The fear of expensive, time-consuming conversions has kept many life insurance and annuity carriers from leveraging modern policy administration technology. Too often, inefficient software and risky, unsupported hardware remain in production solely because the potential cost of change is deemed too high.
Fortunately, it is possible for carriers of all sizes to sunset their legacy systems in favor of a best-in-class policy administration solution – with minimal conversion pain. Just make sure you consider these points before issuing an RFI or RFP to policy admin (or conversion solution) providers.
1. Is the conversion process fully integrated?
Conversion to a new life insurance policy administration system traditionally meant tapping a third-party vendor – in addition to the carrier and the PAS vendor – to ingest policy data, then re-map it to the policy admin solution’s specifications. This is problematic for a number of reasons, most notably due to the expense and complexity inherent to adding another vendor to the process.
Instead, it is far more effective for conversions to be managed by the same team of developers responsible for the policy administration solution. This reduces the chance of missed connections or poor requirements management creating inefficiency or costly mistakes.
2. How will policy data be validated?
Any conversion project should include validation processes dictated by the specific requirements of the carrier. Whether it’s custom test feeds or policy-by-policy “true-up,” the conversion/PAS vendor should be able to ensure that present and historical data is absolutely accurate.
3. What form of legacy policy data can be used?
Beware of conversion or policy administration solutions that strictly adhere to a single format for legacy policy data. It should be possible to utilize any format in a conversion process, including spreadsheets, database feeds, text files and more.
4. How flexible is the conversion process?
Like data formats, carrier budgets, internal resources and staffing constraints can vary widely. A leading conversion/policy administration vendor should offer a number of different options for completing the process, from handling the entire process to accepting pre-mapped data, or anything in between.
5. What about historical policy data?
Carriers should have the option to perform conversions with full historical data, or data from any specific point in time. This allows for cost-effective backups of any and all policy data necessary for regulatory compliance or future reference.