Many underwriters today know they need a modern policy administration system (PAS) to evaluate complex risks and improve the customer experience. But they also know that just as important as successfully implementing a PAS is proving its worth over time. How do you measure the success of a new PAS? What are the key performance indicators (KPIs) that will demonstrate a significant return on investment (ROI)? And how do you track those KPIs with ease using reliable data? Focus on product and process Evaluating system performance begins with identifying the two areas that should see the greatest impact: product and process. With product, it’s critical to focus on the output. How many insurance programs were you able to develop in a year? How many of those were new vs. modified products? And how long did it take to bring those products to market? Many insurers struggle with slow product development. Traditional carriers can take six to 12 months to bring a new product to market. Those that are digital-native could cut that to under two months, according to a study this year with InsurTech NY. When looking at process, you should look at all of the aspects that affect the product’s success, including marketing, distribution, and underwriting. With marketing, how many campaigns were you able to launch with your PAS? What were the response and conversion rates? For distribution – what was your quote time and placement rate? And for underwriting – How many policies were underwritten? How long did the process take for each policy, and how many of those benefitted from straight-through processing? The answers to those questions may vary based on the line of business, region, and market opportunity and the PAS you have implemented. But the cumulative effect will also be evident in your expense ratios. A study by McKinsey found that by 2030, those insurers that fully leverage automation and digitization could reduce their operating expenses by up to 40 percent while also enhancing the customer experience. When to measure The best time to start tracking performance is before you implement your PAS. Those benchmarks will clearly illustrate the impact of the new technology on product and process. But if you’ve already implemented your PAS, you can still benefit from establishing and monitoring KPIs. By watching how trends develop quarterly, you can quantify the effects of automation and robust data integration in your workflows over time. Setting realistic expectations The reality is that very few insurers reap the full benefits of a modern PAS. A Capgemini study last year estimated that only 8 percent of property and casualty (P&C) insurers globally are “underwriting trailblazers” that are using automation and robust data to deliver fast and forward-looking decisions. According to the study, underwriting trailblazers outperform other insurers in a wide range of metrics, including the integration of third-party and traditional data, the adoption of innovative insights, and the deployment of underwriters as sales enablers. Many process improvements can take years to fully realize, which can be challenging for insurers that are struggling with financial pressures and need to cut costs quickly. If not implemented properly, new technology can go into “pilot purgatory,” where software is tried but never fully adopted across an organization. Getting the full picture Tracking ROI is only valuable if you’re using reliable data that is both up-to-date and easy to access. Origami’s cloud-native SaaS technology includes built-in dashboards and reports to help insurers access the data they need to assess progress. The underwriting dashboard provides users with the latest data, such as what’s in the queue, how long it takes to process those submissions, and how many of them become bound policies. The claims analytics indicate not only how many claims are being processed, but how frequently they are filed, how many are closed, and more. All of this data is presented at the top of the dashboard screen and can be customized to meet the needs of the specific insurer. With that dashboard data and drill-down capabilities, you can tell a complete story about ROI across each phase of the policy lifecycle. For more information, visit https://origamirisk.com/solutions/insurance/.