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When Wisconsin insurer replaced legacy policy administration system, it bolstered data analytics

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When Wisconsin insurer replaced legacy policy administration system, it bolstered data analytics

When insurance companies decide to replace core processing and administrative systems, things can get complicated. In the case of Middleton, Wis.-based Capitol Insurance Cos., replacement of its policy administration system was part of a recently completed multiyear reboot of its entire technology infrastructure.

“We spent the last eight years' effort practically redoing everything, even building a new data center,” said Troy Lethem, chief information officer of Capitol Insurance.

“The problem that we had was that our surety system was really obsolete,” Mr. Lethem said. “It had been custom-developed, and there was only one person left in the world that really knew how to maintain it and improve it.”

Indeed, replicated years of real-world functionality and business rules contained in the old system was a primary challenge during the 18-month replacement process. But another challenge was data conversion, and the company opted to convert all of its data rather than running the new and old systems in parallel for a period.

To replace the aged system used to administer and underwrite policies for its fidelity and surety market segments, Capitol opted for the Marlborough, Mass.-based OneShield Inc. Dragon Designer toolset.

Now, with the project complete and business conducted through a modern Web-based system, the surety line is better positioned to grow, said Heather Peacock executive vice president of client delivery and professional services for OneShield.

“In Capitol's case, not only did they want to replace a legacy system, they wanted to fundamentally change how they do business,” Ms. Peacock said.

Process improvements include an automated bond issuance system and increased ease of use for the company's agents.

“Most important of all, we wanted to put a system together that allowed us to more effectively serve our bond agents,” Mr. Lethem said.

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Mr. Lethem said that the new system allowed the surety business to consolidate all of its back-office processes in one location. “There were significant productivity savings by getting all of this onto a central processing system,” he said.

Another benefit has been better reporting capabilities engendered by the new system.

“The president of this division has a very comprehensive dashboard of data that he aggregates to manage the business, and it's far easier to get it out of this system than the previous one,” he said.

The platform also positions the company to have more ready data for use in analytics. However, the company is more likely to deploy the technology in its commercial property/casualty lines than its surety lines, Mr. Lethem said.

“We are doing more analytics on the P&C side but just getting going on it,” he said. “We do anticipate doing it for surety somewhere down the road, but there probably won't be as much bang as on the surety side because it's not quite as complex.”

Mr. Lethem said that while the decision to convert all the data at once made things easier for the business unit by eliminating the need to use two systems simultaneously, he wouldn't recommend mass data conversion to those considering it.

“If you are going to roll off of a system in a year or year and a half, you are better off waiting to convert at renewal than doing a big-bang data conversion,” he said.