Modularity in Policy Software Platforms
Many policy software platforms serve as a system of record for managing your book of business and provide core functionality such as quoting and application flows, rating and underwriting logic, policy lifecycle management, forms and document generation, and data and carrier reporting. Many others, though, work best alongside an existing system of record in a modular way. (Still others can be used either way: as a system or record or alongside one.) Let's explore the use cases and advantages of this kind of modularity in policy software platforms:
Use Cases
Speed to Market
One of the key use cases for modular policy software platforms is the need for speed to market. Many MGAs and carriers find their existing legacy systems to be slow in adapting to change. By using a separate policy software platform for rating and distribution, you can easily and quickly make changes in a low-code or no-code environment, enabling faster product launches.
New Product Lines
When launching a new insurance program or introducing a new product, your current system of record may not be suitable or fast enough to support the project. Using another policy software platform alongside your existing system allows you to test the viability of the new product without the need to extensively modify your current system.
Product Libraries and Bureau Integrations
Some policy software vendors offer product libraries that provide pre-built product logic, including rates, forms, and rules (e.g. InsureMO). Leveraging such platforms can accelerate the process of creating and launching new products. Additionally, certain vendors provide easy integrations with bureaus like ISO or NCCI, reducing the workload associated with managing insurance products.
Workflow Orchestration and Integrations
Integrations can often be a bottleneck in insurance systems, causing slow and costly projects. Modular policy software platforms that offer both product logic and seamless integrations can empower you to experiment, iterate quickly, and meet the evolving needs of insureds. This enables greater flexibility and reduces the risk associated with making changes.
An Easy and Modern Front End
Sometimes, what you need is a visually appealing front end without the need to build it from scratch. No-code policy software platforms can provide elegant front ends with minimal effort and development resources. This is particularly beneficial if you work with agents and are transitioning from paper applications. By using a front end designed specifically for insurance, you can streamline the application process and avoid the need to build extensive insurance logic into a generic cross-vertical front end.
Migrating to a New System of Record
During a migration from one system of record to another, breaking the process into modular chunks can be helpful. By moving rating, pricing, and quoting to a separate platform, and then workflow orchestration and integrations, you can gradually transition to the new system of record while maintaining continuity in other areas. This approach provides flexibility and reduces the complexity of migrating all functions at once.
Multiple Systems of Record
In some cases, an organization may have multiple systems of record. This can be due to new product lines added over time (see New Product Lines above) or mergers and acquisitions. Managing multiple systems of record can be challenging. However, by consolidating product logic within a central platform, you can simplify product management across multiple systems, reducing duplication and improving efficiency.
This approach can be particularly attractive with a vendor that offers product management features like an insurance product library or bureau integrations.
Avoiding Vendor Lock-In
Adopting a modular pattern from the outset allows you to avoid vendor lock-in and keep your options open for the future. Modular policy software platforms typically offer modern APIs and their own front ends, making it easier to transition to a new system of record if needed. This flexibility ensures that you can adapt and evolve your technology stack without significant disruptions.
Where Does The Product Logic Live
When using a separate policy software platform alongside a system of record, all the product logic resides in the modular platform. The hand-offs between the platforms occur at different stages:
- The modular platform handles the sales funnel, including quoting and application flows. This is often a strength of these platforms: They make it very easy to update your UX flows.
- Once a purchase is made, the platform sends the data to the system of record via a webhook. The system of record then takes over as the central repository of policy data.
- For endorsements or renewals, your customer service rep manages the process within the system of record. However, the system of record relies on the modular platform to apply the appropriate rules, rates, and forms for the product via API.
This list isn't prescriptive. For example it's just as common to handle events like endorsements and renewals within the modular platform as well. The critical point is that the product logic lives in just one place, simplifying maintenance and reducing duplication. This approach allows you to leverage the strengths of each platform and optimize your overall workflow.
Configuring the Integrations
Configuring webhooks and APIs for the integration between a separate policy software platform and a system of record can be done in several ways:
- Pre-built: Some platforms already have pre-configured connections for popular system-of-record solutions.
- Configurable: Platforms provide configuration options to set up the integration according to your specific needs. This can range from low-code to no-code solutions.
- Managed: Platform vendors offer assistance in configuring the connections between the platforms.
- Middleware: In cases where a platform has established webhook and API specifications, you (or a systems integrator) can develop lightweight middleware to facilitate communication between the platforms.
The four strategies mentioned above may overlap. For example, if a pre-built connector is not available (solution 1), the platform team may build one for you (solution 3), making it pre-built for future users (1). Additionally, configurable platforms (2) or those using middleware (4) often provide initial set-up support (similar to solution 3).
To get detailed instructions on how to work with specific vendors and their integration options, refer to the individual product pages or documentation provided by each vendor.
By embracing modularity in policy software platforms, you can unlock flexibility, accelerate innovation, and adapt to changing business needs more effectively.