applied around Europe, and variations in terms of implementation costs, with specific coverage of offshore capabilities offered by certain IT vendors and figures about the first year and proceeding years’ total cost of ownership. In addition, Celent reviews issues surrounding pricing for insurers and summarizes findings linking categories and perceived functionality of PAS on the market. Finally, Celent provides some predictions about price trends in Western and Eastern Europe.

The 24-page report contains 12 figures and four tables. A table of contents is available online.

of Celent's Property/Casualty Insurance and Life/Health Insurance research services can download the report electronically by clicking on the icon to the left. Non-members should contact for more information.