In our latest blog post, we discussed the API interface, sales processes, and an insurance system that can serve as a product engine for other systems. We would like to expand on this last topic related to the product engine, focusing on the management of insurance products. Let’s start by defining what an insurance product is.
Not so long ago, all policies were tariffed by applications on the insurance agent’s side, based on offline tariffs, commonly known as flat rates. Currently, more and more insurance companies provide their tariff using web services, i.e., online. In this approach, the tariff owner can modify its parameters at any time, taking into account many external factors affecting premium calculation. Insurance companies use additional online information sources to consider more parameters when calculating premiums, such as solutions like CEPIK or UFG. These tariffs are called dynamic.
Handling tariffs in both models requires the insurance system to have appropriate supporting and complementary functionalities.
How does the tariff translate into products and policies in the Insurance System?
The definition of an insurance product consists of several elements, with the key one being the algorithm for calculating premiums available online or offline. Additionally, various supporting functionalities may be needed. In the case of policies issued based on offline tariffs, a whole range of add-ons may be required for proper product handling, derived directly from general, agency agreements, or other provisions. This includes information about available discounts, surcharges, discounts, export formats (commonly called readings), additional reporting, etc.
Handling products based on online tariffs may look slightly different. Unfortunately, differences in operation are significant, starting from the communication method with a specific insurance company, functionalities that can be performed online (e.g., policy cancellation, endorsement), and ending with production reporting. Insurance companies often provide the online ability to calculate premiums or even the entire process of issuing a policy, but additional functionalities are still needed. Usually, document templates are also required, from which policies, endorsements, welcome letters, etc., will be generated, or the configuration of marketing consents.
Product – What's Next?
Configuring a single insurance product does not necessarily mean that we can start selling policies, especially when we have an extensive sales network, different commission rates in the network, and would like to manage the default insurance scope.
The VIP system has many functionalities for efficient product management and many additional options that can be used when modeling a product in the system. One of the most important functionalities in the system is the ability to settle the sales network based on commission files provided cyclically by insurance companies. The system allows creating multiple copies of a product, each product can have a different default insurance scope set by the administrator, and can be assigned to any number of intermediaries in the sales network. It is worth mentioning that the commission can be a static value defined for each product or dynamic—changing over time, based on a set of indicators monitored in real-time, e.g., premium growth year over year. If our organization has about 5-6 different insurance tariffs and, therefore, an adequate number of products, managing these products and settling the sales network without system support will be quite a challenge.
Other very important functionalities available in the product catalog include, for example, copying products and creating further based on the original product. The system also supports versioning of products over time, ensuring uninterrupted business operation and inconspicuous configuration changes in the system. In the case of selling dealer packages available online, where the insurance program and specific insurance variants are determined between the owner of the sales network and a specific insurance company, the VIP system allows mapping variants defined by the insurance company and presenting offers in a strictly defined range. In the case of offline tariffs, product configuration available to the administrator allows direct definition of dedicated products for specific types of vehicles, and even their brands. The whole is complemented by the document template module – VDS (VSoft Document Services), which is a plug-in addition to the Microsoft Word application. Thanks to this module, the user can manage documents generated by the system. Management involves creating and modifying any documents that can be generated in specific locations in the system. Thanks to this, modifications such as adjusting the policy template to changes imposed by insurance companies’ ZK certificates, endorsement documents, or creating any new documents can be done by VIP system administrators.
He has been in the IT industry for 20 years, also an IT specialist by education – a graduate of Computer Science at the University of Silesia. He joined the VSoft team in 2010 as a quality expert, then served as an analyst, and today he is a business solutions architect. He provides enormous support on the client-company line, specializing in the analysis and design of IT systems. He is mainly responsible for the development of the VSoft Insurance Platform.