Seven Essential Requirements For An Efficient Policy administration system

A policy administration system is designed to make life easier for insurance companies by helping them meet their daily and long term goals through robust functionality and advanced technology. But what are the features that distinguish an efficient and modern system from an outdated cheap administration program?

High Scalability

This was a limitation back in the 60s and continues to be a roadblock even today. When planning to integrate a new policy administration system, one has to foresee events and choose wisely. Having the ability to scale up or down based on actual policy numbers is a very handy advantage that can reap insurance agencies profits in the long run.

Simplicity In Integration

While all systems catering to the insurance industry have a wide range of integration, it should seamlessly combine each and every activity together without appearing too complicated. Everything from the billing system, claim system to the CRM system should be integrated together such that they feed off each other and accentuate the whole administration process.

Easy To Adapt

Systems must not be rigid to changes. As times change, so does business. Hence, if market analysts predict a change on the horizon, the system too should be able to cater to this change through quick adaptation. Reprogramming should never be a hassle.

POS Centric

Today 95 percent of all policies are made online. Therefore, being capable of accepting policies online, through agents and other sources is essential in today’s cut throat competitive world. Hence, having a system that is Point of Sale centric shall provide companies a chance to increase their turnovers through all mediums.

Based On Modern Standards

The use of modern programming languages such as XML is essential in today’s policy administration system so that it maintain its compatibility with technology of today and tomorrow. Meeting current market standards and benchmarks is therefore essential to the survival and perpetuity of a policy agency.

Modular Nature

Being able to adopt different modules based on current situations and having the ability to meet future contingencies through possible modules is a trait of only the best administrative software. Such a system must be primed and ready to go when and wherever required.

Maximum Accessibility

Internet has revolutionized the world and today a system that is not connected to the internet is losing money each second. Hence, having maximum exposure of an insurance administration software through internet, on smart phones, net books and iPads is essential to survive and grow. 

What Are The Functions Covered Under Policy Administration For Insurance

What Are The Functions Covered Under Policy Administration For Insurance

If we only take the United States insurance industry into picture then it is worth $419 billion annually. This magnanimous industry currently employs over 3 million people out of which nearly 50 percent are responsible for carrying out policy administration services. What exactly is this term? And, what are the functions that a policy administrator must perform?

What Does The Term Mean?

Before we look at the actual meaning with regards to Insurance, it would be worthwhile observing the etymology first. Public policy administration was the first kind of administrative process developed in the world where a government would set down policies or regulations and ensure that its citizens abided by it. The same policies in turn would also allow a government to function within a set framework, preventing it from violating rights of its citizens. This is the concept that insurance administration borrows.

Such an administration usually ensures that insurance contracts are documented, plaintiffs are addressed, claims are investigated and checks are performed, all within the legal framework of an insurance company. Basically, everything you see an insurance employee do falls under the vicinage of insurance administration.

The Functions Or Role Of Administration With Regards To Insurance Policies

1.      Rating – In order to price or rate policies a very complicated algorithm is used. This is to ensure that the claim is matched with the risk. Departments charged with performing this aspect of administration must extrapolate and tabulate data about crime rates, fire incidents, and other factors before assigning credit ratings to specific policies. This is what ultimately decides profits for an insurance agency.

2.      Insurance – What is an insurance company if it does not insure something? This basic function too falls under the jurisdiction of administration. By the help of appropriate technology, policies are created and printed such that the wording accurately reflects the terms and conditions of the company. This department is also responsible for filing of documents and archiving them for future reference.

3.      Billing – Consider this administrative duty to be at par with bookkeeping. Unless an insurance company keeps record of its financial transactions, it cannot file profits and tax returns, pay its employees and address claims. Moreover, there are government regulations that must be adhered to when it comes to keeping reserves, maintaining accounts. These things fall under the billing department’s responsibilities.

As one can see, policy administration is a large enough subject on its own. Maybe this is the reason why many agencies have turned towards computer software to manage some or all of their administrative requirements.