Report Summary:

This report provides an overview of the available illustration software solutions for US life/annuity insurers. The information in this report was collected directly from the solution providers using Novarica's proprietary universal RFI. The report contains brief profiles of each of the 8 vendor solutions listed in the Contents (opposite).

While many insurers still use disconnected or stand-alone homegrown illustration solutions, market demands are increasingly moving towards integrated solutions that are seamlessly linked to an agent portal and electronic application submission capability on the front-end and a policy issuance and administration system on the back end.

Integrated illustrations systems (whether parts of a suite or stand-alone packages that share data and logic effectively with other systems) can offer significant advantages in time-to-market for new products and time-to-issue for applications that can flow straight through in electronic form.

In addition, the old code-based model of integration systems where product logic and calculations were instantiated deep in computer code is giving way to a more rules-based model where product logic is managed through a rules-engine-like interface, which allows expert users to make, and more importantly to test, changes without burdening IT.

The illustrations market has been relatively quite compared to other sectors of insurance IT. The two biggest changes in recent years have been in 2006 when Accenture acquired Navisys and AdminServer launched IllustrationServer (Oracle announced it's intention to acquire AdminServer earlier this month). At present, the market is mixed between solutions that are components of broader suites and those that are stand-alone components.

More than half the market by number of companies is still made up of smaller, independent firms. Given the level of consolidation in the insurance software space in recent years and the movement of several new players into the life and annuity new business area, we expect that several of these companies will no longer be independent within 12-18 months.

Insurers should make sure that their contracts include appropriate guarantees for change of control, including access to source code and documentation, as well as continued availability of key resources. For more on this topic, see Novarica's recent executive brief What to Expect When You're Expecting (Your Software Provider to be Acquired).

CONTENTS

Introduction…2
Market Overview…3
Accenture…4
Adminserver…5
COSS…6
Ebix…7
Fiserv…8
Insurance Technologies, Inc.…9
Lewis & Ellis…10
Lord & Carr…11
SunGard…12
Welis…13
Conclusions…14
About Novarica…15