Enterprise content management at ING Vysya
ING Vysya Life needed to create a customer-centric business
model to understand its customers needs. It also needed to streamline
operations, reduce cost, focus on growing market segments, and provide a wide
range of services. The insurance company therefore decided to stay ahead of
the pack by implementing Enterprise Content Management (ECM). by Kumar Dawada
ING Vysya Life Insurance Company entered the life insurance industry in India
in September 2001. The liberalisation of the insurance sector in March 2000
paved the way for not only private players but also well-known foreign insurers.
It had to compete with those companies as well as LIC which had been around
for almost half-a-century.
COST AND SERVICE FACTORS
K R Subramanian, COO, ING Vysya Life feels that in a fiercely competitive market
like life insurance, all players deal in similar products. They use the same
Indian mortality assumptions and pricing. The only differentiating factor
is cost leadership and efficient service. We have to issue policies faster and
make sure that normal insurance applications are processed quickly. The Filenet
ECM helps measure the actual time in each segment of activity. We are also able
to take insourcing or outsourcing decisions based on cost. The turnaround time
has drastically fallen. Front-end offices in hundreds of locations can scan
applications and papers and send them to the processing offices by evening.
The people sitting there can feed data and process it. This reduces the processing
time by at least eight hours, says Subramanian.
paradox of a service industry is that it relies upon standardisation but requires
customisation. The insurance application forms and papers were standard
but there was a need to know that it was sent by an individual. Hence, there
was a scope for incorporation of unique features and processing. Parameters
were required to route the data intelligently to the right people, recalls
ING Vysya Life centralised its operations. Being a new industry, we had
to get new people, train them and maintain process purity, so it made business
sense to centralise things. The node sending the applications can be located
anywhere. This helped manage the business despite geographical diversity and
complexity of products and processes. The basic infrastructure laid the foundation
for that, says Subramanian.
Implementing a new technology can be painful. So a strategy was devised to make
users suggest technology instead of thrusting a new technology on them. The
underwriters were asked for suggestions to make their work easier. Even before
the ECM implementation, underwriters had internally developed an underwriting
rating engine working on a crude workflow. The ECM became a logical extension
of that idea on a superior platform. We followed the Japanese methodology and
spent a lot of time on preparation, thinking, brainstorming, gathering requirements
and understanding the implication of other activities. The requirements were
then converted into business and technical specifications. Then a prototype
was created to see how comfortable people were with its usage. As the staff
was already IT-savvy the transition was smoother than expected, confides
The ING Vysya Life ECM implementation has many value-added features, which can
be enabled as required. This addresses scalability issues. The company uses
Life Asia solution for their transaction processing. It has been customised
internally. In the insurance business, it is necessary to maintain records for
several years because life insurance contacts are long-term. It is also sensitive
and needs reliability. The solution uses satellite communication for integrating
the transaction system with sending messages to customers about various schemes,
information and bank payments. It also uses BI tools like Cognos.
The companys strategy is to use the ECM as a basic system and plug
it into various other systems. The Life Asia system and automated rating system
is already plugging into the ECM. People make the biggest mistake by going for
tight integration. Due to that, they are unable to take advantage of future
developments in technology. Our integration approach is focussed on getting
more information from the transaction processing system to overflow instead
of vice-versa. This is because the transaction processing system is a labyrinth.
When you put data into it, many internal validations have to be satisfied but
this takes a lot of effort which does not pay dividends. So, we focussed on
integration from the transaction processing system into the overflow system,
|The company has a customer base of over 1,50,000. The headquarters is
at Bangalore. It has a presence in cities like Ahmedabad, Baroda, Belgaum,
Bhopal, Calicut, Chandigarh, Chennai, Kochi, Coimbatore, Delhi, Goa, Guntur,
Gurgaon, Hubli, Hyderabad, Indore, Jaipur, Kolkata, Ludhiana, Mangalore,
Mumbai, Mysore, Nagpur, Pune, Secunderabad, Surat, Thiruvananthapuram, Vadodara,
Vijaywada, and Vizag. It also has over 10,000 advisors working from 46 branches
(in 30 cities) and has 1,200 plus employees.
The tangible benefit of ECM is that the company is aware of what is going
on. Anyone in any department or the management can find any file, any application
from anywhere in the country and know its status. It also permits parallel processing
and skills-based routing. For instance, a new underwriter can be given simple
cases. The non-tangible benefits include raising employee retention, as their
jobs become easier. It creates enthusiasm in the sales force due to efficient
processing of applications. The biggest benefit is the possibility of decentralising
operations without losing control, which is a necessity in a business like insurance
thats all about managing risks, feels Subramanian.
Subramanian says that in most IT implementations, RoI is not easy to quantify.
We are expecting tangible results within a year. All key employees are
instructed to take a snapshot of key parameters before implementation. These
are then measured after six months. It covers things from employee productivity
per person to turnaround time and customer satisfaction, explains Subramanian.
ROADMAP TO THE FUTURE
We have a state-of-the-art insurance architecture and are trying to standardise
it in terms of service levels and for compliance with the Sarbanes-Oxley Act.
In insurance the raw material and end product are data. We will use IT as a
strategic tool to provide functional value from sales automation, for agency
remuneration, and customer and agency portals, which integrate into the transaction
system through overflows. We also have a clear Business Continuity plan (BCP)
as a part of BS7799 standards and ING security requirements. We are not fully-compliant
but are moving in that direction. We have a Disaster Recovery (DR) site in Hyderabad.
The DR is based on overnight transfer of tapes. We are planning to make it a
warm site in the not too distant future, reveals Subramanian.
WHAT LIES AHEAD
Subramanian feels that there is a need to build awareness about risk management
so that people adopt good risk minimisation methodology. Insurance is a crucial
element of transferring risk. Todays well-informed customers want to spend
an allotted amount intelligently.
Insurance has developed to such an extent that it can shift risk from
insurance to the capital market by means of a methodology called alternate risk
transfer (ART). This includes catastrophe bonds, for instance you get a particular
return if earthquake hits Japan or you get another value as return if an earthquake
does not hit Japan, says Subramanian.
The insurance sector follows a cycle of boom and bust. Too much competition,
reduced margins, major catastrophes and disasters may bankrupt a few companies.
The reinsurance companies prevent insurers from getting into price wars. This
is because insurance is not an annual but a long-term game. They research risk
and advise insurers as well as customers on how best to manage the risks.
Actuary is the life breath of insurance because it determines the pricing and
profitability of any policy. The leading risk management tool for life insurance
is called Prophet. It helps insurance companies model products and has advanced
facilities for profit testing and product valuation. It is already used by over
500 insurance companies worldwide.
Integration is happening between legacy systems, insurers,
reinsurers, brokers, agents and healthcare providers through a data format called
Accord based on XML-based standards. It helps an insurance company to talk to
any application. Suppose a customer comes to the company for insurance.
The company can find out whether he has been accepted by some other company
earlier and if not then why not. The company can access the database and get
the desired information. This creates a ready reference of customers and reduces
the need of detailed scrutiny of applications, explains Subramanian.