Citizens Property Insurance Corporation Information Systems Advisory Committee Meeting Report: June 24
Jun 24, 2011
Citizens Property Insurance Corporation (“Citizens”) Information Systems Advisory Committee (“Committee”) met via teleconference today, June 24, 2011, to consider a proposal to replace the current policy management, billing and claims systems with a new system manufactured by Guidewire Software, Inc.
To view the agenda and meeting materials click here.
It was explained that Citizens’ existing three-tier software system is 25 years old, with limited functional capability and increasingly expensive maintenance costs, which have created a high-risk situation. A review of financial costs, qualitative benefits and a risk analysis showed that investment in a new system with more sophisticated technology was warranted, it was noted.
It was explained to the Committee that Guidewire Software, Inc. — based in San Mateo, California – was founded in 2001 and already serves more than 70 large insurance companies, with more them 40 of them having direct written premiums greater than $11 billion.
After hearing the report comparing the existing system to the proposed new system, Committee members voted to recommend that the Board of Governors (“Board”) sign a $47 million, 15-year contract with Guidewire to be implemented over four years. The new system is expected to provide a net 10-year savings of approximately $108 million, with a 10-year investment of approximately $73 million.
“It seems the greatest risk is to do nothing, to continue operating on three systems,” said one Committee member.
“Tangible” benefits of the new system include interfacing with just one system, enhanced agency-underwriting capabilities, workflows integrated with the policy system, one billing system, faster adjuster speed, standard and streamlined billing and payments processing, and ledger interfaces to one system.
Further, the new system also would afford greater speed and flexibility to implement rate adjustments, rate structure changes and compliance responsiveness, it was explained.
The Committee also voted to recommend that the Board approve the purchase of a $1.9 million systems integration tool suite by Oracle Systems to simplify inter-business system integration complexity and costs.
Citizens’ Information Technology Department currently supports 121 business systems and integrates with more than eight external business partners. According to the Committee’s report, it also offers more than 256 Web-based services.
With no further business before the Committee, the meeting was adjourned.
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