Celent has some advice to share with any insurer seeking a new core claim system: Begin the process by looking inward. In its new report titled “Core Claims Systems Vendors 2008,” the Boston-based financial research and consulting firm acknowledges that there is no single best claim solution for all insurers. Rather, there are a number of viable solutions for an insurer with almost any set of requirements.
“Every insurer has its own unique mix of lines of business, geography, staff capabilities, business objectives, and financial resources,” said Donald Light, senior analyst with Celent’s insurance practice and author of the report. “Some vendors are a better fit for an insurance company with a large IT group that is deeply proficient with the most modern platforms and tools. Other vendors are a better fit for an insurance company whose IT group is small and wants vendors to maintain and support their applications.”
Since Celent published its first claim vendor report in 2006, insurers have continued to replace legacy claim systems at a substantial pace.
“In the past two years, the 21 vendors initially profiled have sold more than 100 core claim systems,” Light said. “In the third quarter of 2008, more than 50 insurers are implementing new systems from this report’s profile vendors.”
According to Celent, about three-quarters of the profiled vendors have issued a major new release by upgrading technology platforms, broadening the range of functionalities, or both. Thus, an insurer pondering the purchase of a system today has not only a larger pool of options from which to choose but also stronger, more attractive ones.
The 96-page report provides a detailed overview of 21 core claim systems offered by 19 vendors. Included is a discussion about how replacing a legacy claim system with a modern one provides benefits that align with three key corporate strategies: growth, efficiency, and underwriting success.
“Essentially, all vendors have made a major investment in enabling their solutions to work in an insurer’s service-oriented-architecture environment,” Light added. “Most solutions have also made great strides in usability and personalization — with benefits for new and experienced adjusters.”
In addition to providing information pertaining to how insurers can successfully plan for organizational change and individual development, Celent recommends that vendors differentiate themselves by focusing on improving usability, making implementation faster and less expensive, and documenting value propositions.