Carriers Lean Toward Document Management In Buying Software

"Property/casualty carriers appear to be more active [than life/health carriers] in replacing core systems, which makes sense, because their products do not have long lifespans like life insurer products," the report states. "In addition, a wave of activity in the document space may have already passed over property/casualty carriers, whereas many life insurers are just now getting around to addressing document issues."

Of the total 536 document management-related software deals reported, 281 (52.4%) involved life/health carriers, according to the report. The document management category includes document creation, enterprise content management, imaging and state policy/form filing.

For life/health insurers, "The broad category of document creation, as expected, was where most of the action was; it was the primary deal category for 63% of the deals in this metacategory," the report explains.

Deals in this metacategory were also "significantly overweighted toward existing customers," says Celent. "For example, among the five vendors that submitted deals in document creation, 79% of their deals were new functions or products sold to existing customers, while only 21% were for totally new customers."

Celent attributes that difference to "the nature of these solutions, which are often implemented by line of business or even by major business process."

The study concludes that for the fourth consecutive year, deal flow continues to rise, while solution quality is improving, "which gives carriers a reason to rethink traditional tools and methods."

Celent adds that, "Software vendors in insurance–particularly in life/health–traditionally have had a hard time convincing carrier clients and prospects that their latest offerings offered significant enough advantages to justify the switching costs. This may be changing, with the advent of service-oriented architecture and other modern approaches. System replacements, even for complex systems like policy administration or document automation, are no longer unthinkable."

Finally, the report suggests that carriers should leverage the insurance vertical expertise brought by vendors. In addition, "Carriers should use the data in this report and aggressive questioning during their RFI processes to ensure that their software vendors are well-versed in the particulars of insurance, which will help reduce implementation time and risks," the study notes.