Policy Life Cycle
Systems, processes and procedures are all used by the staff responsible for policy processing. Here, new policy processing includes all functions from new policy data capture, through underwriting and rating to policy issue. Policy maintenance wraps the policy change and endorsement steps and extends to renewal, cancellation, reinstatement etc. Management, statistical and regulatory reporting are components too.
In some cases one major computer application may support a great variety of functions – most of those described. In other cases, company by company, a number of different systems may be integrated into the processing environment. Systems which may be separate include underwriting, rating and reporting. A rating system may include a number of underwriting rules to the extent that there is no other underwriting system. In any case, rating may vary province by province and product by product, and as rates change over time, application of those rates is subject to company policy as well. The life cycle of rates, and application rules, is important. Similarly if there is a separate underwriting system, the objective of straight-through immediate processing depends on the capability of this system and the information it processes and rules it represents. These rules, and the definition of the data it employs, must be maintained and managed in order to meet not only speed of processing objectives, but also corporate profitability and competitive targets.
Reporting of data is frequently a component of policy processing applications. The ability to derive greater value from these reports has spawned data warehouses, data marts, online analytics programs (OLAP) and so on. These are becoming richer in their capability, not only for any kind of slice and dice real-time analysis but also for the audience which can now go beyond corporate internal users, to intermediaries, and in the case of risk managers and group plans, the customer. The timeframe and quality of the data and the quality in conjunction with the richness of the tools enable the ultimate value to be derived.
In front end of the policy management processes are data collection functions – the interfaces to call centres, websites and intermediaries. Sitting beside the policy system is a client and prospect system, which will also serve other systems such as billing, claims and marketing. The policy system needs other data for underwriting purposes, and interfaces to those sources will be present. The claims system needs coverage data from the policy system, and in turn must provide loss information to support policy change and renewal processing. Many of these other systems are described in other subject areas (e.g. Distribution, Claims), but some are referenced in the Policy Management and Administration section, in the news & articles and lists of featured providers.