that was the world we all lived in,” says
Frank Petersmark, CIO advocate for X by
2. “There was no thought processes around
integrating a suite of core systems and
making the data easy to access and com-
patible with other systems. It was a world
of best-of-breed and point solutions.”
Fast forward to 2014 and there is
hope for the future.
“The whole idea of a modern system
with an integrated suite of core systems—policy claims, and billing—has
great appeal to people for different
reasons,” says Petersmark.
For starters, today’s systems have the
advantage of modern technology and
they are componentized. “You couldn’t
change the older systems,” says Peters-
mark. “You could hard code things into
the system—and we all did that—but
those changes were there forever and
you had to live with them.”
Today’s systems are more configu-
rable with several components and layers
between data, and that makes the IT
shop a little more flexible, adds Peters-
mark. But underlying all that, insurers
still need something to drive the data.
“The data is getting a lot cleaner in
the new systems we are seeing,” he says.
“There are standard data models being
used and there is more agility. It’s not
perfect, but there is potential to use data
more effectively and get it out of the old
systems, even with other vendors’ tools.
It is starting to feel like there are better
choices and when insurers make those
choices they have some hope that these
Donald Light, director, Americas
property/casualtypPractice for Celent,
believes insurers are appreciative of the
freedom from legacy systems when
making the leap to a modern platform.
He feels the drivers behind making a
substantial investment in a new policy
administration system fall into sev-
eral categories: flexibility, agility, and
a system that is easier and cheaper to
maintain as well as make changes.
From the business perspective, Light
believes insurers want the ability to
change operations and processes more
quickly in response to the competition in
order to gain a competitive advantage.
“With a legacy system, if it meets all
the business needs and allows carriers
to keep a competitive advantage, keep it.
But 49 times out of 50 it doesn’t allow the
insurance companies to do that, which is
why we keep seeing interest in modern
systems,” says Light.
How Much Easier
Patriot is operating on a modern system,
but some issues still remain, explains
Haddad. Entering new data is not a
problem, but the challenges the carrier
faces involve the conversion of data,
which she believes is to be expected.
“It’s a lot easier than running two
platforms parallel,” she says. “When we
took the full plunge on conversion we
knew we were in a better place, but also
in a place where converted data would
take some extra effort to process.”
Patriot has renewals throughout the
year, but like many carriers operating
in the workers’ comp space, January 1
seems to be a big date for renewals.
“We looked at January as a good
opportunity to get over the hump with
converted policies, so we were looking
forward to it,” says Haddad. “We took a
full plunge into a brand new system for
all the areas in the company and con-
verted all our data. We basically bit off
half a house. Now we are making sure we
continue to deal with whatever questions
and comments come our way.”
Some training still needs to be con-
ducted and process and workflow issues
are being refined, but for Haddad the
good news is Patriot is on its platform
for the future.
“Everybody on the business side sees
that we are positioned for the future on
an advanced technological platform and
everyone is looking forward to getting
there,” she says. “That will take us some
more time—two months, five months or
six months—but they know what we are
building on will be spectacular.”
Patriot went with Vikaran Solutions,
a new vendor that Haddad describes as
having a terrific platform, web-based,
with newer technology and architecture
built in. They are working on building
out all lines of business, but workers’
compensation was already built out.
Patriot was their first client.
Did being the first client scare Haddad at all?
“I have to put some of my own
experience in the mix,” she says. “Having
been in the industry for 30 years, I’ve
been through buying systems, building
systems, and converting systems. I know
the constraints when you buy one of the
platforms. There are pros and cons to doing that and to going with a vendor that
has no clients. Part of the differentiator
here is Vikaran was looking to partner
and came through to us as a partner.
They were here with us on site, working
through everything we needed. Their
commitment to this project was huge.”
Insurance companies have people that
work for them a long time, both in IT
and on the business side. Petersmark
believes some of the newer technology
is ahead of people’s ability to accept it,
understand it, and use it effectively.
“We’ve seen cases where clients
are using highly functional and highly
configurable systems and clients seem to
think it is too much,” he says. “They don’t
think their claims people can absorb all
the changes that kind of system brings.
We’ve had to help them plan incremental
implementations of such platforms. The
technology and functionality is already
baked in when someone buys it, it’s a
matter of how to knead some of that out.
It’s quite a change for people.”
There has to be focus on changing
the culture of the company, according to
Petersmark. Otherwise, companies end
up leaving money on the table.
“If it takes five years to fully implement all the functionality, you are not
leveraging the big investment you’ve
made,” he says.