Tuesday Feb 10, 2015

Transform Your Enterprise through Core Systems Consolidation

The life insurance industry is facing decreasing revenues. Written premiums have been flat or even decreasing since 2012, and coupled with interest rates that have been falling, we are now at historic lows – making it harder for life carriers to grow the business. As regulations, industry, competitors, and consumer needs change, life insurance and annuity carriers must continue to adapt their product portfolios and introduce new products faster to market to gain competitive advantage and sustain growth.

Dave Shively, Oracle's Senior Director of Life and Annuity Policy Administration, discusses how insurers can approach consolidation of core systems:

Unfortunately for many carriers, their aging, legacy policy administration systems prevent or inhibit rapid changes to products or processes. Many carriers are struggling with policy administration systems that are over 30 years old. These aging systems impede carriers from capitalizing on growth opportunities or reacting to competitive pressures. These systems also require significant maintenance, thus reducing profits. However, insurers can overcome these challenges by consolidating distributed and aging policy administration systems into a modern, flexible system that can improve business agility.

There are many benefits that carriers can gain by replacing their old systems with a modern system such as Oracle Insurance Policy Administration for Life and Annuity. Our customers have achieved benefits such as faster time-to-market for new products, enhanced customer service, increased flexibility on product configuration, improved management and distribution by taking advantage of a modern system that is scalable and high-performance to support growth in the business.

In fact, one large multi-national carrier with tens of millions of active policies in several business units is currently implementing Oracle Insurance Policy Administration. They do business in more than 15 countries and wanted to standardize their solution into one modern policy administration system. The challenge facing the company was the urgent need for new modern systems to replace multiple aging policy admin platforms across the group. The carrier recognized that none of these legacy platforms met the requirements necessary to fulfill the strategy put forward, and they decided to standardize using the Oracle Insurance Policy Administration solution.

To learn more about how this company is achieving transformational results from policy modernization and is overcoming challenges by consolidating distributed policy administration systems, we invite you to watch the recent webcast hosted by LOMA and sponsored by Oracle.

Join Us for Oracle Industry Connect in Washington, DC, March 25-26, 2015

The impact of digital disruption is being felt in the financial services industry. Join us for open and provocative discussions during Oracle Industry Connect, an exclusive event taking place March 25–26, 2015 in Washington DC. The Financial Services and Insurance program brings together top business and IT executives from leading financial institutions including insurers, healthcare payers, and banks. Join your industry peers for in-depth conversations on trends, challenges and opportunities facing insurers today.

Don’t forget to keep up with Oracle Insurance year-round via social media.

Monday Dec 08, 2014

Group Billing Made Easy With Oracle Insurance Policy Administration for Life and Annuity

For many insurers, billing is no longer just a process of generating bills, but an important part of communication between the carriers and their customers. A majority of insurance carriers find themselves constrained by aging and inflexible legacy billing systems, which limit their ability to improve operational efficiency. Also, cumbersome or inaccurate billing has led to customer dissatisfaction, creating difficulty in selling additional insurance products to existing customers/accounts.

In order to address this problem, insurance carriers may be considering modern billing systems to be integrated with the policy administration systems. However, the addition of these systems creates complexities and limitations – in addition to increased investment for an external billing system – and also makes maintenance and further enhancements painful.

The Oracle Insurance Policy Administration 10.1 release introduces unified Group Billing functionality to better align the solution’s capabilities with market needs and trends.  This new functionality provides an excellent billing solution that can significantly impact an insurer’s processing expenses, improve cash flow, and increase customer satisfaction, especially in case of Group Billing where reconciliation becomes overwhelming. This solution also supports efficient and effective batch processing capabilities, eliminating the need for any external billing solution.

Group Billing in Oracle Insurance Policy Administration has been designed and developed with wide range of capabilities:

The solution uses a two-stage process in generating a bill, which allows it to capture granular details and makes Group Billing configurable.

  • Generate Bill Details

    This is a rule attached to a transaction that generates the bill details as various entity levels – usually at the Policy, Client or Coverage level.

    These bill details hold the most detailed information pertaining to any policy, client and coverage that can further be grouped together to generate Group Bills as required.

  • Generate Group Bill

    This is an attached rule configured to find mapped bill details to a Group Customer in order to generate a single Group Bill.

    The system allows the ability to define a billing group, which can be a company, government agency or other organization that handles billing for individual annuity or life insurance policies held by their employees or members. This billing group will be the recipient of the Group Bill.

    It is also possible to aggregate bill details to a Group Bill, based on bill details generated over a period of time, or based on set levels of bill due amounts. Search capabilities are available and can be performed at various levels. The Group Bill can be searched and accessed, so all bill details associated with the Group Bill can be viewed.

    The system can be setup to automatically generate a Group Bill on a given billing date and can be configured to support multiple client billing cycles (e.g. weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annual, annual or any other client defined frequency). The system is also capable of defining a configurable or system status with the Group Bill (for example Pending, Active, Released, Deleted). The status is changed as billing activities are processed for a specific Group Bill.

Group Bill Reconciliation

Once a Group Bill is generated for an entity (such as a Group Customer) and payments are received from the payer, these are adjusted against the individual Bill Detail entries and reconciled. The Billing Reconciliation enhancement introduces new screens, business rules and other functionalities needed to process the reconciliation and generate the required policy level activities to ensure the payments are adjusted to the policy.

User-friendly screens allow the billing/payment representative to easily find a bill and reconcile it manually and provide the ability to do adjustments anytime in future.

The system allows the addition or removal of a policy for a member that has already been generated, and reconciliation handles the associated adjustments needed.

The system has the ability to produce periodic discrepancy reports at the participant level, providing insight to into which employer-billed premium payments need to be resolved (e.g. may be missed deduction or underpayment) and to produce a periodic past due report, based on remittance frequency, to communicate the receivables that are not paid and past due.

Oracle Insurance Policy Administration’s Group Billing functionality can also identify and track unallocated cash (through suspense) and support retroactive enrollment, retroactive termination, and reinstatements. It also allows reallocation of payments or adjustments to individual receivables within system.

After reconciliation of the amount received, the bill can be released and the status changed. The system will automatically generate individual remittance activities for the policies included in the list bill for the amount received (reconciled amount). If there is an amount that is not reconciled, it can be applied to the appropriate level of suspense at the lowest level known, which can be at Group Customer, invoice, billing class or policy level.  The system also allows reversal of reconciliation in cases of erroneous payments (over payments, under payments or incorrect allocations).

Batch Processing using Data Intake

Oracle Insurance Policy Administration can receive an electronic format file from the employer or payroll provider for employee payroll deductions at participant (member/dependent) level – within a benefit by employer selected schedule (by pay period, weekly, monthly or any client-defined frequency) – and batch process it to generate scheduled Group Bills.

The system has the ability to support tracking, research and follow-up of unallocated payments (i.e., a batch of suspense items where all of the money was not applied as premium to contracts in the group, the unapplied suspense detail would be available). It is capable of receiving payments by means of lockbox, EFT, payroll deduct or manual check.

The system also supports search capabilities for missing or improperly applied payments in order to provide corrective processing to address improperly applied payments located in search. This includes the ability to remove payment, apply to another account or reopen suspense.

Learn more

Oracle Insurance Policy Administration provides a highly configurable and flexible platform that enables the carriers to innovate to keep pace with changing demands, simplify their IT environments and transform the business into an agile, cost-effective enterprise. The addition of Group Billing functionality offers an excellent billing solution that can significantly impact an insurer’s processing expenses, improve cash flow, and increase customer satisfaction

To learn more about Oracle Insurance Policy Administration for Life and Annuity and how Oracle’s solutions can be used to support your business, visit oracle.com/insurance.

Don’t forget to keep up with us year-round:

Wednesday Nov 05, 2014

Live Webcast with LOMA: Time to Transform: Business Realities Demand Newer Core Systems

Facing ever-changing market demands, life insurance and annuity carriers must continue to adapt their product portfolios—and business processes—as regulations, industry, competitors, and consumer needs change. Unfortunately for many carriers, their aging, legacy policy administration systems prevent or inhibit rapid changes to products or processes. However, insurers can overcome these challenges by consolidating distributed policy administration systems.

Join Oracle and LOMA for this webcast on November 11, 2014 at 2:00pm Eastern / 11:00am Pacific. We will discuss the advantages that one integrated Policy Administration platform offers for the Life, Annuity, Wealth, Group, Worksite, and Health Insurance market, and how it can improve growth opportunities for the future. We also present case studies on how carriers larger and small, domestic and international, have increased business agility and reduced costs and are achieving transformational results from policy modernization.

  • November 11, 2014
  • 2:00pm Eastern / 11:00am Pacific
  • Register Now

For more information on Oracle Insurance Policy Administration for Life and Annuity and how Oracle’s solutions can be used to support your business, visit oracle.com/insurance.

Thursday Oct 16, 2014

Market Value Adjusted Annuities

Changes in market conditions are leading carriers to make changes to their product offerings. “A lot of annuity carriers already have MVAs, but those that don’t are busy adding them to their products right now,” says Danny Fisher, president of the Fisher Agency, a Dallas brokerage general agency. The carriers are persisting on securing MVA approvals largely because of concerns about the interest rate environment, Fisher says. Today’s fixed annuities are paying very low interest rates, he explains.

MVA Annuities on the Rise

Let’s take a look at what’s happening in the MVA annuities market. Last year, while MVA annuity sales were up 88 percent over second quarter compared to fixed-rate non-MVA products were up 71 percent, income annuities were up nearly 19 percent, and indexed annuities were up 10 percent, according to Beacon’s third quarter report.  Similarly, when compared with third quarter performance of the previous year, MVA annuities in third quarter 2013 were up by staggering 131 percent, while fixed-rate non-MVA gains were less than half, about 61 percent.

$2.5 billion worth MVA sales in third quarter were up from $1.3 billion in second quarter. That growth says a lot about the current direction of the MVA segment: Sales are chasing rates. With this level of growth, carriers will need tools to help them manage this business in an efficient way.

Selecting the Right Core Admin Solution to help with MVA Annuity Management

Generally,  MVA annuity is treated as a fund that tracks the prevailing rate. Some products use calculated values stored in fields on the policy in lieu of a fund. A good life insurance policy administration system that maintains MVA annuity products should be:

  • Configurable to allow each carrier's version of MVA
  • Calculations should be customizable based on their product's profile
  • Be able to carry out a series of calculations using the results of each prior calculation, so as to arrive at the finalized; Cash Surrender Value after the MVA factor and then MVA has been calculated per set formulae.
  • Capable to quickly apply any changes/modifications to the formulae.

With the consistent growth in sales of Market Value Adjusted annuities, inevitable indications with various surveys have lead to suggest that Market Value Adjusted annuity products can boost growth in business for carriers of any size. Oracle Insurance Policy Administration provides a highly configurable and flexible platform that enables the carriers to quickly build and sell various custom products including Market Value Adjusted annuities with record speed-to-market times leveraging the highly customizable calculation capabilities and pre-built templates.

To learn more about Oracle Insurance Policy Administration for Life and Annuity and how Oracle’s solutions can be used to support your business, visit oracle.com/insurance.

Don’t forget to keep up with us year-round:

Friday Sep 26, 2014

Utilizing a Centralized Calculation Repository for Increased Business Agility in Life and Annuity Insurance

There have been different strategies adopted to contend with the many challenges facing life and annuity insurers today, from tactical product and service offerings through more strategic programs involving significant front and back office developments to support them. The use of a centralized robust calculation capability can be a key element in the life and annuity product supply chain.

David Punter, Global Product Specialist at Oracle, discusses the topic in today’s post:

I’ve been looking at market trends recently, around Insurance specifically, around Life and Annuity even more specifically. There is growth and there is contraction, it all depends on where you look, what cannot be denied is that it is sometimes a disappointing experience. But beyond that last bit, I see a realization amongst insurance carriers that in order to do more than survive in this capricious market, some significant investment in revitalizing their infrastructure is in order.

This is not the now classic tinkering around the edges with a spot of workflow here, a code conversion there or some productized patch from another insurer’s system to deal with enrolment from somewhere else. There seems to be something more to it this time. The image below outlines some statistics to substantiate this view.

[Read More]
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Oracle's flexible solutions can help insurers navigate the change necessary to meet today’s challenges and have the business agility to be prepared for the future.

For more information, visit oracle.com/insurance.

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