LUNOS addresses the problem of bringing new products to market rather elegantly through application of a concept called Product Modeling which produces a Product Specification Diagram (PSD) which is then turned into a plug-in to the system.
Using this technique, the insurance company's products are rapidly introduced to the system without changes to core system code. Product Modeling differentiates LUNOS and Silvermoon solutions fundamentally from others in the industry.
Other systems generally use a set of parameters that can be set by the insurance company to define their products. The values of the parameters are then interpreted at run-time by the solution. This approach provides a feeling of flexibility which is actually false, as it limits the capabilities of the policy administration solution to the behaviour anticipated by its creators.
Products Models are plugged in
Silvermoon's Product Modeling technique provides details of products and associated agreement behaviour in objects which are consumed by the system. As such it does not impose any limitations on what can be defined. Any product imaginable can be created in our solution. Thus, any line of business can be run on the same platform.
Product Modeling externalises the definition of product structure along with the required data, rules, calculation and sub-processes for these products. These elements are all represented in the product model. The product model is then plugged in the policy administration system.
Using the product Modeling approach, a change to one product will only change that product, without impacting the application or any other product. This approach leads to a system that is easier and cheaper to maintain and that will have a longer lifespan than a system developed with traditional approaches.
For companies using and employing IBM's Insurance Application Architecture (IAA), product lifecycles are well understood and subject only to slight variations. The terms and conditions of each insurance product are embodied in rules, calculations and specific logic held outside of the core system but played out strictly under regulation of the product lifecycle.
Product Modeling Benefits
As a consequence, the most fundamental parts of product processes are actually fixed and do not need to be changed. This arrangement is known in IAA as the 'Separation of Concerns' and is a fundamental key to building a solution that:
- Provides a method for bringing new products to market very rapidly without re-programming parts of the system or building any new functionality
- Allows the introduction of new products without any impact on the application of other products
- Allows new product definitions simply to be plugged in.
- Allows a company to run multiple lines of business on the same platform
This approach leads to a system that is easier and cheaper to maintain and that will have a longer lifespan than a system developed with traditional approaches.
With extensibility based product Modeling, which is inherent in the solution, the insurance company that acquires uses the appropriate LUNOS components, or a Silvermoon policy administration solution, will have a system that can be extended to support policy administration in conventional life insurance, in employee benefits, as well as in commercial and personal lines of property and casualty insurance.
For an introduction to the technique of Product Modeling, we refer to the excellent product Modeling guide published by IBM. This product Modeling guide is part of the materials licensed by IBM to its IAA customers.
The core components of the Silvermoon solution work in concert, consuming the building blocks. Shown in the diagram below.
1. The Product Modeller, (working with actuaries and other business personnel), in response to regulatory or competitive pressures, may create a product model or update an existing one.
2. Using IAA Product Modeling techniques, a Product Specification Diagram (PSD) is created.
3. This PSD is consumed by the Generic Agreement Component.
4. The Agreement Lifecycle which is the configuration of an Insurance Agreement Administration Process is consumed by the contract framework.
5. These components work in concert, and with the other IAA components provide services which the business application operates against. Agents, Customers and Employees work with the business application by submitting requests and performing enquiries. Where they see opportunities for product improvements or changes, they feed them through to the Product Modeller and the cycle repeats.
6. This whole arrangement provides the framework for a highly agile Insurance Administration Solution. This architecture is laid out in IAA and realised in the Silvermoon Components.