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3rd Generation Pool Administration System

One of the largest residual market carriers for wind & hail insurance in the United States now serving approximately 100,000 policyholders covering 110,000 locations worth $17B was performing all of it’s accounting, policy processing, and claims processing on an aging Paradox for DOS based multi-user LAN application. The application lacked sorely needed functionality, security, maintainability, scalability and reliability needed for such a mission-critical application. In addition, management was concerned about the ability to handle a major storm where in excess of 10,000 losses could be incurred suddenly.

The Challenge
Attempts to fix the software failed because it was poorly designed and poorly implemented. The pool decided that it needed a new system and that it needed a strong requirements specification to help them make the “buy vs. build” decision. A key area of concern for pool management was obtaining effective reporting capability since it had to file it’s own rate structure with state regulators.

The Solution
After seeing SST’s second generation pool administration system, RPMS, SST was hired in 1996 to develop a formal requirements specification document along with revised workflow, hardware recommendations, and testing recommendations. SST used the Business Area Analysis and Requirements Planning Phases from its ESCAPE methodology to create a comprehensive requirements specification document. The requirements specification document consisted of over 200 individual functional requirements that were represented in numerous dataflow diagrams and over 300 pages of narrative text. The pool issued a request for proposals to companies offering products as well as custom software development. SST’s proposal for custom software development was selected based upon offering the pool a solution delivering a perfect, custom fit at the lowest price. SST designed and developed a new, third generation system providing integrated policy administration, accounts receivable, claims administration, and data analysis. This Microsoft Windows-based software was built using object-oriented design principles, scaleable client/server relational database technology, expert systems for data validation and enforcement of business rules, and spreadsheets for rating. To provide sophisticated analysis and reporting capabilities while not slowing down day to day operations, SST deployed its Risk360°/Data Warehouse product. Risk360°/Data Warehouse took a copy of the data and reorganized it in a way optimized for effective reporting. The integrated business intelligence tool was used to create routine management reports and is used for ad-hoc management reporting and analysis of potential liability based upon storm paths.

The Result
SST’s third generation system provides the pool with mission-critical reliability, lower labor cost per issued policy, and streamlined business processes which lead to faster and better service to agents and their customers. The accuracy and consistency of policies and endorsements has increased greatly. Processing endorsements now takes a fraction of the time. The most significant result was that the system handled a 4,000 claim storm in September of 1998 without a significant decrease in performance. The old system would have probably died under the workload.