Enabling Australian Life Insurer Growth

Enabling Australian Life Insurer Growth – New Core Systems Capability Creates Real Market Advantages.

Challenges Faced by Australian Insurers

Australian insurance carriers are adapting to increasingly restrictive regulatory requirements enacted to increase consumer protections. At the same time, customer needs and expectations are evolving and the market for older, traditional products is shrinking. Carriers have a strong need to create new products that address those intersecting forces—but they are hampered by their aging Policy Administration Systems (PAS).

Australian insurers face a multitude of challenges created by this aging technology:

  • The modern life insurer seeks to implement true digital solutions like reflexive questionnaires, access to data across multiple PAS, integrated underwriting and Straight-Through-Processing (STP). However, implementing these transformational solutions is difficult when data is siloed in legacy core systems that lack API capabilities.
  • Australian Life Insurers need to differentiate on product / product differentiation in a crowded market. They are also slow to market because the development path is made difficult by limitations imposed by legacy PAS.
  • Insurers need to leverage business-rules-driven PAS to automate and maximise productivity.
  • Currently, operational functionality is still very manual, and the time required to complete many tasks is too long. As a result, the cost per transaction is too high.
  • The need to migrate data from legacy systems creates perceived data risk—and real data risk if attempted by inexperienced teams. This is a critical problem because data is currently siloed in legacy PAS and hard to access for use in most new advisor and customer facing solutions or internal analytics packages.

In order to realize the full potential of their digital transformation, reduce costs, increase product flexibility and increase relevance to potential customers Australian insurers will need to implement new, modern PAS solutions and retire the old systems that have been holding them back.

One insurer’s experience with PAS modernization

One insurer in Australia has clearly demonstrated the scale of benefits that can be derived from the implementation of a modern PAS and the migration of data off the old systems. The company has achieved significant growth over the past three years by adopting innovative technologies such as the Equisoft/manage PAS solution and Equisoft’s illustration, eApp and advisor and client self-service portal. These solutions have been especially beneficial because they are tried and tested in the Australian market from the perspective of suitability for the market and regulatory conditions.

Since the implementation of their new solution the company has experienced:

  • Reduction in administrative SLA to enhance customer service.
  • Reduction in operational resources
  • Ease of implementation of rate changes
  • Ability for adviser and customer to self service
  • Automation of operational functionality
  • Consistency in customer experience
  • Increased speed to market
  • Multi-channeled integration with third party platforms

Unique features of the Equisoft/manage solution that enabled those improvements

Those benefits came from a variety of new capabilities that the carrier’s new PAS delivered.

A. Data Aggregation and Management

Central to the efficacy of any policy administration system is its ability to seamlessly aggregate and manage data. Modern systems leverage advanced data management techniques, enabling insurers to consolidate vast volumes of information from disparate sources into a unified repository like an Operational Data Store. This consolidated data serves as a strategic asset, empowering insurers with comprehensive insights into customer behavior, market trends, and risk profiles.

When large insurance companies, with a lot of different policy admin systems, CRMs and ERPs, try to aggregate their data they often run into a host of challenges. The evolution of business rules and the addition of new data fields over time create inconsistent data structures. What is needed is a consistent data schema and an Operational Data Store (ODS) in which data can automatically be translated into a data structure that is usable by all the solutions that require the data.

By harnessing the power of data aggregation, insurers can enhance underwriting accuracy, streamline claims processing, and personalize customer interactions. Furthermore, robust data management capabilities facilitate regulatory compliance, ensuring that insurers adhere to stringent data protection and privacy regulations such as the General Data Protection Regulation (GDPR) and the Australian Privacy Principles (APPs).

B. Automation and Workflow Optimization

The manual processes inherent in legacy policy administration systems create significant bottlenecks to operational efficiency. Modern systems mitigate this challenge by offering extensive automation and workflow optimization capabilities. By automating routine tasks such as policy issuance, premium calculations, and renewals, insurers can significantly reduce processing times, minimize errors, and enhance overall productivity.

Moreover, modern policy administration systems enable insurers to streamline complex workflows through customizable rules engines and business process orchestration. This flexibility empowers insurers to adapt swiftly to evolving market dynamics and regulatory requirements, thereby maintaining a competitive edge in an ever-changing landscape.

C. Integration Capabilities

Interoperability is paramount in today's interconnected ecosystem, where insurers rely on a myriad of internal and external systems to deliver seamless end-to-end services. Modern policy administration systems excel in this regard, offering robust integration capabilities that facilitate seamless communication and data exchange across diverse platforms and applications.

Whether integrating with core systems such as customer relationship management (CRM) and enterprise resource planning (ERP) or external data sources such as third-party underwriting platforms and regulatory databases, modern systems provide a unified framework that fosters interoperability and data consistency. This interoperability not only enhances operational efficiency but also enables insurers to deliver superior customer experiences by providing real-time access to relevant information and services.

Underwriting integration enables straight through processing for complex policies

The Equisoft/manage underwriting integration is very advanced. It connects the illustration to the eApp and then into the underwriting module. The underwriting questions can be asked via an online D2C site, and also directly by the advisor or call center. The questions are reflexive – so they change depending on how the rules were configured. As well the rules can be configured to make underwriting decisions, even in complex cases. For instance, an applicant who reports that their mother died of cancer may be automatically offered a policy with an adjusted term or an exclusion for that disease.

These configurations are enabling the automation of the end-to-end process to allow for straight-through-processing on complex cases.

The Equisoft/manage solution also includes more than forty levels of integrations, many tailored to the Australian market, including:

  • Australian Taxation Office (ATO) reporting and compliance for insurance/superannuation.
  • ATO SuperStream, ATO SuperTICK, SMSF Member TICK and Fund Verification Service (FVS).
  • IRESS XPlan, Super Connector and Acurity (adviser, wealth, and superannuation tools)
  • Oracle Fusion support for GL and Finance modules with GL account balancing checks.
  • Document Management Systems (DMS) including Virsaic, DocuShare and SharePoint.
  • Customer Relationship Systems (CRM) including Dynamics CRM and Equisoft Connect.
  • Underwriting Rules Engine support for point-of-sale, revised-terms and referred cases.
  • Mail address auto-completion, formatting, correction, lookup, and validation services. 
  • PayShield Credit card tokenization to remove PCI/DSS audit/compliance requirement. 
  • NAB Banking Payments, Disbursement and Statement Processing with Auto-Matching.
  • Australian Business Number (ABN) and Tax File Number (TFN) Identification and Verification.
  • Tele-Interview and adviser booking calendar with client call-back scheduling features.
  • Reflexive personal statement interviews with underwriting rules engine integrations.
  • Client self-service security token support for personal statements and health surveys.
  • Data Warehouse, Staging, ETL, Data Lake, Data Share and Data Factory components.
  • External accounting and financial reconciliation services support for daily data feeds.
  • Key Vault Secrets/Certificates, Custom Cryptography, BYO Key and Tri-Secret Security.
  • Integrated application insights, monitoring, reporting and stakeholder notifications.
  • Batch Orchestration with support for Directed Acyclic Graph (DAG) job dependencies.
  • Jade Platform and API Management Services to support custom external applications.

D. Scalability and Adaptability

The scalability and adaptability of a policy administration system are crucial factors in supporting the long-term growth and evolution of an insurance enterprise. Modern systems are designed to scale seamlessly to accommodate fluctuations in workload and transaction volumes, ensuring uninterrupted performance and service delivery even in the face of exponential growth or unforeseen market disruptions.

Furthermore, modern policy administration systems are inherently agile and adaptable, capable of rapidly incorporating new product lines, business rules, and regulatory requirements without the need for extensive customizations or costly IT interventions. This agility enables insurers to stay ahead of the curve, swiftly responding to changing customer preferences, market trends, and regulatory mandates, thereby maintaining a competitive advantage in an increasingly dynamic and competitive landscape.

Ease of configuration and carrier autonomy

The Equisoft/design configuration tool is the state-of-the-art development front end. It simplifies and expedites configurations and enables the creation of configuration templates for different regions. This state-of-the-art Integrated Development Platform (IDE) enables non-IT staff to make quick configuration changes using business rules. This means carriers can take control of product changes and development and gain autonomy from their PAS vendor when it comes to configuration and innovation.

Specific configurations for Australia

These configurations can enable carriers to create very flexible products and services that better serve the needs of a wide variety of consumers. For instance, they can accommodate insurance in superannuation funds. It allows for split ownership of a policy. It enables a wide array of passive and active payment options including rollovers and automated debit. It can set up products so that insurance can be paid for through a superannuation fund delivering real tax benefits.

Meets high compliance reporting standards

Superannuation funds have very high government reporting regulations. In order meet tax regulation and reporting requirements around rollovers and transfers between, Equisoft/manage has built specific APIs that ensure compliance.

Wrap up: The market response

The market has positively responded to the insurer’s initiatives. Their ability to quickly roll out new products, tailored to current consumer needs, has given them a competitive edge in the Australian insurance sector. This success story underscores the importance of investing in modern PAS solutions for insurance carriers looking to stay relevant and competitive in today's rapidly evolving market.

Replacing legacy PAS environments with modern solutions enriches the entirety of a carrier’s digital transformation. APIs, easy configurations and pre-built integrations make the system easy to connect to modern digital solutions and greatly increases its functionality. As the insurer experienced, it can revolutionize product innovation, improve CX and spur significant sales growth.

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