Testing Insurance Applications
Insurance Companies rely
heavily on Software to run their business. Software Systems helps them to deal
with various insurance activities like developing standard policy forms,
handling billing process, managing customer's data, rendering quality services
to the customer, coordinating between branches and so on.
Though this software is
designed to meet the customer's expectations, its durability and consistency
needs to be tested before its actual deployment. Software testing assures the
quality of the insurance software by identifying bugs before go-live.
What is Domain in Testing?
Domain is nothing but the
industry for which the software testing project is created. When we talk about
software project or development, this term is often referred. For example,
Insurance domain, Banking domain, Retail Domain, Health Care Domain, etc.
Usually, while developing
any specific domain project, domain expert help is sought out. Domain expert
are master of the subject, and he may know the inside-out of the product or
application.
Why Domain Knowledge
Matters?
Domain knowledge is
quintessential for testing any software product, and it has its own benefits
like
What is Insurance? Type of Insurance
Insurance is defined as
the equitable transfer of the risk of a loss from one entity to another in
exchange for payment. Insurance Company, which sells the policy is referred as
INSURER while the person or company who avails the policy is called the
INSURED.
Insurance policies are
usually classified into two categories, and insurer buy these policies as per
their requirement and budget.
However, there are other
types of insurance that falls under these categories
·
Unemployment insurance
·
Social Security
·
Workers Compensation
What is Premium? How is
Premium calculated?
Premium is defined as the
amount to be charged for a certain amount of insurance coverage or policy the
insurer has bought.
Premium for the insurance
is determined by on the basis of two factors
·
The frequency of claims
·
The Severity of claims
(Cost of each claim)
For example, we will see
how insurance system works,
Suppose an insurance
company provides insurance to all houses in a village
Home Insurance
|
Amount
|
Total number of house in village
|
= 1000
|
Value of each house
|
= $ 800
|
Contribution of each house owner as
premium
|
= $ 8
|
Total Premium Collected
|
= $8000
|
Statistically, it has
calculated that in case of fire a maximum of 10 villages are burnt which it
need to compensate.
So incase, of fire, it
will have to pay 10 house $800 which comes $8000 equal to the premium it
collected.
The risk of 10 house
owners is spread over 1000 house owner in the village hence reducing the burden
on any one of the owner.
In case of no fire in a
particular year, the entire sum goes to its profit while if more than 10 houses
burn the insurer will incur a loss.
Testing required in
different process area of Insurance
Testing can mitigate the
risk of business disruption during and after deployment of software. There are
many branches of an insurance company that requires testing.
·
Policy Administration
Systems
·
Claim Management Systems
·
Distribution Management
Systems
·
Investment Management
Systems
·
Third party
Administration Systems
·
Risk Management Solutions
·
Regulatory and Compliance
·
Actuarial Systems
(Valuation & Pricing)
What to Test in Insurance?
The insurance sector is a
network of small units that deals directly or indirectly with processing
claims. For smooth functioning of an insurance company, it is necessary that
each of this unit is tested rigorously before it is sync together to deliver
the desired outcome. The testing includes
·
Call Center
|
·
IVR integration testing
·
Call routing and assignment
·
Security and access
·
Reflexive Questions
|
·
Policy Serving
|
·
Policy life cycle testing
·
Financial and Non-financial policy
changes
·
Policy lapse and Re-instatement
·
Policy aging-run cycles
·
Premium due alerts
·
Valuation of NPV/NAV
|
·
Claims
|
·
Claims triage and assignment
·
Testing claims life cycle
·
Claims accounting/reserving
·
Third party EDI/messaging
|
·
Direct channel
|
·
Mobile access
·
Cross browser/cross platform
accessibility
·
Application performance
·
Usability of application
|
·
Reports/BI
|
·
Behaving to regulatory requirements
·
Generate quality data for reporting
·
Create bulk data for roll-up reports
·
Testing formula based fields in
reports
|
·
Underwriting
|
·
Underwriting quality
·
Manual and Straight through
processing
·
Complex business rules
·
Rating efficiency
·
Requirements Management (Vendor
Interfacing)
|
·
Integration
|
·
Data integration
·
Complex interface integration
·
Source/Destination formats
·
Production like interface
·
Web service pull/push efficiency
|
·
New Business
|
·
Validate rates-factor combinations
·
Batch job schedules and runs
·
Commissioning calculations
settlements
·
Quick and detailed quote
·
Benefit illustration
·
Benefit summary validation
·
Quick and detailed quote
|
Sample Test Case for
Insurance Application Testing
Sr#
|
Test Cases for Insurance Application
|
1
|
Validate claims rule
|
2
|
Ensure that claim can occur to the
maximum and minimum payment
|
3
|
Verify data is transferred accurately
to all sub-systems including accounts and reporting.
|
4
|
Check that the claims can be
processed via all channels example web, mobile, calls, etc
|
5
|
Test for 100% coverage and accuracy
in calculations determining premium rates
|
6
|
Make sure formula for calculating
dividend and paid up values gives correct value
|
7
|
Verify surrender values are
calculated as per the policy requirement
|
8
|
Verify fiduciary details and
bookkeeping requirements
|
9
|
Test complex scenarios for policy
lapse and revivals
|
10
|
Test various conditions for
non-forfeiture value
|
11
|
Test scenarios for policy termination
|
12
|
Verify general ledger account behave
same as to reconcile with subsidiary ledger
|
13
|
Test calculation of net liability for
valuation
|
14
|
Test conditions for extended term
insurance
|
15
|
Verify policy for a non-forfeiture
option
|
16
|
Check different insurance product
term behaves as expected
|
17
|
Verify premium value as per product
plan
|
18
|
Test automatic messaging system to inform
customer about new products
|
19
|
Validate all the data entered by
users as it progresses through the workflow to trigger warnings, compliance,
notification and other workflow events
|
20
|
Verify insurance document template
supports the document format like MS-Word
|
21
|
Test system for generating invoice
automatically and send it to customer through e-mail
|
