Tuesday, March 12, 2013
Three criteria that industry analysts miss when it comes to selecting a standalone rating engine? (Part One)
First and foremost, industry analysts tend to compare surface-level product features and usually are blissfully ignorant as to understanding subtle architecture nuances. Please note that many industry analysts gather information solely via survey methods and may not come from a technical background. Below are three architecture considerations that are absolutely vital in gaining insight from a vendor prior to purchase.
1. Microsoft Excel: I recently observed an insurer complain about limitations in using spreadsheets for actuarial modeling who created a RFP for a better solution. Interestingly enough, they chose a product based solely on analyst features that also happened to simply wrap Microsoft Excel! While this particular insurer didn't have technical expertise to understand the trap they walked into, one clue would have been to look at rating engines that ONLY run on Microsoft Windows.
2. Cloud: Does your rating engine vendor restrict how you deploy the product? Two different insurers I frequently interact with have a strategy to migrate away from physical servers in their datacenter towards virtual private cloud in HP datacenters. One insurer was sticker shocked when their vendor quoted them a ridiculous price under the guise that they couldn't measure deployment and therefore had to purchase an unlimited license. The other insurer fared even worse. The vendor required the insurer to purchase an entirely new product.
3. Mobility: Another insurer is currently working on a game changing mobile application that will allow their captive agents to perform extensive quoting in the field. Their current rating engine vendor unfortunately doesn't have an offering that works with Android. The carrier now has to run two different rating engine products.
I will be attending the ACORD LOMA event in Las Vegas and am game to share experiences and perspectives on the other marketplace offerings over dinner. If you won't be attending this event, but otherwise want to discuss this in more detail, just drop me a note at firstname.lastname@example.org using your WORK email along with a few time slots and I will setup a conference call via Outlook calendar invite as a followup.