How is Buying a System Like Filing Your Taxes? Tim Slevin, Sales Coordinator | Apr 23, 2019

Insurance Technology Systems

“Taxes” and “insurance” – two words that make people cringe when they think about them. But it doesn’t have to be that way. Working with industry experts that use the proper tools and policy administration systems can make dealing with unsettling things, like taxes and insurance, a much less worrisome.

As I was sitting in my accountant’s office a few weeks back, going over my 2018 taxes, it struck me that what was most important was that my return was filed safely, promptly, and – most importantly – accurately. Was I concerned if he was using a fancy portal with all sorts of graphs, charts, and analytics? Not a bit. What I really cared about was that when he was done entering my information, it was done properly so that I would not receive that dreaded audit letter in the mail. What I really valued was his experience and expertise.

The same can be said for insurance. When I sit down with my insurance agent after purchasing a new car or home, what is most important is that my assets are insured properly. In the unfortunate event I need to file a claim, the most important thing to me will be making sure I am covered and ultimately made whole again. Will I be concerned with how fancy the interface or portal they used to insure me was? Nope, not at all.

We are constantly bombarded with commercials from tax services and insurance companies that boast about flashy online tools that supposedly make them superior to the rest of the industry. What I would ask these companies is whether these tools will protect me in the event of an audit or claim? Will they be there to represent me if the IRS audits my return, or walk me through the claims process if I experience a loss? Will these tools make sure I have the proper level of coverage so that I am protected? These are the most important questions you should ask yourself when considering giving these companies your business.

Am I suggesting that the customer experience insurers provide is irrelevant? Absolutely not. At a time when competition is high, the experience you provide new and renewing customers may be your best weapon. What I am saying is that presentation is only half the battle. You need to back up your presentation “sizzle” with proof you have the experience and expertise to warrant your customers’ trust.

Now consider a similar scenario. Except, in this case, instead of buying insurance, you are shopping for a new insurance policy administration system. Insurance carriers and MGAs should approach this no differently than the person filing taxes or insuring an asset. You should look for a software vendor with experience and expertise that engender your trust, and the ability to deliver on the core fundamentals that will enable you to grow your business.

Am I discounting the latest technologies that are making all the headlines – features like artificial intelligence, predictive analytics, and microservices? Again, no. These all have their place, and you would be unwise to ignore their potential contribution to your business. But if you are shopping for a policy administration system, don’t add these to your checklist simply because they are the latest “shiny new objects”.

What, then, should be on your checklist? If you are a carrier or MGA targeting the admitted commercial P&C insurance market, especially if you are focusing on programs, consider these capabilities:

  • A content library. In today’s market, time is of the essence. So, why build a product or program from scratch? Instead, start with a base of bureau content and add your customizations to rates, rules, and forms. You want to be renewing or quoting in weeks, not years.
  • Low cost of entry. If you are migrating a modest book of business, your system shouldn’t cost more than the value of your book. If you’re launching a new product or program, there’s an element of market risk. In either case, you need a system that minimizes your up-front investment.
  • A track record. Talk to current customers with a similar profile to yours. Were they happy with the time it took to generate business value from their policy adminstration systems? Return on investment can be tricky to measure. Instead, consider focusing on “time-to-value”.
  • Insurance expertise. Your insurance software vendor should understand your business as well as they understand their technology. Their experience should enable them to recommend best practices that will save you time and money. This is especially important in the admitted sector. Does the vendor have a process to keep you (and your customizations) compliant when bureau rates, rules, or forms change?

Many of the leading-edge insurance technologies that are making the news will deliver great value down the line. But if you’re in the market for a system today, consider, first, the system’s ability to meet your most fundamental needs – to generate value in the shortest possible time and adapt as your business changes. Your company will thank you for it, and your customers will, too.

Tim Slevin began his career in the insurance industry in 2003. Starting as a Claims Adjuster at Commerce Insurance, Tim moved on to work as a Commercial Lines Account Manager for Eastern Insurance, one of the largest retail insurance agents in the state of Massachusetts. With his deep domain expertise, Tim joined OneShield Inc as a Business Analyst in 2009 and within one year was promoted to Pre-Sales Engineer. In 2017 Tim joined Instec as a Sales Executive, with the goal of helping insurers solve challenging operational issues with tailored solutions. As a Sales Executive, Tim serves as a key partner, guiding prospective clients through the sales engagement and initial implementation processes.