(Image source: Cadillac.)
Constellation Insurance (Cincinnati) was looking to grow its mortgage portfolio but found that its loan management software was not up to the challenge. Used by the company’s Investment Accounting department, the legacy software also fell short in terms of user experience, process efficiency and upgrade path. In fall 2022, the company decided to replace its current software with SS&C Technologies (Windsor, Conn.) Precision LM software.
Craig Bisher, Assistant Vice President, Investment Accounting Systems and Operations, Constellation Insurance.
“Our processes were being limited in large part due to the cumbersome nature of extracting data from the system,” comments Craig Bisher, Assistant Vice President, Investment Accounting Systems and Operations, Constellation Insurance. “We needed a solution that would allow us to track our loans from origination through the servicing and accounting side.”
Other departments were dependent on Investment Accounting to pull the data, and while workarounds were developed to improve routine reporting, this left other departments needing the system’s data dependent on a small number of professionals with specific knowledge. “In a way, the data extraction capabilities were paramount as we wanted to eliminate this dependency,” Bisher says.
The legacy technology was also suboptimal in terms of user experience. “We specifically wanted expanded functionality like data reporting for internal users in both Servicing and Accounting areas,” Bisher relates. “The external user experience became a focal point when the mortgages team attended the MBA’s Commercial/Multifamily Servicing and Technology Conference in May 2022.”
Constellation was also faced by a lack of support, as its current vendor stopped development of its product. “The lack of development left customers at risk to regulatory change, CECL being the most current pressing issue,” Bisher explains. “We were having to “Band-Aid” certain processes, both technical and procedural.”
Given the goal to expand its mortgage portfolio, Constellation determined that it would either need better technology or more staff. “We needed added scalability and flexibility, and the additional cost of moving to this software was less than an additional full-time employee,” says Amanda Hollingsworth, Manager, Loan Closings and Administration, Constellation Insurance.
Constellation began the search for an alternative solution in May 2021, with an emphasis on a vendor who would be a partner to the insurer. “We wanted a solution that would allow us to pull up information or run reports with the touch of a button versus having to search through various databases and systems and piece everything together,” Hollingsworth recalls.
The ‘Cadillac’ of Mortgage Loan Systems
During the search, Constellation kept hearing SS&C’s Precision LM described as the “Cadillac” of mortgage loan systems. “My own research supported that statement,” Hollingsworth reports. “Other companies were able to offer various components that Precision LM offers, but no other system was able to offer the combination of all components in a way best suited for a life insurance company mortgage lender.”
In Spring of 2022, Constellation created a cross-functional group including its Investment and IT departments to complete its evaluation of the SS&C software with reference to the four criteria the carrier had identified: user experience, process efficiency, software development/support and suitability for growing the mortgage portfolio.
Amanda Hollingsworth, Manager, Loan Closings and Administration, Constellation Insurance.
“In the Fall of 2022, after completing our internal review process the decision was made to pursue SS&C’s Precision LM software as a direct replacement for our current software,” Hollingsworth reports. “A formal cross-functional project team was setup in late 2022 and estimates on implementation were revised with the project formally starting in January 2023.”
The implementation project is ongoing, but Precision LM capabilities has already made a stark contrast to the previous system in terms of the improvements and possibilities it brings. “Whereas our former software forced us to build processes around the software limitations, the flexibility of the Precision LM software provides many options for us to explore and build processes that will be most beneficial for our company,” Bisher comments.
“The biggest obstacle we needed to overcome was understanding the difference in how we handled our mortgage portfolio because of the limitations we had and how we should or would like to handle the processes around the mortgage portfolio,” Bisher adds. “Scope creep is something we are keeping a very close eye on. Clearly, you discover more efficient methods of completing tasks or arrive at new ideas. It was easy to see how some of the processes could change both up and down stream but were not in scope.”
Constellation plans to have all its loan information pulled into Precision LM’s system by early April. “We will run both our existing accounting system and Precision LM in parallel through the end of the year and will officially make the switch to only using Precision LM on January 1, 2024,” Hollingsworth reports.
Primary and Secondary Benefits
Many benefits of the solution are already apparent with regard to the four criteria established by Constellation. Bisher notes that there are also secondary benefits. “Constellation is not a huge company and we need to stay cognizant of key personnel limitations,” he says. “We will decrease our personnel risk by having a wider user base with a lower technical expertise need.”
Also, the solution will be hosted as opposed to the current onsite installation, removing a dependency on specific skill sets needed from IT.
Constellation regards SS&C’s active ongoing development of the solution as a “critical” benefit, and one obviating the need to develop workarounds or “Band-Aid” solutions. “SS&C is also our vendor for a software called AWD. There are additional integration benefits there as well,” Hollingsworth notes.
The SS&C software also represents an economical solution in meeting Constellation’s criteria. “Aside from the upfront cost of the software and implementation, Precision LM represents an additional yearly cost of less than $100k,” Bisher explains. “That number includes a hosting charge of approximately $50k/year which reduces our dependency on critical IT personnel and removes the need for us to maintain the system.”
Constellation Insurance Selects SS&C to Scale Commercial Mortgage Operation
Ohio National Engages Accenture to Accelerate Technology Modernization
RLI Insurance Migrates to SS&C’s Singularity Smart Investment and Accounting Platform