Rethinking Life, Annuity and Benefits PAS Systems Part 1
Rebooting the LA&B PAS Experience
A customer recently asked how I would build a modern Life Policy Administration (PAS) system in the age of AI, Vibe Coding, and Quantum Computing. While our initial discussion focused on AI's role, the question sparked deeper thinking about the future of PAS systems. In this series, I'll explore what a next-generation Life/Annuity/Group PAS system could look like, leveraging today's technological capabilities. While I'm not building such a system, my goal is to spark meaningful industry dialogue and push our collective thinking forward.
A quick discussion of Product/Market fit at Scale
1) In today's market, it's critical to offer a SAS-based solution in the cloud, but you must make an early choice about native cloud single vendor or native cloud multiple vendors. There's a lot to be said for being on a single cloud platform with scale and access to additional capabilities being at the top of the list, but for true flexibility if you're seeking to support both top tier and lower tier insurers it's probably best to be portable between major cloud vendors.
2) The insurance industry has moved from mostly closed monolithic systems on mainframes, to best of breed architectures providing great flexibility but complexity in DevOps and data management, to core system platforms that provide integrate insurance specific capabilities with a measured amount of API connectivity for the use of third-party solutions.
For the sake of this exercise, we're going to assume many of the DevOps and interoperability issues have been solved through modern API adoption, mature service bus platforms, and the introduction of more standardized transactions available through industry standards. This makes the best of breed / micro-services approach more tenable than it has been in the past and defines an alternative to open platforms that seem more like the new, somewhat more open monoliths.
3) Scale is important, but it works both ways. If we are truly going to include insurers from Tiers 1-4 in our target market, we must support different type of solution models and the lower Tier insurers will be the most demanding of out-of-the-box capabilities. Arguably, a Tier One insurer will be more interested in the best Product Engine in the market that integrates with an enterprise standard service platform than a platform, and a Tier 3 will be more interested in an end-to-end solution that fully supports their new supplemental benefits line.
Now that we have that laid out, let’s move on to the first, most important component.
The Product Engine: Foundation First
The cornerstone of any modern PAS is its product and calculation engine. This requires combining insurance product expertise with architectural knowledge to create a flexible engine supporting life, annuity, and employee benefits products. Treating this as a separate component but interrelated from system of record (up next time!) give more flexibility and the ability to serve a wider variety of business problems.
Key capabilities will include:
Insurance-specific calculation services with deep capabilities built by insurance experts
Configurable product definition templates that don't constrain future insurance products and support creating solution bundles that corss traditional product lines
Modular design for standalone deployment for a service-based architecture as well as part of an end-to-end solution
Out-of-the-box first capabilities wherever possible to avoid need to configure industry standard capabilities every time
