If Web-based rating has promise, though, how do you go about it? What implications does it have for legacy systems? What implications does it have for the agency sales force? A number of vendors are now supplying promising Web-based rating solutionseach offered some interesting insights. Twenty-three-year rating veteran Rackley Systems (www.rackley.com) supplies single-carrier and comparative personal and commercial lines rating solutions, and it has recently retooled to use Microsofts .Net. Duck Creek Technology (www.duckcreektech.com) , a two-year-old startup, is staffed by long-time rating experts and uses XML to specifyrating plans. AscendantOne (www.ascendantone.com), another new company loaded with industry experts, supplies next generation rating software as well as a complete front office solution.

What are carriers actually doing?

Duck Creek CEO Doug Roller said about half his companys business comes from carriers looking for what he calls tactical solutions, and the other half strategic solutions. The former group wants to get something up and running quickly, without impacting their current systems. The latter is looking for complete, long-term solutions and doesnt want to take half-measuresthey dont, for instance, want to maintain two rating platforms in parallel.

Mark Stroop, executive vice president at Rackley, reported that one of its customers has been working on a strategic solution for yearsat great expensebut may contract with Rackley to provide something that works now while it struggles with its massive project.

And Chuck Boodro, CTO of AscendentOne, said that in a recent experiment, a prospect was able to attach remote AscendantOne rating services to its legacy system in 10 days. That created the possibility that they could have their cake and eat it tooleaving their legacy system undisturbed but adding Web-based rating, a strategic-tactical blend.

Legacy carrier software often blends the user interface, business rules, and data management into one program. Although that might get the job done, its a poor environment for changewhether of rate plans or new forms of presentation. Many carriers and rating vendors have found themselves hamstrung by past programming sins. The analysis and intellectual capital buried in the rating software cant easily be reused or applied to new needs. At the same time, doing the whole thing over again from scratch may be prohibitively expensiveputting the carrier between a rock and a hard place.

Problems and Solutions

The first order of business is to separate rating from other policy processing, and separate the mechanics of rating from the presentation and database systems.

As too many carriers have realized too late, the big problem isnt creating a rating system, its maintaining it responsively at modest cost.

Rackleys approach to the maintenance puzzle is to take on outsourcing responsibilities. Duck Creek and AscendantOne are happy to accept maintenance responsibilities, but find that some carriers, at least, both want and are good at developing and maintaining rate plans using the vendors tools.

Roller said that Duck Creek employs the concept of a manuscripta collection of everything that makes up a rating environment, including tables, rules, workflow, presentation, documentation and so on. All that information is stored and maintained in XML format through a collaborative authoring system. Nothing is hard-coded. Rating analysts, not programmers, can develop and maintain the rate plans.

AscendantOne, according to Boodro, sees ease of ongoing maintenance as the crucial test for rating software. The vendors rate-plan-creation and -maintenance tools provide English-language documentation as a by-product of the process along with before and after comparison reports to help manage the change process. And rate plans are based on an inheritance systemnational/state/carrierto minimize creation time and maintenance effort.

The Comparative Rating Issue

Few carriers will ever be enthusiastic about the prospect of being part of an agencys comparative rating environment. Its much more pleasant to focus on fielding one-company Web-based ratingmaking it attractive, fast, and effectivewith the hope that agents will use it more than whatever the competition provides. And although agents are happy with penny-accurate, carrier-supplied, Web-based rating and the opportunity to complete the submission and binding process online, in the longer run agents want comparisons and standard workflow across multiple carriers.

Carriers canton their owncreate multi-carrier Web-based rating. So how do well-intentioned carriers at least assist the process? One way is by using Web-based rating that has a multi-purpose, modular architecture. The Rackley, Duck Creek, and AscendantOne solutions all are. And in the case of Rackley, because the vendor also supplies comparative rating services, the vendor can help the carrier be part of a multi-carrier solution for agents.

And so

Ive had enough involvement with rating over the years to understand how difficult it is to maintain rate plansnot just in the narrow sense of changing a particular rate or making changes to the structure of the policy, but in the broader sense of capturing knowledge in a way that it can be reused for purposes not contemplated at the time the analysis was done. The larger issue of maintenance isnt within a technology generation but between them. Thats the insight these three vendors, and others like them, have had about the nature of the rating problem, and thats whats especially interesting about their solutions.

Elegant solutions solve multiple problems simultaneously. The need for Web-based rating should be viewed, I think, not simply as a way to put rating on the Web (as attractive as that prospect is), but as a way to solve future rating and insurance deployment problems that wont even surface until 10 years from now. If the Y2K debacle taught us anything at all, its that the future comes sooner than we think.

clickhere

AscendantOne: www.ascendantone.com

Duck Creek Technology: www.duckcreektech.com

Rackley Systems: www.rackley.com

John Ashenhursts company, Sound Internet Strategy, provides consulting, Web site evaluation, and seminar services to carriers and their trading partners. He can be reached at johnashenhurst@soundingline .com or (978) 318-1944.