PROPERTY/CASUALTY POLICY ADMINISTRATION SYSTEMS

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1 Authorized Excerpt From PROPERTY/CASUALTY POLICY ADMINISTRATION SYSTEMS A Novarica Market Navigator Report September 2013 CONTENTS PASolutions OneShield Oceanwide PCIS MphasiS-Wyde MaxProcessing Property/Casualty Policy Administration Systems 2013 StoneRiver PowerSuite StoneRiver Policy STAR SpeedBuilder Solartis SimpleSolve PCMS Maple Tech MasjecoMastek TCS Tropics Unirisx Distribution Management Agent Portal Customer Portal Business Intelligence: Reporting Document Management & Workflow/BPM Underwriter Workbench Rating Engine CRM Xuber Accenture Adaptik B-2 USA Camilion Blue Goose Clear Data CodeObjects Comtec Cover-All CSC Exceed CSC POINT IN Core Policy Admin System Document Creation Business Intelligence: Repository Core Claims System Reinsurance Management Billing Specialized Components Disbursements General Ledger DAVID Corp. DRC DecisionMaker DRC GameChanger ebaotech ECCA Echo Ridge Epic-Premier Eurobase Exigen FAST First Internet Focus Tech Guidewire Horizon Related Research 2 Introduction 2 Profile 7 Conclusions 10 About Novarica 11 IWS IDMI ISCS Insurity Insuresoft ISI igo Instec IDP In Motion Innovation GIT Group = Primarily personal = Primarily commercial = Primarily commercial without any live WC clients with some or all WC clients 2013 Novarica, a Division of Novantas, Inc. All Rights Reserved. = Near even mix of personal and commercial SUMMARY This is an excerpt of a Novarica report that provides an overview of the available policy administration systems and suites for US property/casualty insurers. The report contains profiles of each of 54 vendor solutions, summarizing the vendor organization, client base, technology used, differentiators, lines of business supported, deployment options, implementation approaches, upgrades and enhancements, and key functionality. AUTHORS Chad Hersh Managing Director, Insurance chersh@novarica.com Lis Maguda Senior Researcher emaguda@novarica.com

2 RELATED RESEARCH Policy Administration Systems Lessons Learned Avoiding the Pitfalls of Over-Customizing: A Checklist for Policy Admin Systems Projects Insurance IT Transformation Checklist Disclaimer THIS REPORT CONTAINS NOVARICA ANALYST OPINION BASED ON PERSONAL EXPERIENCE, INFORMATION PROVIDED BY THIRD-PARTY RESEARCH SUBJECTS, AND SECONDARY RESEARCH. NOVARICA MAKES NO WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE QUALITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT OF THIS REPORT, OR THE RESULTS TO BE OBTAINED THEREFROM OR ANY SYSTEM OR PROCESS THAT MAY RESULT FROM CUSTOMER S IMPLEMENTATION OF ANY RECOMMENDATIONS NOVARICA MAY PROVIDE. NOVARICA EXPRESSLY DISCLAIMS ANY WARRANTY AS TO THE ADEQUACY, COMPLETENESS OR ACCURACY OF THE INFORMATION CONTAINED IN THIS REPORT. CUSTOMER IS SOLELY RESPONSIBLE FOR ANY BUSINESS DECISIONS IT MAKES TO ACHIEVE ITS INTENDED RESULTS. INTRODUCTION Market Overview Novarica surveys of P/C carrier CIOs, our conversations with carriers and vendors, and third-party research all indicate that carriers continue to aggressively seek to replace their existing policy administration systems or in some cases to add a new system to the mix. The P/C policy administration market continues to flourish for those vendors with in-demand systems and reflects a number of trends (most of which remain unchanged from last year): The need to improve product development speed to pursue new opportunities (e.g., excess and surplus lines, workers comp), or to accommodate market demands (e.g., micro-rating, direct-to-consumer), especially as carriers continue to engage in M&A The need to improve product development flexibility to enter profitable new niches as the commercial market continues to harden and the economy continues to improve A need to drive down costs to improve combined ratios as interest rates remain depressed A need to improve both customer and distributor service to reduce costs while improving market share Page 2 of 11

3 A desire to improve internal workflow in order to support business process changes to support the other drivers discussed and general business process reengineering (again to take advantage of the improving market conditions) A desire to reduce dependence on vendors to maintain or enhance the system, or to make day-to-day changes to rates, underwriting rules, etc., thereby reducing long-term total cost of ownership Increased data accessibility demands in order to better set rates/pricing, reduce fraudulent claims, etc. In addition to simply improving customer and distributor service, another key factor is the desire to attract and retain not just top producers, but also the new generation of producers who simply won t stand for the challenges presented by legacy solutions. This is critical for either attracting captive agents or for increasing wallet share with independent agents. For some carriers, being able to offer policies (or at least quotes) direct to the consumer is another driving factor, including the ability to provide service via mobile devices. Attracting and retaining IT staff and even front- and back-office employees is also increasingly important as today s job seekers increasingly lack the skills or the desire to work on 30+ year old systems. Finally, the direct sellers and other industries have set a high bar for customer expectations of online self-service for quotes, policy changes, claims management, mobile self-service, and much more. This has led to a keeping up with the Joneses push for customer-facing technology in personal lines. On the commercial side, the rise of online self-service across many consumer industries has raised users general expectations, forcing carriers to provide certain online capabilities even for lines of business that just a few years ago seemed safe from such requirements. Inflexible legacy policy administration systems can prevent insurers from being able to take advantage of new opportunities and being able to meet customer and agent expectations. About this Report This report is designed to provide an overview of the current solution provider marketplace for property/casualty policy administration systems, and to assist property/casualty insurers in drawing up their shortlists of potential providers based on vendor market position and offering details. Novarica Market Navigator reports do not provide subjective analysis or render judgment on each vendor s solution. They are based on factual responses to a universal RFI distributed by Novarica and subsequent follow-ups with the vendors to validate and confirm responses. The RFI covers details of organization, technology stack, client base, and key functionality. New for 2013, vendors were asked to complete a significantly more detailed addendum to the RFI, and profiles are subsequently more detailed than in the past, including a summary of key differentiators, lines of business supported, deployment options, implementation approaches, and how upgrades/enhancements are handled. Where available, Novarica s ACE Rankings are also included, as are screenshots of the vendor products. Page 3 of 11

4 Novarica Market Navigator Graphic The Novarica Market Navigator Graphic is designed to provide an overview of the vendors in a particular market space, the relative size of client counts of those vendors' solutions, and the focus of each solution. In the case of P/C Policy Administration, this entails whether the solution has live clients on personal, commercial, and/or workers comp products. It is important to recognize that systems that only have customers on personal, commercial, or workers comp may support one or more of the other segments. This information is provided in the profiles of each solution. The graphic conveys the size of the client base with the relative size of the solution's bubble: the larger the bubble, the larger the client base. Solution focus is indicated by the color of the bubble. The Novarica Core Systems Map that sits behind the bubbles reflects the core focus of the solutions profiled policy administration in dark blue, and additional focus areas (that some but not all of the solutions address) in light blue. Note that bubbles are placed around the center in alphabetical order; no subjective judgment is implied or intended. Page 4 of 11

5 Figure 1: Property/Casualty Policy Administration Systems 2013 Property/Casualty Policy Administration Systems 2013 Tropics TCS StoneRiver PowerSuite StoneRiver Policy STAR SpeedBuilder Solartis SimpleSolve Unirisx Xuber Accenture Adaptik B-2 USA Camilion Blue Goose Clear Data CodeObjects Comtec Cover-All CSC Exceed CSC POINT IN PCMS DAVID Corp. PCIS Business Intelligence: Reporting Business Intelligence: Repository DRC DecisionMaker PASolutions OneShield Oceanwide MphasiS-Wyde MaxProcessing Distribution Document Management & Workflow/BPM Management Underwriter Core Claims Workbench System Agent Portal Rating Core Policy Reinsurance Engine Admin System Management Customer CRM Billing Portal Document Creation Specialized Components Disbursements General Ledger DRC GameChanger ebaotech ECCA Echo Ridge Epic-Premier Eurobase Exigen FAST First Internet Maple Tech Focus Tech Guidewire MasjecoMastek Horizon IWS ISCS Insurity Insuresoft ISI igo Instec IDP In Motion Innovation GIT Group IDMI = Primarily personal = Primarily commercial without any live WC clients = Primarily commercial with some or all WC clients 2013 Novarica, a Division of Novantas, Inc. All Rights Reserved. = Near even mix of personal and commercial Page 5 of 11

6 ABOUT THE PROFILES We are introducing a new feature in this year s report: a Vendor At-A- Glance graphic and quick reference table outlining the key functionalities and lines of business for each vendor s policy administration system. Vendor At-A-Glance An adapted version of our standard Novarica Core Systems Map provides a color-coded view for each application based on whether a functionality is included as part of the system, and if so whether it is modular, integral, or standalone. Launched /Re-architected Core Technology 1996 / 2008 Java For example, the sample diagram at the upper right of this page indicates that core policy administration, auto requirements gathering, a rating engine, and a product development workbench are included and are integral (i.e., a required part of the system). An underwriter workbench, commissions management, an agent portal, and a customer portal are modular. Claims, billing, and disbursements are available as standalone modules. CRM, reporting and analytics, and reinsurance management are not included. Total US Clients 12 Publicly Announced Clients Carrier 1, Carrier 2 Major Functions Agent Portal Commission Mgmt Auto Reqts Gathering Prod Devel Wkbench Billing Rating Engine Claims Customer Portal Disbursements Underwriter Wkbench Reinsurance Key Personal Lines Products (* no live client on product) Personal Auto Dwelling Fire Homeowners Boat Owners Personal Umbrella Other Personal Lines Key Commercial Lines Products (* no live client on product) Commercial Property Professional Liability General Liability Commercial Package BOP Specialty Commercial Crime Workers Comp As part of the Vendor At-A-Glance Commercial Auto Surety section, the system launch date, core Inland Marine Other Commercial Lines technology, US client counts, including up to 2 publicly announced clients (limited for space and consistency purposes), and major functions are provided. In addition, the key commercial and key personal lines products sections list the key products currently live or being implemented on the solution. Asterisks identify lines of business the application is designed to support but that no client is live with at a carrier. Clients may be implementing lines with asterisks, however, or lines may be live outside the US. For complete details about any solution, please be sure to read the entire profile, which includes additional information and explanation. Page 6 of 11

7 ISCS Company. ISCS, Inc. is based in San Jose, CA with approximately 150 employees. Their annual revenue for FY2012 is $20 million to $50 million. ISCS was founded in 1994 ISCS SurePower Innovation At-A-Glance Solution. ISCS s policy administration solution, SurePower Innovation, was launched in 1994 and last rearchitected in It is fully Webbased and J2EE compliant, with configurable business rules and rolebased security. SurePower provides agent and consumer portals, document management, ceded reinsurance (both treaty and facultative), workflow, and rules. It also includes insurance accounting, commissions management, and payables, though it does not provide a general ledger. Dashboarding and reporting is available. ISO support is available via an interface to ISO Rating Service. Configuration of insurance products, screens, workflows, and rules is managed via the provided configuration tool. Launched 1994 / 2004 /Re-architected Core Technology Java Total US Clients 19 Publicly Announced Clients Cornerstone National Insurance, Armed Forces Insurance Major Functions Agent Portal Customer Portal Auto Reqts Gathering Disbursements Billing Prod Devel Wkbench Claims Rating Engine Commissions Mgmt Reporting/Analytics CRM Underwriter Wkbench Reinsurance Key Personal Lines Products (* no live client on product) Personal Auto Homeowners Personal Umbrella Dwelling Fire Other Personal Lines Boat Owners Functionality. SurePower Innovation Key Commercial Lines Products (* no live client on product) includes all functionality surveyed by Commercial Property General Liability Novarica. Automated renewals, a BOP Commercial Crime product development workbench, a Commercial Auto Inland Marine service endorsements workbench, and an underwriter workbench are all integral to the system. The agent Professional Liability Specialty Surety Commercial Package Workers Comp Other Commercial Lines portal, automated requirements gathering, billing, claims, commissions management, CRM, a customer portal, disbursements, the rating engine, and reporting and analytics are all modular components of the system. The agent portal includes e-applications. Key differentiators. ISCS notes that SurePower Innovation the user interfaces for customers, agents/third parties, and internal users are secure, real-time extensions of the same system. In addition, ISCS points out the breadth of functionality and consequent benefits of enterprise Page 7 of 11

8 workflows and shared, real-time information. They also highlight the SOA architecture and use of standards that enable integration with third-party solutions. Technology. SurePower Innovation is browser-based for all functions. The core solution is written in Java and resides within a scalable, load-balanced Windows or Linux server environment. Several databases (e.g. Microsoft SQL Server, Oracle, and MySQL) are supported. ISCS did not report on any lab scalability testing. They also did not report on any upcoming technical architecture plans for the system. ACORD XML is supported. The latest release has a Web 2.0 API that supports both mobile and HTML5 development technologies. Source code is provided with the license of the system. ISCS notes that clients do not generally require any changes to the core code. Partnerships. ISCS works with a wide variety of third-party data providers including Google, ISO, LexisNexis, MSB, Perr&Knight, RiskMeter, Service Objects, and SofTech. Client base. ISCS reports that there are 18 US insurers live on SurePower Innovation, all with annual premium under $1 billon. There are also 3 MGAs live on the solution. 95% of clients are on the latest release, and 5% are on versions that are more than 3 years old. Publicly announced clients include Arrowhead General Insurance Agency, Armed Forces Insurance, Auto Club Insurance Company of Florida, CEM Insurance Company, Civil Service Employees Insurance Company, Cornerstone National Insurance, First Insurance Company of Hawaii, Madison Mutual Insurance Company, Mississippi, Windstorm Underwriting Association, Oklahoma Farm Bureau Mutual Insurance Company, Southern Pioneer Property & Casualty Insurance Company, Tower Hill Insurance Group, ULLICO, Union Mutual of Vermont Companies, and Zenith AgriBusiness. Lines of business. Clients are live on the solution in between 2 and 24 US states for all major lines of personal and commercial P/C business except E&O/D&O, which is supported but has no clients live. This includes personal auto, homeowners, personal umbrella, dwelling fire, boat owners, personal package, personal liability, commercial property, general liability, BOP, commercial crime, commercial auto, inland marine, professional liability, commercial package, specialty, workers comp, surety, and commercial glass. Support. SurePower Innovation is supported by 150 employees, including 90 in customer-facing roles. Support staff averages 6 years of experience. Support staff are dedicated to a specific client and based in San Jose, CA. A user conference is available. Deployment options. In addition to the on-premise model, ISCS offers a complete outsourcing service via a hosted or SaaS model. Implementation. ISCS uses an agile implementation methodology that includes the following phases: discovery, blueprint and configure, operational readiness testing, deploy, and transition to support. Each phase consists of specific activities and deliverables necessary to implement in either an ISCS-hosted or customer-maintained facility. ISCS reports that SurePower Innovation can be ready for initial go-live in 9 months or less and fully rolled out in an additional 18 months or less. Resources from the customer and vendor Page 8 of 11

9 include project managers, business analysts, subject matter experts, implementation engineers, and IT staff. System upgrades/enhancements. ISCS employs an agile project management methodology, scrum, for R&D projects. Major features under development include producer management improvements, document management enhancements, a new API framework, e-signature capabilities, cloud-based collaboration, enhanced tools for product modeling, enhancements to workers comp capabilities, and mobile applications. Features to include in upgrades originate from the SurePower Innovation User Group Conference, the online SurePower Innovation ideas portal, and from feedback and customizations developed through ISCS customer support program and professional services organization. R&D development is funded by ISCS. Pricing. ISCS reports that average implementation cost is $1,000,000-$2,500,000. Page 9 of 11

10 CONCLUSIONS Insurers have a rich vendor market to select from when considering providers of policy administration solutions. We recommend that insurers who are looking at these systems narrow the overall market to a short-list of three or four by focusing on four main areas: staff, organization, functionality, and technology, easily remembered by the acronym SOFT. Staff o o o o Does the vendor s staff have the right skills are experience? How well are they likely to understand your needs? What resources are available for implementation and support? What assurances will you have that the staff you meet during the sales process will really be the staff that you work with? Organization o How stable is the organization? o Is it big enough for your company to do business with? o Who are their other clients? o How much of a role do clients have in product development? Functionality o Does the solution support the lines of business, states, and high-level functionality that you need? o Which functions are actually live at reference clients? Technology o Is the solution s technical architecture compatible with your enterprise standards (or can you build your enterprise standards around the solution s technical architecture)? o Does your IT staff have the skills to support it? Using a handful of questions in each of these categories, insurers should be able to narrow their range of potential suppliers to a handful of candidates. This approach is also much faster and more effective than distributing a large RFP, which can be avoided altogether or saved for the final one or two potential suppliers after all the other evaluations have been completed. Page 10 of 11

11 ABOUT NOVARICA Novarica provides information, insights, and perspective on markets, operations, and technology to financial services and insurance executives. The company delivers its service through published research, retained advisory services, and project-based consulting. Novarica s research includes market and trend analyses, best practices research, case studies, and independent analyses of insurance software vendors. Novarica draws its knowledge from the personal experience of its principals, the ongoing information gathering initiatives of dedicated research staff, and regular communication with insurer executives through informal networks and through the Novarica Insurance Technology Research Council. The Novarica Insurance Technology Research Council is a knowledge-sharing and peer-networking community made up of insurer technology executives. As of early 2013, the council had over 325 members from more than 300 different insurers ranging from the largest to the smallest, across life/annuity/health and property/casualty. Members are invited to participate in Novarica's research projects as well as exclusive events and online communities. As a moderated (rather than self-organizing) group, the Research Council offers an opportunity to participate in knowledge sharing without disclosing company-specific information. All survey responses and inquiries to other group members are managed by Novarica and kept confidential. Novarica s business depends on our reputation for protecting confidential information from insurers, and the firm takes this responsibility seriously. For more information, see Authors Chad Hersh is a managing director in the insurance practice at Novarica. For the past nine years, he has been the primary researcher and author of the market leading reports on insurance core systems, and is a widely recognized expert on the topic who has presented at numerous conferences and conducted numerous vendor selection projects for US and international insurers. He joined Novarica from analyst firm Celent, where he spent five years after serving as an e-business director and IT strategist at AIG American General. He holds a BA in Economics and an MS in Accounting with a MIS concentration from Rice University, where he has also taught consulting and e-business. He can be reached directly at chersh@novarica.com. Elisabeth Maguda is a senior researcher at Novarica and Series Editor of the Novarica Market Navigator reports. She focuses on insurance technology vendor research and consulting engagements. Prior to joining the company, Lis worked in multiple capacities at Harvard University, most recently as a Financial Assistant for the Interfaculty Initiatives in the Office of the Provost. She holds a B.A. cum laude in English from Harvard University. She can be reached directly at emaguda@novarica.com. Page 11 of 11