Automated Validation of Insurance Applications against Calculation Specifications

TL;DR

This paper introduces a low-code, no-code automated method for validating insurance policy calculations against specifications, significantly reducing manual effort and errors during system transformation.

Contribution

It presents a novel automated validation technique that replaces manual QA, improving efficiency and accuracy in insurance system transformations.

Findings

Achieved approximately 92% effort savings compared to manual validation.

Validated on 12 real-world calculations across 254 policies.

Effective in detecting inconsistencies in policy implementation.

Abstract

Insurance companies rely on their Legacy Insurance System (LIS) to govern day-to-day operations. These LIS operate as per the companys business rules that are formally specified in Calculation Specification (CS) sheets. To meet ever-changing business demands, insurance companies are increasingly transforming their outdated LIS to modern Policy Administration Systems (PAS). Quality Assurance (QA) of such PAS involves manual validation of calculations implementation against the corresponding CS sheets from the LIS. This manual QA approach is effort-intensive and error-prone, which may fail to detect inconsistencies in PAS implementations and ultimately result in monetary loss. To address this challenge, we propose a novel low-code no-code technique to automatically validate PAS implementation against CS sheets. Our technique has been evaluated on a digital transformation project of a large insurance company on 12 real-world calculations through 254 policies. The evaluation resulted in effort savings of approximately 92 percent against the conventional manual validation approach.