Naperville, IL and Philadelphia, PA – November 24, 2014 - For the past decade, trending consolidation among insurance carriers, coupled with legacy software systems that have reached a breaking point, has created a perfect storm of sorts, lighting a fire under carriers to modernize or replace core systems in order to drive greater efficiency and remove barriers to growth.
Earlier this year, two specialty insurers – Pennsylvania Lumbermens Mutual (PLM) and Indiana Lumbermens Mutual (ILM) – with longtime commitments to covering the property and casualty risks of the wood products and building materials industries across all 50 states, came together to share services and pool reinsurance functions. The new alliance placed the software systems of both companies under a microscope, sparking a search for opportunities to consolidate.
“The three legacy systems we found at ILM following our alliance were reminiscent of the situation at PLM three years ago, when we replaced a hugely-outmoded COBOL-based policy administration system and a manual spreadsheet-based rating process with Quicksolver, from Instec,” said Joseph McGurrin, vice president of information technology at the affiliated companies.
PLM’s standardization on the Quicksolver policy administration system resulted in streamlined workflows and a much more nimble company; so, when PLM entered into the alliance with ILM, Quicksolver was a natural choice to replace the three systems at ILM.
“We saw the reduced cost of maintenance and greater agility we could achieve by consolidating separate legacy systems and standardizing on Quicksolver, and we wanted to do the same for ILM,” said McGurrin.
PLM’s deployment of Quicksolver took just nine months, a far cry from the multi-year implementation common with legacy system replacement. This experience gave the affiliated companies the confidence to move ILM’s book of business to the Instec software at the same time as they were ramping up a new billing system. Both projects were completed on time, and all new and renewal PLM-ILM policies are now issued through the common Quicksolver system.
In an environment where end-to-end enterprise suites predominate, PLM has instead chosen a “best-of-breed” approach, integrating Quicksolver’s rating and policy administration functionality with adjacent systems such as billing and claims. This plug and play approach is making it simpler for PLM and ILM to consolidate their core systems without forcing a costly and lengthy rip and replace project.
“When we were shopping for a new system, we specifically wanted a best-of-breed rating and forms system because rating is the heart of the business – it’s mission critical. We chose Instec for its extensive ISO, NCCI, and state bureau content, for its self-service configuration capabilities, and for its ability to integrate easily with other systems,” said McGurrin.
Instec automatically keeps carriers compliant and up to date with ISO rating and form changes in all 50 states, delivered directly by the Quicksolver system an average of 110 days ahead of the effective date of change. At PLM, this enabled the company to completely eliminate weekly compliance review meetings that tied up two officers, an underwriter, and an IT staff member – a benefit that will now be repeated at ILM.
Integrating rating, quoting, and policy issuance, using Quicksolver, has eliminated data re-keying and cut quote-to-issue time from a week or more to same-day turnaround, for policies that can include up to 1,000 vehicles and 250 locations. This has cut overhead costs and accelerated revenue generation.
“Integrating systems also eliminated over $100,000 in printing and mailing costs because declaration pages and forms can now be produced from a single system. This was not possible with our old process because the output came from three different systems, requiring manual assembly of the documents,” said McGurrin.
When two companies come together, as PLM and ILM have done, expectations are high that efficiencies will be gained through consolidation of systems and transfer of best practices. With PLM and ILM now under common management, running on a single policy administration system will provide a unified view of the companies’ businesses and a state-of-the-art process for managing both companies’ customers.
About Pennsylvania and Indiana Lumbermens Mutual Insurance Companies
Pennsylvania and Indiana Lumbermens Mutual Insurance Companies is a recently affiliated, premier property and casualty insurance provider serving the lumber, woodworking, and building material industries. Both companies have deep roots in the industries they serve, with more than 200 years of combined experience. The affiliation of these two companies in the fall of 2013 has given PLM/ILM the opportunity to expand its reach geographically and to increase its expertise to better serve its customers.
Instec delivers best-of-breed rating and policy administration solutions to P&C commercial insurers, MGAs, MGUs, and the solution providers that serve them. Since 1982, Instec’s solutions have empowered insurers and general agents to get and keep their competitive edge, efficiently create highly specialized insurance products, go to market quickly, and scale with a minimal IT footprint. To learn more, visit www.instec-corp.com.
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