Greater customer satisfaction is also a benefit
Market pressures are forcing all types of insurers to enhance their ability to quickly change the way they do business. The speed with which they can react to dynamic market conditions and customer requirements is a make-or-break critical success factor. The pressure for flexibility makes elimination of bottlenecks that thwart rapid modification of business processes a high priority.
Unfortunately, for most insurers, making even simple business changes to their IT systems can take weeks or months. The policy rules governing critical business processes are often “hard-coded,” embedded deep within multiple applications. From applicant screening and underwriting to claims processing, the task to maintain these rules consistently has become very complex and daunting for IT organizations. The lack of a centralized policy rule repository often results in inconsistent representation and outcomes across the many disciplines. Ultimately, this can lead to fines–or even worse, the loss of business to a competitor.
To address this problem, insurers increasingly are turning to Business Rules Management Systems (BRMS), a.k.a. Business Rules Engines. Simply put, BRMS is software that enables other application logic to change more flexibly and quickly. It does this by externalizing business logic from underlying IT systems, representing the logic in a central BRMS repository where it can be quickly and easily viewed and changed by business and IT professionals while providing the decision support needed for the overall system to function. A BRMS can integrate with legacy applications as well as the new Web services technologies that are being increasingly adopted by insurers.
Why go through the pain and expense of a “rip and replace” approach to outmoded legacy applications when a BRMS can prolong their useful lives by rendering them much more flexible? Business rules technology is helping insurers externalize the business logic that was formerly trapped, in effect, in their legacy systems, in ways they can understand. With a BRMS, carriers can:
o Empower policy administrators, underwriters and other business users to create and maintain the rules in systems that support critical business processes themselves;
o Gain the control, speed and flexibility they need to modify business rules at the speed that their business conditions change;
o Eliminate the IT bottleneck caused by dependency on programmer intervention to create and maintain rules embedded in code, while fostering rule reuse to improve consistency and reliability; and,
o Perform scenario analysis or try new business processes in live systems with the confidence to know that improvement can be made quickly.
Why Business Rules in Insurance?