Life insurers will encounter many challenges in future if they do not undergo digital transformation. Among all, the fundamental challenge is time, i.e., the industry is too slow. For instance, the life insurance policies found in books may have been sold almost 75 years ago, but they are still not paid out. In addition, long-term complexities and unreliable diluted data stored on legacy core systems complicate the technology world for life insurers.

So, to do away with this issue and help life insurers meet the dynamic customer needs, it is essential to modernize policy administration systems (PAS). Implementation of newer technologies in your exiting insurance architecture or installing completely new automated software can enhance the speed-to-market of your life insurance products and render a superior consumer experience. However, for either case, effective policy data migration is obligatory.

So, today we will share how to perform PAS modernization and data migration to accelerate your life insurance business.

What is the importance of PAS modernization and data migration for life insurers?

Though relatively expensive, today’s policy administration systems are pretty flexible, simplifying various core life insurance processes. Also, it is a key to reaching more millennial and Gen-Z policyholders.

Hence, this technology implementation will give your life insurance business a competitive edge and make your company future-ready. Additionally, studies suggest that due to the modernization of policy administration systems and effective data migration, the life insurance industry is anticipated to grow at a CAGR of 5.3% between 2019-2023.

So, let’s explore the benefits of modernizing your life PAS through proper data migration in detail.

Easy product development

Unlike the closed hard-coded architecture of ageing life insurance policy administration systems, modern PAS are rule-based and work on logic. Hence, it becomes effortless to develop innovative policy products or riders and add new features and benefits to the system, facilitating enhanced flexibility and scalability.

Hassle-free billing

In the case of life insurances, a policyholder may not request for claim settlement for years or months. But sending them regular invoices is necessary to foster customer satisfaction and loyalty. Hence, equipped with data processing and analytics capabilities, modernized PAS will facilitate automated invoicing features and support multiple payment modes to give life insurers better control and visibility of the billing operation.

Seamless claims management

In legacy core systems, claims processing is a time-taking and hectic process. Moreover, due to poor and diluted data quality stored in ageing database systems, it becomes often difficult to analyze claims prior to settlement and prevent claim frauds. Thus, life PAS modernization with effective policy data migration connects claims and policy systems to better align with policy clauses and quick claim analysis. This, in turn, detects dubious claims and facilitates easy claim settlements, rendering an enhanced customer experience.

Reduced IT resource expenses

Though the initial investment for life PAS modernization is relatively more, it is a cost-effective and profitable implementation for the long term. A swift and completely modernized policy administration system removes the requirement for repeated additional tech upgrades that are not only costly but also confusing to implement. Besides, integrating a robust data migration capability to your modern PAS can automatically migrate business books without requiring IT resources, thereby cutting substantial IT costs.

How is it done?

The current life insurance market landscape makes it difficult for ageing systems to keep up with the rising demand for intuitive and hyper-personalized customer experiences. Hence, life PAS modernization and seamless policy data migration are necessary to thrive in this changing insurance landscape. But how to do so?

Well, the following is a step-by-step guide to implement PAS modernization for all life insurers out there.

Select the right PAS modernization method

To make your PAS modernization project a success, first, you need to choose a suitable method. Then, you can either buy new software from a reckoned vendor and establish a new system for your life insurance business or integrate modern solutions into your existing legacy system.

If you get your PAS modernization project outsourced, you need not require in-house resources. The third-party vendor will offer you comprehensive technical support, from software integration to life insurance process management, relieving you from any hassle. However, the initial cost of implementation would be higher in this case.

On the contrary, enhancing its capabilities can be an ideal choice if your existing core system and integration architecture are sufficiently mature. It preserves your previous investment and facilitates enhanced scalability to PAS. But this method requires more resources and enhanced support from IT and business leadership.

So, each method has its merits and demerits. But each of them promises to give long-term ROI. Thus, opt for the right PAS modernization solution depending on your requirements.

Perform safe data migration

The optimal data migration process includes exporting and transforming policy data from the source system to the target system. Here, the target system refers to the modern PAS.

This data migration process shares some standard architectural components, including Source System, Source System Extract Engine, Transform Engine, Target System, Load Engine and Reconciliation Solution. Only if the policy data passes through these components effectively, the migration process would be successful without data loss.

However, during the process, perform data migration at the company level, as it makes decommissioning of legacy systems feasible. Also, ensure that you migrate records as quotes instead of live policies. It helps in easy and hassle-free billing for the upcoming cycle.

Thus, data migration adds extra functionalities to your modern policy administration system. Hence, modernize your PAS by fortifying data governance and security through effective data migration.

Final thoughts

In a nutshell, life PAS modernization accompanied by effective data migration will help you revamp the insurance experience for meeting modern customers’ financial goals and milestones. Moreover, with the best solutions, PAS modernization will yield life insurers ample benefits of enhanced business intelligence.