Polaris technology is widely implemented in point of sale (POS) systems and this paper summarises what it does in business terms and explains the benefits which the approach brings to clients, intermediaries and insurers. Other items on the web site deal with Polaris’ approach to non-point of sale or negotiated business. Fuller technical information about the two pieces of software which implement the approach, ProductWriter® and the RTE, is provided elsewhere on this site.
Polaris’ aim in the point of sale area is to enhance the
productivity, profitability and viability of intermediary business in the
marketplace for the benefit of policyholders, intermediaries and insurers. The company was founded in 1994 partially in
response to the threat posed by direct writers and countering this remains just
as relevant today. The current focus is
mainly on volume business ranging from cars and houses to offices, shops and
hotels. However, as noted below under
“Current Developments”, the same technology is being used to automate more
complex insurances.
Polaris provides tools which allow both elimination of wasteful duplication and the introduction of standardisation in key areas of volume business handling. In a non-Polaris environment each insurer defined products in its own way, almost invariably on paper, and passed these to software houses for programming onto intermediaries’ systems. Waste is built into this process with insurers using dozens of different ways of defining products while each software house needed to program the description into its own rating engine. There are many rating engines to be maintained and often the very same insurance product was programmed more than once by different software houses. This unnecessary duplication of effort implies higher costs, which ultimately results in higher premiums to clients.
A slightly more subtle problem of quality also emerges. Insurer product definitions are voluminous and complex. The software house programmer has to interpret these and, not surprisingly, errors occur. The premiums intended by the insurer may not be those quoted by the POS system.
The description above focuses on defining new products. However, the same problems can occur with product updates. The process is complex, costly and error prone.
In a Polaris environment two major pieces of software – ProductWriter®, which provides insurers with a single way of defining volume products, and the Run Time Environment (RTE), which is the rating engine – provide the tools to enable simplification and standardisation of the process and so remove the costly overheads described above.
Using ProductWriter® insurers can describe all aspects of their insurance products – the rates which apply, the data which must be obtained for underwriting, conditions, the forms which will be produced at the point of sale and the way individual cases will be notified to the insurers. Defining a product is further simplified since Polaris also provides sample products as a starting point. Within these samples full cycle business processing is defined and so to launch a product an insurer only has to insert their rates and conditions.
The output of ProductWriter® is a computer file which works in conjunction with the RTE. An intermediary with a system incorporating the latter will be able to handle full cycle processing – ie quotes, new business, mid term adjustments and renewals.
Currently, ProductWriter® can be used to define insurance products in the following classes:
§ private motor
§ household
§ motorcycle
§ commercial packages (shops, offices, restaurants, surgeries, small business and related cases)
§ commercial vehicle (including fleet and commercial motorcycle).
EDI is well established in motor insurance and has brought many benefits, such as reduction in error rates, faster servicing times for customers, elimination of much paperwork and avoidance of rekeying. Polaris technology is designed to build upon these by making insurance product definition and update cheaper, easier and faster. The two technologies are essential if an efficient electronic marketplace is to be established and Polaris therefore supports the necessary EDI messages for all the above lines of business.
With the use of the Internet as a communications medium, new messaging standards have appeared. One of these, XML, is being widely used by Polaris in the development of commercial lines electronic trading. XML is being used to underpin the UK general insurance industry e-trading portal, known as imarket and will probably replace EDI messaging in personal lines in years to come.
There are many software houses providing package application software for intermediaries in the UK and an equally large number who are developing or providing e-commerce solutions via the internet or digital TV. They are fundamental to delivery of the benefits from the Polaris approach.
The Polaris product which intermediaries use is the RTE (or the rating engine), but this is only one part of the full functionality required by a broker. The RTE must be embedded in a broking system which will provide accounting, client handling, policy records and many other functions. It is only through active cooperation with the software houses that Polaris has achieved its widespread use in the market place and integration of the RTE into most major software house systems is complete eg CSC, Experian, Graylink, SSP, Insurecom, Acturis, Sirius and Winchester have all integrated the RTE.
OpenGI, via their Diamond product, utilises ProductWriter® defined products but does not use the RTE.
The AA has a large scale implementation of Polaris software at their call centres. The system provides both motor and householders rating from a panel of over 20 insurers and 50 products.
Polaris software is being actively developed to support more complex commercial classes, especially for integration into the imarket portal. Polaris is actively working with the major UK insurance software houses to integrate commercial lines trading into their systems, with Productwriter underpinning the proposition.
However, as well as adding new business classes, we are also seeking to handle more complex risks within the existing facilities. For example, much of what is currently viewed as complex commercial could be handled in a similar way as packages. The goal here will be to underwrite as much of the risk as possible in automated fashion, leaving the Underwriters to handle only the areas that need their attention. One UK general insurer already handles commercial combined insurance in this way.
New distribution channels are another development direction. The Polaris software already provides insurance quotations on the internet for UK-based risks, for example via the Zurich Direct, Axa Business Risks and AA web sites. Additionally, the same base technology can be used to provide insurance quotations for digital TV services. The Polaris software has proven to be remarkably flexible and its implementation on the internet involved no alterations to either ProductWriter® or the RTE. However with the greater emphasis on the use of XML for e-commerce technology solutions Polaris has also introduced RTE support based on this message format which allows faster, and more flexible, internet developments.
The Polaris approach now has widespread market support and is being used for motor, household and commercial products already. Although the technology was developed for use in intermediaries’ offices, it has proved robust enough to support new distribution mechanisms – eg the Internet and imarket.
The Polaris software has now proved its worth and will continue to gain ground as the way to trade at the point of sale.