Integrations in Core System Solutions

Integrations are an integral part of every core insurance system. The core system needs to talk to third-party applications to either consume certain information, send updates, or do a both-way sync. A successful core system implementation relies heavily on the effective contribution of the three parties: the insurer, the core system provider, and third-party vendors. However, an insurer should take a lead role in these collaborative exercises and work with the core system provider to build the most effective solution.

The following SAVE principles are meant to provide guidance on building a robust and maintainable integration:

  1. Solution – The integration as part of the whole solution

Insurers need to understand the scope of the integration within their workflow. It’s important not only to understand the technical complexity but also to visualize the whole solution after the integration is put in place. Most vendors offer multiple features to integrate, and it’s very important to identify the scope of the vendor’s application in the context of the core system and focus on the whole solution beyond the vendor’s product capability.

  1. Access – The integration access point and its details

Once the solution has been envisioned, details about the access point of the integration becomes the next critical concern. Implementation teams need to work collaboratively to determine the invocation scenario of the integration. They need to decide how to handle exceptions (business and technical). The resiliency of the solution for all scenarios should be given careful consideration. Maintenance and upgradeability are additional critical parameters that should be considered as well.

  1. Value – The benefit provided by the integration

Because this is the most important part of the solution, insurers must understand the value that an integration brings to the whole solution. Different integrations provide different values, with a focus generally on improving efficiency. If it’s difficult to come up with an exact dollar value for the improved efficiency, insurers can consider improved agent and customer satisfaction or better user experiences as examples of parameters to quantify it.

  1. Expense – The cost of building and maintaining the integration

Although a detailed estimate is generally made of the implementation effort for the integration, other expenses should also be considered. How the insurer is charged for the data exchange is an important item. Some integrations charge on a per-call basis and some on an account basis. A careful consideration of these up-front and recurring charges helps determine the total expense incurred for an integration.

Using the SAVE Model

Taking a holistic approach to determine an integration’s scope from these four principles helps build a robust solution. A due diligence study at the inception and implementation phases will definitely help to develop a solution that is not only beneficial for the business but also sustainable in the long term.

A focus on the SAVE model is key to building a more effective solution.