The data model difference: how Socotra’s superpower helps insurers adapt at the speed of change

Written by Sandy Smith, Product Marketing Manager at Socotra

Despite years of massive investment, much of the insurance industry still runs on highly customized and rigid platforms mired in layers of outdated code. The result? Painfully slow and expensive product development that, post-launch, becomes equally slow and expensive to change, forcing insurers to eventually sell outdated products. That’s no way to serve customers and stay competitive.

Now, imagine spinning up new products in months, not years, and when market conditions evolve, instantly iterating and updating those products, so they never become obsolete. Wouldn’t that be a better way to keep customers happy and competitors at bay?

Responding at the speed of the market means eliminating the constraints of rigid legacy systems and adopting next-generation technology that enables faster product innovation and frequent, worry-free updates.

At Socotra, our flexible data model is the foundation of our platform and the facilitator of innovation and rapid change for insurers worldwide. Here’s how we partner with insurers to help them quickly create any product they can dream of, safely manage product and policy changes, and capitalize on emerging market trends to improve business outcomes.

Create any product, as simple or complex as needed

The world is changing fast. In response to travel resuming, Chubb Insurance recently announced its “Pay as You Roam” travel insurance product. And with the proliferation of connected vehicles, Root Insurance launched RootReady, allowing drivers to receive a fair and fast quote based on existing driving data from their connected car. The way insurers prepare for these ever-changing marketplace unknowns is not by trying to predict it but by becoming agile.

Socotra’s data model is inherently flexible and designed to seamlessly support any product, geography, and distribution channel within a single platform. We don’t force our customers to configure their products a certain way based on a predetermined structure. Instead, we’ve created a very straightforward hierarchy that includes four levels.

1. Policyholder (the insured)
2. Policy (the insurance contract for the policyholder)
3. Exposure (what is being covered)
4. Peril (causes of loss or the coverage)

Socotra’s data model hierarchy works for developing any product.

This flexible structure works for any product and can be extended at multiple levels to accommodate an insurer’s specific business needs. Unlike rigid legacy software that’s built for a specific product, Socotra’s data model gives insurers the freedom to define these categories to fit any insurance product. By removing those restrictions, insurers can focus on creating exactly the products and experiences their policyholders want, in any region or channel.

Additionally, every aspect of our platform is intentionally integrated, allowing insurers to configure product definitions in one place that automatically carries over to every module across the entire policy lifecycle (e.g., underwriting, claims, billing). This capability saves our customers valuable time and money and is one reason why insurance companies using Socotra launch three times faster and save 50% on implementation costs.

Make worry-free product changes and adapt to market demands

Socotra’s flexible data model enables insurers to not only create and launch new products easily, but also make fast and simple updates to stay compliant, competitive, and responsive to ever-changing industry and customer demands. Over time, insurance products need to evolve—the data, documents, ratings, and structure associated with an insurance product will change—and there must be a controlled and worry-free way to handle product changes that don’t conflict with the existing policy data.

With legacy software, when insurance companies change their products or upgrade their software, they need to pay the software vendor not only for the updates but also to migrate their data, which takes significant resources and risks mismatched or lost policy data. This means product changes on legacy platforms can take months, even years. With Socotra, insurers can pull up their product configuration, make a change, and deploy those changes in a matter of minutes.

Socotra’s cohesive platform keeps data intact through all platform upgrades and product iterations. Insurance companies can deploy new versions of their products whenever they want. Our sophisticated data model will safely manage those changes without breaking existing policy, claims, and policyholder data. And it allows for safe upgrades that don’t require creating a separate product or adopting a newer version of the software, eliminating the need for migrating oceans of existing policy data over to the latest version.

Seamlessly track policy changes including out-of-sequence endorsements

Like insurance products, insurance policies are not static: either the insured or insurer may need to make changes. And those changes need to be tracked so that insurers can answer questions like:

When was a transaction initiated (e.g., endorsements, renewals, cancellations), and when did it become in force?
What did the policy say on date X about coverage on date Y?
How are premiums allocated across various coverage segments?

Depending on which core technology vendor an insurer chooses, their data model can either support these changes or create a large intractable mess. Chosen poorly, there will be data strewn everywhere, which makes interpreting your data near impossible. Imagine having a claims manager unable to determine which coverage is the most recent because there’s no clear historical record that includes the original policy and its endorsements. Is the claims payout correct?

For each policy endorsement, some legacy systems do little more than make a copy of the original policy, the endorsement, and the new policy, resulting in multiple copies of the policy. Pile on additional endorsements and renewals, and it becomes very difficult to accurately track policy changes and determine what’s current.

Socotra’s data model brings order to chaos by capturing all changes and amending the policy without disrupting historical records. When a policy change is made, Socotra’s data model can track these changes not just at the policy level but also at the exposure and peril levels without disturbing the original policy data. This means your underwriters, insurance adjusters, and data managers have an understandable record of all policy transactions from inception, including out-of-sequence endorsements.