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January 21 2014 | Karen Furtado

Boston, Massachusetts, January 21, 2014 – Strategy Meets Action (SMA), a leading insurance strategic advisory firm, has just released a new research report, Policy Administration: L&A Plans and Priorities. Results from SMA’s survey of North American life and annuity insurers show definite signs of real progress in transforming from legacy to modern policy administration systems. Over 40% of all L&A insurers are currently involved in either PAS (Policy Administration Systems) vendor selection, planning for a PAS change, or the implementation of a PAS solution. Annuity providers are leading the way with an amazing 46% in vendor selection/planning and another 17% in the process of implementing new systems. L&A insurers are experiencing mixed results, as 40% of insurers are very satisfied with their end state, while 47% are reevaluating their situations.

“Most insurers try to extend the lifespan of their PAS for as long as feasible due to the major investment in resources, time, budget, and the risk involved in the implementation of new systems. Our research confirms that L&A insurers use their PAS for very long periods, with over half (54%) using systems that are more than 20 years old and 76% using systems that are 10 years or more,” confirmed Karen Furtado, SMA Partner and author of the report. “The good news is that there has been an increase in the number of modern systems implemented – another sign that progress is being made. The surge in new systems and planned implementations is due to the fact that insurers must have a flexible and agile policy system to respond to a competitive market with new products and new customer demands.”

This report explores the current state of PAS systems in the industry, investigates buying criteria, and examines the status as well as the successes and challenges insurers are experiencing when implementing a modern PAS solution. Highlights of the study show where the industry currently stands in the PAS buying cycle and outlines expectations for new systems.

“Core systems support the fundamental foundation of the insurance business. Those insurers that have made the investment in modern core systems are seeing results. The flexibility is helping them grow and profit in today’s exceptionally complex and dynamic market environment,” Furtado concludes.

Insurers, IT providers, and media who are interested in learning more about SMA’s policy administration solutions research and advisory services should contact Karen Furtado at kfurtado@strategymeetsaction.com or 978.239.2741.