Enabling the Insurance Value Chain Dennis Vanderlip Financial Services Industry Manager Central and

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Enabling the Insurance Value ChainDennis
VanderlipFinancial Services Industry
ManagerCentral and Eastern EuropeMicrosoft7th
October 2005
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What do CEE insurers say are their top IT
challenges?

• Applications operate in silos and are not well
  connected
• Integration challenges impair agility and
  customer experience
• There has been no uniform integration approach
  across disparate applications
• Insurers reinvent the wheel at every instance,
  end up at a dead end thereby losing the
  opportunity to easily upgrade their increasingly
  expensive legacy applications
• Supporting unique interfaces quickly outgrows the
  available maintenance resources and skills, and
  becomes increasingly unmanageable
• Ageing and increasingly expensive legacy systems
  and platforms

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What is the Business Issue?
Request Quote
Submit Application
Customer
Mail Quote
Issue Policy
Agent/Broker
Issue Quote
Underwriting
Mail Policy
Policy Production
Source TowerGroup
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Whats The Issue?
BACK FORTH incomplete and inaccurate data
INEFFICIENT WORKFLOW multiple handoffs
Request Quote
INEFFICIENT PROCESS AND SYSTEMS multiple silos
Submit Application
Customer
Mail Quote
Limited/no straight through processing
Issue Policy
Agent/Broker
Issue Quote
Underwriting
DELAY QUOTE ISSUES Multiple Handoffs
Mail Policy
Policy Production
REKEY DATA multiple rating systems
DELAY IN POLICY ISSUANCE
Source TowerGroup
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How is the Industry tacking the tough issues?
Source TowerGroup 2005
Objective
Project Examples
Business Driver
IT Spend
48
Streamline processes to reduce manual work

• Core system enhancements reengineering,
  enterprise content mgmt, straight-through-processi
  ng, IT architecture standardization

Operations
Attract and retain profitable producers

• Web services, enterprise incentive compensation,
  illustrations, partner relationship management

Distribution
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Enhance services and delivery channels

• Web services, call centers, customer relationship
  management, communications, delivery channels

Customer Service
16
Achieve profitable and sustainable growth

• Automated underwriting, fraud protection,
  performance analytics, business intelligence,
  financial reporting

Profitability
10
Integrate risk mgmt. with day-to-day operations

• Metrics and measurement, project office tools,
  executive dashboards, compliance, business and IT
  alignment

Governance
8
Strategically manage resources and control costs

• Information technology outsourcing, business
  process outsourcing, global sourcing, processing
  hubs

Outsourcing
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What is the Microsoft Insurance Value Chain?

• Working with our partners and customers, we are
  moving the industry
• from a segregated set of siloed
  non-interoperating business processes to a
  streamlined set of integrated applications and
  workflows all while reducing the overall costs
  of deploying, modifying and
  maintaining those processes through legacy
  modernization.

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What is our economic value proposition?
Driver
Environment IT
Platform
Insurers Business Models Vary
Manufacturer
Distributor
Acquirer
Full Spectrum

• IT Platform capabilities
• 1. Agility
• 2 Integration of partners and channels
• 3 Lower total cost of ownership
• 4 Speedier development and implementation
• 5 Enhanced user and customer experience
• 6 Transparency of data and processes
• 7 Handling of diverse data types

Regulation and ERM
Critical Mass
Customer Service
New Products
Competition
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Microsofts Contribution to improving efficiency
along the value chain

• Recruiting and executing with global, regional
  and local partners,
• with applications that are best-of-breed
  insurance solutions, ranging across the IVC from
  point-of-sale all the way to reinsurance.
• Providing those partners with a framework for
  integrating their applications,based on
  Microsoft .NET Web Services and industry
  standards (like ACORD) for Forms and XML
  transactions.
• Working closely with our partners to reduce the
  integration pain amongst these solutions and the
  customers legacy solution
• Microsoft brings the leading edge methods, tools
  and infrastructure and partnerships with the
  worlds leading systems integrators to enable
  integration

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Insurance Framework
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Business Solution View For Insurance Value Chain
Core Policy Systems
Underwriting
Claims Processing
Multi-channel Distribution, Point of Sale and
Service
Reinsurance
Product Development and Configuration
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IVC Customer case study Global Aerospace

• The worlds largest aerospace insurer, insuring
  the majority of the worlds airline fleet,
  satellite systems and private airplanes with
  operations in 38 countries
• Owned by Berkshire Hathaway
• Gross premiums of 1.5 billion per annum
• Challenges
• Difficulty of doing business globally
• Unified customer view lacking
• Inconsistent underwriting standards
• Pricing based on limited or erroneous data
• The Solution an integrated risk recording and
  customer management based on .Net, delivered by
  Wildnet, a UK based IVC partner

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The worlds largest aerospace insurer, insuring
the majority of the worlds airline fleet,
satellite systems and private airplanes with
operations in 38 countries Owned by Berkshire
Hathaway
Modernize underwriting framework and
improve workflow.

• Book of business has grown 100 over 3 years with
  same headcount
• Quote to Bind Ratio up by 5
• Better selection leads to 10 improvement in
  underwriting results

• Creating a .NET underwriting framework with
  Wildnet
• Next steps planned are
• Opening up of system to full Web services to
  offer new capabilities to brokers and customers
• Mainframe complete migration planned as no longer
  needed
• SharePoint portal to be added to further improve
  underwriting workflow

• Difficulty of doing business globally
• Unified customer view lacking
• Inconsistent underwriting standards
• Pricing based on limited or erroneous data

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BizTalk Server, with its use of XML, enables us
to integrate with client systems in whatever way
is availableIf we want to add a new client
system, we just need an adapter and the rest of
the system works. Mike MacKenzie, SVP
Systems Countrywide case study 2004 (Insurance
division Balboa) Among worlds largest lending
institutions with over 10 million loans. Balboa
its insurance subsidiary
Integrate with client systems and improve service
in highly scalable environments

• Business rules engine enables automated workflow
• Automated interface establishes status of loan
• Orchestration determines if exception or
  automatic
• Adapter connections made to client legacy system
• Business Activity Monitoring enables clients and
  Countrywide to address exception processing
• Results show increased customer service along
  with tighter partnership and higher retention
  of clients

• Implement BizTalk server to handle communications
  with client systems
• With IVC Partner Wildnet

• Need to verify/ sell coverage
• Over 100,000 daily documents
• All coming from different institutions
• All requiring unique system interfaces
• Customer service suffering

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Enabling the Insurance Value ChainContactRol
ands Ozolinsrolands.ozolins_at_microsoft.com