IDC Financial Insights Evaluates Policy Administration System Vendors for Global Insurers in New IDC MarketScape
Core replacement cycles are brewing and global insurers will spend US$8.2 billion on software and IT services for policy administration in 2015
Singapore and Hong Kong, May 6, 2015 – IDC Financial Insights announced today the availability of a new IDC MarketScape report, “IDC MarketScape: Worldwide Policy Administration Systems Vendor Assessment 2015”, (Document #AP251041), which evaluates the capabilities and business strategies of 10 vendors offering policy administration systems (PAS) to IT buyers in the global insurance arena. The vendors featured in this report are Accenture, CSC, EXL Service, Fadata, Guidewire Software, Majesco, Oracle, Sapiens International, StoneRiver and SunGard.
This document provides a vendor-agnostic, informed investment guidance for insurers’ technology offices and their line-of-business buyers seeking to invest or replace their PAS platforms, while at the same time offering these specialist technology organizations further exposure to a wider insurance market. Evaluation is based on a comprehensive framework and a set of parameters IDC Financial Insights expect to be most conducive for providing highly rated PAS platforms, together with the inclusion of buyers’ perception of overall value delivered by these vendor solutions.
Insurers oftentimes find themselves constrained by archaic and inflexible policy administration systems as they strategize to optimize client acquisition and retention, create new or modify existing products, enhance business processes and claims management efficiencies, react quickly to evolving market opportunities and simply fuel future growth. Consequently, core replacement cycles are brewing and IDC Financial Insights projects the global insurance sector spending US$8.2 billion on software and IT services for policy administration in 2015, with this figure expanding on a three-year compound annual growth rate (CAGR) of 4.6% through to 2018.
The specific areas currently driving investments within the policy administration arena include rating and quoting (especially to enable online channels), coverage and issuance of policy, policy and contract maintenance, billing and premium invoicing, as well as premium renewals. A shift in consumer preference towards a digital mode of interaction is also encouraging insurers to invest on platforms that can support omni-channel delivery services.
According to Li-May Chew, associate research director for IDC Financial Insights, “About 30% of projects keep within budgetary, time and scope requirements, and a meager 33% of these eventually realize complete business benefits. It is thus critical that insurers pick their technology partners wisely. Our MarketScape vendor assessment document offers guidance on the leading PAS vendors, and how these providers can fulfil insurers’ business goals and technology expectations.”
Positive trends observed across most of these vendors include aggressive investments for:
- Upgrading features and functions
- Raising deployment model flexibility and configurability
- Provisioning integrated PAS software suites supporting out-of-the-box processing for several insurance lines
- Genuine efforts to begin offering next generation technology solutions and services around mobile, Big Data, cloud and social
- Incorporating customer feedback into future functional enhancements and product direction, and
- Aiming to undertake strategic acquisitions to enhance insurance capabilities or forge global partner alliances to ensure adequate post-implementation support
Data from this report indicates that challenges are more organization-specific, though a few similar issues did surface. These pertain to:
- A few administration systems running solutions on COBOL programming language more associated with legacy applications
- Some providers focusing too heavily on a niche area (e.g. specific customer types, or geographical jurisdictions with a couple being entirely U.S.-centric)
- Confusion or distractions from management reshuffling or (what appears to be too) frequent changes in corporate strategy and direction
- Resource constraint for smaller-tiered specialist vendors that are expanding aggressively and unable to keep up with support services
- Perennial comment from customers that pricing (for initial installation and customization, and subsequent maintenance and support) could always be more attractive
IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants and end users. Market weightings are based on user interviews, buyer surveys and the input of a review board of IDC experts in each market. IDC analysts base individual vendor scores, and ultimately vendor positions within the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information and end-user experiences in an effort to provide an accurate and consistent assessment of each vendor’s characteristics, behavior and capability.
Reports are available to qualified members of the media. For further information about this report or to arrange a one-on-one briefing with Li-May Chew, please contact:
Sales and Marketing Director
Tel No: +65 6829 7522
About IDC MarketScapes
IDC MarketScape vendor analysis model is designed to provide an overview of the competitive fitness of IT, telecommunications, or industry-specific suppliers in a given market. The research methodology utilizes a rigorous scoring methodology based on both qualitative and quantitative criteria that results in a single graphical illustration of each vendor’s position within a given market. IDC MarketScape provides a clear framework in which the product and service offerings, capabilities and strategies, and current and future market success factors of IT, telecommunications, or industry-specific vendors can be meaningfully compared. The framework also provides technology buyers with a transparent foundation to allow companies to independently compare the strengths and weaknesses of current and prospective vendors.
About IDC Financial Insights
IDC Financial Insights assists financial service businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the banking, insurance, and securities and investments industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc.com/financial, email email@example.com, or call 508-620-5533. Visit the IDC Financial Insights Community at http://idc-community.com/financial.