Insuring financial services success

In terms of major IT successes, one of the things we’re most proud of is that we’ve been able to implement an enterprise-wide solution for linking policy administration and claims handling for a couple of major product lines. We had legacy systems that were disconnected, and our policy admin system didn’t talk to the claims system – which meant that trying to do any form of analysis on information linking the two was very difficult. To help combat this, we’ve implemented a solution that takes a transaction from the initial quote all the way through to the handling of the claim, all through one system. There is a lot more that needs to be integrated – insurance is a very complicated business – but we’ve made a great start and we’ll be looking to build on this in the coming year.

On top of this, process improvement will be a big area of focus for us going in to 2006, as will improvements in data integrity and operational compliance. We need to get better information, take the data we have in various systems and do something with it to make it more meaningful for users and decision-makers. This is one of the major challenges we face.

We’ve done a couple of things with regard to compliance. We did initial process documentation with the help of external consultants, as we realized there was a need for building critical mass right away and our users did not have the time to do all of their documentation objectively in a timely fashion. We also did in-house testing on all of our processes, and have an ongoing system of quarterly process validation where we ask whether the processes that were documented are still in place, to see if there are new processes that need documenting and to check that they are the best processes for the job in hand. To aid us in this, we have created ‘owners’ within each of the business units who are responsible for ongoing documentation, maintenance of documentation and updating of the documentation. So it’s really been a two-step process, but accountability for operational compliance now resides within the business units.

Integration is another key priority for us, and remains a challenging area for the industry as a whole; we are not an exception. We operate in a very dynamic market, so we have to stay nimble and be able to react to market opportunities – yet we have to do it in a very structured and heavily regulated environment. This is a huge challenge, and as we get bigger it becomes increasingly difficult to remain agile. So far we’ve managed our growth very well, but the challenge we have is to continue to grow while at the same time handling both our current transactions and new market opportunities as they come along.

As an industry, the insurance sector is still very disconnected. For instance, the accounting side is not always integrated with the underwriting and claims side of things; the reinsurance element also needs to be better integrated. So if you look at the various ‘buckets’ within insurance, we’ve already integrated underwriting and claims – but we also need to integrate that with accounting, with reinsurance, and with our external partners. Whilst we’ve done a very good job thus far, we’re only really 30-40 percent there; however, I’m expecting that sometime between 2006-2007, we will have connected all the elements together. We’ve just bought a new reinsurance system and are in the process of implementing that; we’ve got ongoing efforts for consolidating all the data from our external partners; we’re looking at replacing our accounting system next year; and we are also considering bringing in a document management system with a layer on top for business process management.

There’s nothing glamorous about the technologies we are looking at; we are focusing on solutions that enable us to link different elements together, such as document management aligned with business process management. What I’d really like to see, however, is somebody put together an end-to-end solution for all of the processes involved within an insurance company. This is a huge opportunity for vendors, because the insurance industry spends billions of dollars processing transactions, and we have not yet perfected a way to do this efficiently.

Having said that, integration is the overarching trend within the industry right now – being able to bring all of the different elements of the business together. I think we’re going to see increasing use of the web as a backbone for this integration movement, both to bring our external partners closer and to give more information back to the customers. Technology is now getting easier to integrate; it’s not as cumbersome as it was 15 years ago to integrate technology, so you can have disparate systems and still be able to piece them together. The biggest inhibitor to technology development may be the availability of time from the business users. We can come up with the technology experts – the programmers, the developers, the analysts and so on – but they can only do so much; we ultimately need to rely on the business users to give us their input, and we’re constantly running up against the fact that they don’t have the time available to help develop those applications because they are too busy with their ‘day jobs’.

What the industry really needs is some form of collaborative process for developing business requirements – a platform into which business users could input their requirements, and that the application developers could use to help them ensure these needs are being met. We are lucky in that the majority of our developers and users reside within the same location and so it is relatively easy for us to piece together solutions because the communication is that much better; however, for many larger organizations with disparate offices spread all over the place, this kind of collaborative approach is just not possible. They require better tools for ensuring the business requirements are communicated to the people developing the applications.