How to Test Insurance Domain Application

Role of Testing – Learn to Test Insurance Domain Application:

You will learn how to test an Insurance domain application and what are the different modules to be tested in an Insurance Application through this tutorial.

Each and every insurance company relies more on various types of software that will help them to run their business. This software application helps them in creating a new policy, enrollment of members, policy administration etc. 

Recommended reading => If you want to learn the basics of Insurance domain, you can read this tutorial. 

Test insurance domain

Insurance Domain Overview

As we all know, the Insurance industry is widely categorized into different sectors like Life Insurance, Automobile Insurance, Property Insurance, Health Insurance etc.

On the other hand, there are some complex functionalities involved like Policy Administration, Claim, Underwriting etc., which make the Insurance domain much different from the other domains.

Software Testing is a very crucial one for an insurance application. Testing proves whether an application is fit for use or not and it performs end to end flow from creating a new policy till the final claim settlement.

All the insurance companies are maintaining IT infrastructure and are considering that they have also made an investment to ensure whether their application runs successfully in the real-time or not.

Testing proves the robustness of an application and hence insurance testing is a most significant one.

Importance of Insurance Application Testing

Nowadays, the Insurance industry is widely spread across various areas like Life, Car, Health, Property, etc. With such a wide range of coverage, they have several software or products as per the end user needs. At times, there are chances for the same insurance product to move well quickly in one part of the country and move slowly in some other parts of the same country.

With such a huge variation, insurance companies consider the demands of their local customers and create products according to their needs.

Now testing becomes a complex task when there is such a requirement where the product features vary ultimately across the same country. So testing an insurance domain application is necessary to ensure if the insurance product is as per the local customer requirements or not.

In this current digital world, each insurance company uses different technologies to maintain their software which in turn will help them to reduce the cost and improve their customer satisfaction. Insurance companies also spend money to keep their customer’s data safe and secure. Thus several Insurance companies have even started to show their footprint through mobile applications.

Insurance Framework

The insurance industry is widely divided into various sub-industries like Life, Auto, Property, and Health etc. Each sub-industry has different functional areas and modules to be tested.

Given below is a sample Insurance framework which includes various modules:

Insurance Framework

[image source]

Different Modules to Test an Insurance Application

Each insurance company is spread across different business areas like Policy Administration, Underwriting, Claim Management System etc. Each area has its own process and standards to be followed. In this section, we will learn about a few important areas which are critical while testing any insurance application.

Here, I have mentioned different Line of Business in an insurance industry and the areas where you need to focus while testing an Insurance application. Of course, there are other functionalities as well in each area which are important and keep varying from one organization to another.

Testing of Claim Admin System

The Claim Administrator software simplifies the claim process for the insurance company and it is also called as “Claim Management System”. These claim management software’s start their workflow from initiation of claim till the final claim settlement.

Claim admin systems help to reduce the cost for the company by using different techniques, tools and removes manual process thereby reducing manual errors etc.

Testing of Claim Admin System involves:

  • Claim Life Cycle
  • Claim assessment
  • Claim processing and transaction
  • Policy surrender processing
  • Maturity processing
  • Payout set-up

Testing Policy Admin System:

The name itself says that it is an admin system for policies management. Customer personal details and their associated coverage details are stored in this policy admin system. As it involves various functionalities for testing, this is considered to be the crucial part of testing.

Few functionalities are listed below:

  • Policy workflows or policy Life Cycle
  • Financial and non-financial transactions
  • Document management and processing
  • Coverage change
  • Premium due date alert
  • Cancellation, renewals of policies
  • Modification of customer personal details
  • Policy lapse processing

Testing of Underwriting Module:

When a person decides to buy a policy, it is the underwriter’s job to assess the risk associated with the person before accepting the application. Underwriting is a risk assessment process in the insurance company which allows the company to evaluate the risk and decides the premium for the insured person accordingly.

Underwriting module mainly includes testing of:

  • Complex Business Rules
  • Rating efficiency
  • Underwriting quality
  • Check medical history
  • Check driving history

Testing of New Business Administration:

Risk Management plays a key role in the success of any insurance company.

From the testing perspective the following pointers are to be considered while testing:

  • Quick and detailed quote to their customers.
  • Provide benefit details to the customer.
  • Check the rate system structure of the competitors.
  • Batch Job schedule and run.

Testing of Policy Quote System:

It is always necessary to provide an initial quote to the customer as per their requirements. There are different types of customer’s and they require different coverage, so it is necessary to go through testing of Policy Quote System.

Following are the important points to be remembered while testing a Policy Quote System:

  • Validate the rate structure which helps in generating a quote.
  • Validate the plans according to the customer needs.
  • Verify the policy effective date.

Tips to Test Insurance Domain Application

Now we will see how testing an insurance application is important with some examples.

In the Insurance industry, there are different roles and permissions given to each agent or broker (here, we will call them as a “user”) who performs/completes their task and then goes to the next phase. No two users will have the same roles or permission which will create conflict during the task completion.

#1) Roles and Permission of the Application:

For Example, let us consider the below roles and responsibility and if any of the roles/responsibility goes incorrect in production then it will create a huge mess for the insurance company.

  • Insurance Agent submits the application for an insurance policy to his customer.
  • Insurance underwriter evaluates the risk and decides whether to accept the application or reject it.
  • Upon acceptance of the risk and application, the policy is being created as per the benefits or plan requested by the customer. The policy creation is performed using the insurance company’s software application

Now imagine, in the above process if any of the steps go wrong and if the policy is created with the plans which were not requested by the customer. OR if the access is granted to an insurance agent for an application acceptance or rejection? If anything goes wrong in the real world then the insurance company loses its faith in the market and it becomes tough for them to continue their business.

This will be a huge loss to the insurance company and they may even lose their market standard. So software testing plays a crucial role in insurance application testing.

In our above example, testing ensures that all the roles and permission are granted to the appropriate user and the end to end flow is performed correctly or not. Software testing is essential to avoid any anomaly in the business and the end user accepts the final quality of the insurance product or insurance software application.

To test any insurance application, you need to have a proficient testing team who is also an expert in the insurance domain.

The above given is just a simple example, there are various areas like claim, annuities, policy administration, Quoting System, Rating Engine, etc where testing is a necessary part to ensure the application flows correctly.

#2) Information Interface:

While testing an insurance application, you need to verify if the information is updated correctly through the front end as well as stored successfully in the back-end system or database. Also, the saved information is fetched without any error on the front end of the database.

#3) Number Factor:

Insurance is a number game and many entities in the insurance domain are sensitive to these numbers.

A small change in the premium may cause a big difference in the end result. So check all the decimal points and appropriate mathematical calculations are important in insurance application testing.

#4) Date Factor:

Dates are as well very much crucial in the insurance application.

Effective Date is the date when the policy will be effective. Even after an amendment to the policy, the effective date will get modified so you need to enter the dates carefully and test if those dates are reflected correctly in the policy plans.

#5) Test end to end Insurance Application:

You need to validate the below points while testing any insurance application:

  • Quote gets generated and the customer accepts those quotes.
  • Policy Number is generated with an appropriate plan in it.
  • All personal details and policy details are updated in the Policy Admin System.
  • Members and their dependents are enrolled under the respective policy.
  • An appropriate commission is generated in the system.
  • Brokers must be able to view their customer’s information through the front end application.
  • Customers must be able to view and modify their details through the online portal.

#6) Think from the Business Perspective:

Understand the insurance business and test the end to end flow correctly. You need to go beyond your limits and think “out of the box” to identify the defects.

Think from the end user point of view and test the application. You need to be very attentive while testing because if a change in any number, date, enrollment details are modified on one screen then it will reflect accordingly on the other screens as well.

Performance Testing in Insurance Domain

Insurance application has several business areas and each area has different validations, checkpoints, Complexities etc. There are critical areas of Claim Management, Policy Admin, Member or broker front-end applications on which maximum transaction or activities are carried out.

Thus, the performance of these applications is the most significant one. And you will thereby gain more knowledge on how to test insurance domain application in the best way through this tutorial.

Performance Testing

There are various activities like multiple claim process, multiple policy renewals on the same day, or broker applications submitted continuously through the front end application, etc., so it is important to test if the server is responding appropriately or not.

For Example, An Insurance application needs to be tested with many claims (let’s say 1000) at a time from multiple hospitals and ensure that the system processes all the claims successfully.

With load testing, it is possible to check the threshold limit and stress testing ensures the maximum peak limit of transactions at which the system fails and recovers successfully from where it failed.

Following is a list of different tools which can be used for Performance Testing of an Insurance application:

  • LoadRunner
  • JMeter
  • WebLoad
  • Silk Performer
  • Rational Performance Tester

Automation Testing in Insurance Domain

Automated software testing is one of the challenges in the Insurance sector.

Deloitte in his report highlighted that the Insurance industry is facing a significant disruption and the traditional business models can pose a challenge to the industry. Efficient testing carried out on any application can significantly reduce the number of defects in production.

Given below are the 3 parts to automate an insurance application or software:

  • Creation of automation framework
  • Writing business test scenarios
  • Assessing the testing state of the software

Key benefits of Test automation of an Insurance application:

  • Consistency: Continuous testing is required to ensure whether the application is working even after modification of the functionalities or not. It is possible with the help of automation testing which runs a test suite without manual errors.
  • Reusability: Automation tests make a test reusable and reduce the cost.
  • Reduces cost and speeds up the time to market
  • Automation becomes highly scalable and is easy to maintain.

Challenges in an Insurance Application Testing

Insurance application is a complex and critical one, and there are various challenges involved during application testing in insurance domain.

Challenges in Insurance app testing

[image source]

The above image shows a few challenges.

Let us quickly understand these challenges:

  • People: Many organizations have a lack of testers with knowledge in insurance domain. Domain knowledge is very important from an end to end perspective as they will be aware of all the business processes.
  • Processes: Quality processes and best practices help any project in its successful implementation. Ignoring such processes and practice may cost huge for the project. Many organizations having lack of best practices and processes may tend to fail.
  • Technology: Different tools and technologies help to reduce the overall cost of the project and in today’s digital world it may not be possible for every project to implement these tools and technology. There are various reasons behind it such as the cost of a tool, knowledge of the technology or tool etc.
  • Regulatory and Compliance: As new technologies are emerging, the rules and regulations for an insurance industry are also revised accordingly. In some cases, there are some complex rules which may even hamper the quality testing of an application.
  • Competition: On time delivery and minimum cost are the key factors to retain the clients and their satisfaction. Emerging technology and providing “new or additional” benefits to the customers along with the project delivery will make you stay ahead in the market competition.
  • Time: In each testing phase, an application should be available in the correct time for testing so that every testing team will get sufficient time to test an application thoroughly.

Test Scenarios for Insurance Application Testing

In this section, we will learn about the various kinds of insurance scenarios which are generally important while testing any insurance application.

Let’s start.

  • Verify if the customer is able to enroll in the policy benefits successfully.
  • Verify if the system allows modifying the existing policy for the addition of a new coverage or plan.
  • Verify if the system is able to modify or update the customer’s personal details.
  • The system should be able to cancel the policy.
  • Verify if the Agent’s commission is calculated correctly.
  • Verify that when the payment is made more than the amount to be paid then the extra amount should be reverted back to the customer.
  • Verify if the system is able to process the payment using NEFT, Cheque method etc.
  • Verify if the process of annuitant change is completed successfully.
  • Verify if a New Payee is successfully updated in the system.
  • Verify if any error message is displayed while adding incorrect rider code in the policy.
  • Verify if the Riders are added successfully to the existing policy.
  • Verify if the member enrollment is processed successfully for a policy.
  • Verify if the rates are generated as per the policy plan and structure.
  • Verify if the policy generated in the Agent system is automatically available in the quoting system.
  • Verify if the Policy amendment is processed successfully.
  • Verify the In force Coverage on the policy.
  • Verify if the Policy can be searched using the Policy number or the Policy Name.
  • Verify if Policy renewal is processed successfully as per the customer’s request.
  • Verify if the Proposal is generated successfully for the associated policy plans and sent to the policyholder.
  • Verify if the claim is processed successfully.
  • Verify if the Policy effective date is updated by adding a new plan.

Sample Test Case for an Insurance Application

I am providing one sample test case based on an imaginary flow which will cover almost every system or an application like Agent System, Admin System, Commission or Broker system, Enrollment System etc.

Please note this flow is on an imaginary basis only.

Step NoDescriptionExpected Result
Step 1On confirmation from the customer, verify if the insurance agent can generate an initial proposal into the systemInitial proposal should be generated as per the customer request.
Step 2Initial “Case” is generated and it navigates to the underwriting system and Quoting systemThe proposal should navigate to quote system in order to generate the policy
Step 3Policy generated successfully with the correct effective date and policy plan as per the customer requirementsAfter appropriate risk calculation, Policy Number should be generated for the customer
Step 4Verify if the Policy is forwarded to the Admin system from the underwriting and Quoting systemAdmin System should now have the policy number and its associated plans
Step 5Verify that all the members, dependents and their details is updated in the enrollment system along with the policy detailsEnrollment system gets updated with the policy details
Step 6Verify that these details are forwarded to the Admin System successfullyNow Admin System should have all the personal details of the Policyholder along with the associated policy and plans
Step 7Admin system verifies all the details and calculates the agent commission and is forwarded to the Commission systemCommission System should be updated with the commission of agent/broker
Step 8Verify if the policy document and premium details along with all the terms and conditions are generatedAll documents should be generated and sent to the policyholder’s address
Step 9Verify if the personal details are modified successfully even after policy enrollmentAfter the policy enrollment the personal details should get updated
Step 10 Verify that new benefits or plans can be added/removed/modified successfullyNew plan should get added/removed/updated successfully in the existing policy
Step 11Verify that effective date of the policy is updated correctly after a modification in the existing policyUpon modification of the existing policy, effective date should get updated correctly
Step 12Verify if the claim request is accepted upon appropriate verificationClaim request should be accepted successfully and transferred to the associated sub-system
Step 13Verify if the claim is processed successfully and the payment is made to the appropriate beneficiary/policyholderPolicyholder/beneficiary should be credited with the claim amount
Step 14Test ends

Conclusion

In this tutorial, we have learned about the different areas of insurance and what type of testing needs to be performed in each area. We have also seen the key aspects of insurance and the different terminologies involved to test insurance domain application.

I hope the scenarios and the sample end to end test case will definitely help you to understand the insurance concepts and its flow from a different application clearly.

Are you are a tester in the Insurance Domain? Would you wish to add something interesting to this tutorial? Feel free to express your thoughts in the comments section below!

Further recommended reading:

3 Comments on “How to Test Insurance Domain Application

  1. 1. Important point in insurance testing is testing of interfaces like payment gateway, sms and email on quote creation, letter generation to customers and MIS reports.
    2. Configuration of products to be tested . Effective usage of test data instead of detailed test plan.

  2. Verify that the policy prints the age, height and/or weight of the customer at the time the policy was submitted and not the current customer data. This depending on the product.

  3. Please create blog on how to test e-com website

Leave a Comment