Policy Admin Systems Are Evolving

Modern solutions, including cloud-based options and lower-cost implementations, are redefining what constitutes a policy administration system.


Core system replacement rates for property/casualty insurers have fallen from their early 2010s peak, but that doesn’t mean modern systems aren’t in demand. Newer trends for policy administration systems (PAS) include cloud-based options and lower-cost implementations. While these platforms remain vital for stakeholders across the entire insurance life cycle, modern solutions are redefining what constitutes a policy administration system. 

Time to market is a key driver. Insurers are looking for systems that can help them develop new products and enhance existing products quickly, improve the flexibility of product development so they can enter new market niches, reduce the overhead costs of system maintenance and legacy platforms, improve data access and analysis capabilities and make third-party integrations seamless. 

In addition, the industry has moved toward general acceptance of cloud-based and SaaS subscription core systems — in fact, most insurers prefer cloud options to on-premises deployments now. Cloud systems are just one element of a more digital-focused experience for employees and policyholders alike. Other aspects of this digital-first mindset include direct-to-consumer quotes (and sometimes policies) through digital portals and mobile devices. 

Customer Expectations Around Self-Service

Expectations for online self-service capabilities have been steadily on the rise thanks to direct sellers of insurance and the influence of other industries (e.g., retail, banking). In both personal and commercial lines, insurers are having to focus more on the customer-facing technology they offer as well as when consumers can access that technology. Failing to meet this demand can lose customers, even in lines of business insurers might not anticipate. The same can be said for employees; attracting IT talent is difficult when the systems involved are older than the job candidates themselves. 

Agent and customer portals are a common component of PAS offerings. If a portal is not built in, the solution likely offers APIs that enable insurers to integrate a high-quality front-end experience with the back end. 

A number of vendors have moved beyond the traditional portal in favor of a digital platform. These low-code platforms allow insurers to deploy highly differentiated customer experiences while retaining good integration with the core PAS solution. 

M&A Activity

Insurers looking into a new PAS should be aware that M&A activity is common in this space. While the rate of activity has declined from its peak, acquisitions are not unusual. Larger vendors like Insurity, Guidewire and Sapiens have all grown their portfolios by acquiring smaller companies with interesting capabilities or customers. This trend continued this year, with some vendors investing in virtual assistants, systems focused on MGAs and surety-specific platforms, among others. 

Larger vendors were also focused on building out their integrated suites, which can be appealing to insurers looking to work with fewer vendor partners. In addition, private equity firms invested in PAS providers this year; for example, Thoma Bravo acquired Majesco last fall, taking the company private again. 

See also: Designing a Digital Insurance Ecosystem


Cloud deployment is no longer considered an emerging trend. In fact, some vendors now only offer a cloud-based solution. The potential for lower total cost of ownership and enhancements to performance, scalability and security have made the option more appealing to insurers. Cloud-based PAS platforms also promise to simplify the update process for vendors and insurers alike. While cloud has gained traction in recent years, maturity levels vary widely across vendors and insurers alike. 

Insurers should ensure that their vendor has the right level of cloud experience for their organization’s needs. When choosing a vendor partner, insurers should examine what cloud options vendors can support, whether cloud-native capabilities are leveraged and if the vendor can offer the  automation needed to take full advantage of cloud. Also of note is a slow shift toward multi-tenancy; vendors are likely to continue supporting single-tenant deployments for the time being, but multi-tenant installations and services are gaining traction.

Evolving Platforms

Low-code and no-code platforms are another area gaining focus as they decrease the expertise required to build applications. Low-code techniques have been present in the PAS world for a few decades now, but these capabilities are advancing to meet insurers’ customization needs. In fact, a number of vendors, such as Unqork, Jarus and Salesforce, have built or are building policy administration capabilities on top of their original low-code platform offerings. 

To learn more about the current state of the PAS vendor market as well as learn about prominent solution providers in the space, read Aite-Novarica’s recent report Property/Casualty Policy Administration Systems.

Martin Higgins

Profile picture for user MartinHiggins

Martin Higgins

Martin Higgins is a senior principal at Aite-Novarica Group.

He is an experienced insurance technology consultant, having served as practice director for Edgewater Consulting, where he was responsible for the company’s property and casualty business nationwide. He has expertise in technology strategy, core system selection and implementation, systems integration, legacy modernization, software development and data warehousing in property and casualty, life/annuity and health insurance. His most recent experience includes founding a boutique property/casualty-focused consultancy and serving as VP of solutions engineering for a core systems vendor.

Higgins holds an M.Sc. in computer science from Imperial College in London and a B.Sc. in physics from University of Lancaster in the U.K. 


Read More