The State of 2016 COLI BOLI Technology

Andesa recently partnered with leading research firm Novarica to underwrite an insurance industry study to better understand the state of technology in the COLI/BOLI market.  The research report “Business Technology Issues in Corporate-Owned Life Insurance” is available online at https://andesaservices.com/business-technology-issues-corporate-owned-life-insurance-form/

Andesa supported this study to expand its knowledge about the broader COLI/BOLI marketplace and better plan our own systems’ roadmaps.  Our clients already have many ways of providing feedback, including satisfaction surveys, active account management and annual review sessions.  We were interested in gleaning additional understanding from a broader market perspective.

COLI/BOLI is often considered a boutique space in the life insurance market wherein a few carriers offer highly-specialized services utilizing life insurance as an investment vehicle for funding specific types of risks or benefit programs. A corporation or bank might purchase life insurance on certain employees’ lives in order to (a) mitigate the loss of key employees, (b) fund future benefit plan obligations, (c) fund corporate obligations to redeem stock upon death of an owner or (d) to supplement their investment portfolio.

The nature of the COLI/BOLI market demands a high-touch, “concierge-level” of customer service. Significant amount of case-by-case customization is required to correlate to a particular risk mitigation or investment strategy. Technology must deliver robust features for plan analysis, illustration capabilities, enrollment, policy administration, and post-issue maintenance to provide an effective solution. The relationship between highly-specialized producers and organization C-suite executives demands carriers provide technology and service which is flexible, adaptable and efficient.

The research uncovered that a number of carriers are relying on older core systems (the average system age was 19 years in-service, with several carriers operating on systems that are 30+ years old). Distribution functionality is the top technology priority among the surveyed carriers, yet these mature environments prove difficult to improve in response to increasing demands by producers for access and flexibility.  For participating carriers, the key focus of the technology investment appears to be on the improvement/enhancement of distributor-facing functionality. Novarica’s research also cited a number of investment areas as priorities for COLI/BOLI carriers, including:

  • Digitizing processes such as reporting and analytics
  • Improving speed-to-market to accommodate an evolving labor force
  • Enhanced product development
  • Updating diverse and aging systems to reduce risk and improve operational effectiveness

The research proved valuable to Andesa.  It confirmed our understanding of the market and validated our response to challenges facing the industry. Andesa understands the nuances of the COLI/BOLI product complexity and how the support of this market and distribution channel is vastly different than other insurance product lines. A couple of supporting examples:

The integration of our applications (plan administration, new business portal, illustration engine, policy administration engine and reporting applications) provide for a streamlined, straight-through processing experience. Accuracy is improved and illustration results are enhanced as illustrated values come from the administration product calculation engine. As web-based solutions, access to self-service applications further enhances the client service experience between carriers and distribution.

The sophistication of the product, producer and purchaser demand accuracy. When a carrier client places its trust in Andesa, there is an expectation that a a policy must be supported for thirty to fifty years.  Andesa takes that commitment seriously. Andesa’s systems are designed to ensure accurate in-force policy value calculations. We have taken a unique design approach to retroactive processing and recalculations of values, such that our clients are able to report on an as-of date basis.  This design provides flexibility and solves a huge industry administration issue with regards to undo, redo, and corrective processing. Andesa’s clients are able to report as of a particular date or what results would have been if a correction had been made as of that date as well. This same design allows for configuration of the calculation engines while leveraging the surround applications investment, which decreases the cost and increases the speed-to-market for new product launch.

Finally, as a commitment to our clients, the evergreen nature of a cloud-based solution demands frequent enhancements and upgrades to remain current. Andesa’s software-as-a-service (SaaS) approach, with a highly configurable core engine for each of our clients, sets us apart from competitors or internally-developed solutions. Each client is able to take advantage of a core system that is developed and configured to their unique product or plan needs.  However, each client configuration is able to take advantage of all of the interactive, interface, and look-and-feel components of Andesa’s technology framework, all of which are internet-based, as well as direct access to information and collaboration with distribution partners.

Integration and Accessibility. Flexibility.  Modern Systems. Andesa is uniquely positioned with its systems, services and product line experience to ensure our clients can deliver superior value to the market today and into the future.

 
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