IAG is now in stage two of its insurance platform transformation – Finance – Strategy – Hardware – Software

Nancy J. Delong

IAG is now in the second stage of a extended-operating simplification and transformation of the technologies underpinning its insurance coverage functions, with consolidation of policy and administration methods to a new system predicted to get “the next pair of years”.

Controlling director and CEO Nick Hawkins explained to the company’s FY21 final results briefing that it is making “progress on digital initiatives”, with its “efforts into the long term … underpinned by the development of a solitary core insurance coverage system which we’re rolling out throughout IAG.”

IAG unveiled its intentions to consolidate its statements processing on a GuideWire system again in 2016.

It had comparable consolidation ambitions at the time for its policy processing, but hadn’t made a decision on the place system at that place in time.

The simplification and consolidation is an effort to unpick backoffice complexity in the way IAG operates, which was made as a consequence of a selection of acquisitions above the years.

IAG’s solitary statements method was now are living when Hawkins was appointed CEO in September last yr.

“After finishing stage a single [of the solitary core insurance coverage system], we now have a solitary statements system that can be employed throughout the entire organisation,” Hawkins explained to investors on Wednesday.

“Stage two, which is underway now, will consolidate and simplify multiple policy and administration methods that we have in spot. 

“When we full this operate, we’ll be capable to offer consistent items and expert services to customers where ever they are, on what ever digital system they pick to interact with us.”

Hawkins indicated that IAG is “going down the GuideWire path” for the consolidated policy and administration method.

“That’s now in spot,” he mentioned. “Now we require to migrate multiple methods on to that. That will get the next pair of years.”

IAG mentioned in its slide deck that it had decommissioned “50-plus legacy technologies assets” in FY21.

Some of these are most likely to be purposes and methods that are no more time wanted now that GuideWire is progressively having above these functions.

Powering the scenes

Significantly of what has transpired in the transformation system since it was initially unveiled years ago was explained in a GuideWire ‘InsurTalk’ podcast at the start out of this yr.

“For the previous a few years we’ve been transforming our statements organization, and above the last twelve months we at last turned our attention to the policy system, ultimately re-engineering our income and expert services channel,” IAG’s government general manager for insurance coverage transformation Kylie Burtenshaw explained to the podcast. 

“We are weeks out from our initially go-are living and vastly excited about observing the policy transformation come to lifestyle,” she mentioned at the time.

Burtenshaw mentioned that the organisation skilled a “false start” the place it experimented with to do a great deal much too quickly with the re-platforming effort.

“We basically had a bogus start out and experimented with to deal with the whole insurance coverage stack in a single go,” she mentioned.

“That was much too a great deal for anyone so we stepped again from that and chose to move initially with the statements system. 

“It is the major place in which we can make improvements for our customers. There’s certainly fewer underpinning methods in the statements room so there is a lot less complexity for us to encounter into. It also allowed us to unlock scale benefits. 

“But again to that bogus start out it definitely assisted the organisation to build believe in. 

“The belief in the operate that we would be executing and the get-in to make any transformation a accomplishment is important. So when we attained some self esteem and the transformation of our statements organization had began to around an conclude, we then had a proven monitor file. 

“Our self esteem had been designed and now we were ready to deal with the a lot more complex policy transformation.”

Burtenshaw mentioned the complexity of existing methods at IAG, with efficiently a lot of mainframes in operation, each and every with their own datasets and processes.

“We have grown by a mutual background and we have grown by acquisition, and so we have loads of mainframes, all of diverse ages,” she mentioned.

“We have fifteen [mainframes] in simple fact, and each and every a single of these holds diverse datasets and processes, but when you peel it appropriate again, to fix a property or car or truck, it is basically the same fundamental method.”

As portion of its simplification, IAG re-arranged statements processes from remaining brand-distinct to remaining grouped into “patterns” – “a motor pattern to insure our autos, a home pattern to insure our assets, and ultimately a private personal injury pattern.”

“The way we fix a car or truck doesnt change ultimately in the core, but that pattern is diverse to how we go about fixing someone’s property,” she mentioned.

“You align the fundamental core to these designs and differentiate by the experience layer.”

“In statements, we definitely concentrated on simplification initially,” Burtenshaw mentioned.

“We unwound all of the complexity, we took ourselves again to these designs, and ultimately then to the conclude of that journey we began to accelerate the statements experience.”

The strategy to the policy and administration transformation is a bit diverse, with simplification and user experience improvements developing “in lockstep” as an alternative of separately.

Other technologies works

Elsewhere in its FY21 final results, IAG presented some quantities all-around its ongoing method automation efforts, noting that it had returned “one hundred ten,000 hours of effectiveness … to the organisation by robotic method automation.”

Its FY22 concentrate would see it use a lot more automation and digitisation, specifically throughout income, support and statements.

In its annual report [pdf], IAG mentioned that the firm’s board “has prioritised investments to simplify and improve [its] IT methods, to equally improve management and raise productivity and to help [it] to offer the digital expert services necessary by customers”.

“Around the last a few years, $a hundred and fifty million to $two hundred million each and every yr has been dedicated to this endeavor,” IAG included. 

IAG noted a web reduction of $427 million for FY21, in contrast to a $435 million profit the past yr.

It attributed the consequence to “important a single-off company fees primarily relating to organization interruption, shopper refunds and payroll remediation.”

“These are historical problems we’ve discovered, provisioned for and are correcting – and we are making investments to continue to raise our possibility administration and operational capabilities,” IAG mentioned.

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