OneBeacon Taps Sapiens to Support Turnaround

The next step in the turnaround of OneBeacon (Boston)—the former CGU, which was acquired last year by holding company Hamilton, Bermuda-based White Mountains Group, Ltd.—will be the implementation of a Web-enabled policy administration system by Sapiens International Corp. (Rehovot, Israel).

The solution is being built on an existing policy administration framework built by Sapiens for OneBeacon's commercial lines P&C business. The carrier is now looking to Sapiens to extend functionality to support additional lines of business and interface with internal and third-party systems, utilizing such technologies as IBM's WebSphere and Sapiens' eMerge rules-based technology.

"We're completing the IAF insurance application framework, which will be a configuration engine for product delivery, in order to handle multiple lines of business and product. We're also adding new component technology which will expose all this to the Web, so that we can have our agents utilize the system, as well as have it operate on the company intranet for our employees," says Arne Herenstein, OneBeacon's vice president for applications development. "The original product performed very well for us, with high reliability and responsiveness. We're building on that ability and now increasing its capacity as a product development tool, as well as an underwriting and administration system."

The solution will be built in phases beginning early in 2003 and ending later in the year. Upon its completion, "we will then proceed to retire all of the old legacy systems that came from General Accident and Commercial Union" (CGU predecessor companies), says Mike Natan, CIO, OneBeacon.

In terms of the benefits the enhanced framework will afford agents and, ultimately, end customers, Natan says "it will be easy to use, very intuitive and responsive in terms of requiring a minimal amount of time to get an outcome." The primary strategic advantage is that the system is far less costly than alternatives. "The closest option was two times that price and on a far longer delivery schedule," Natan adds. "We will have the first application in production in less than a year—that's unheard of in this business."

Natan expects a return on investment in under two years, "primarily because of the large number of systems we'll be retiring and the related maintenance costs we'll be eliminating," he says. Though such results were not included in the OneBeacon's IT department's ROI analysis, Natan says that "if you were to factor in some of the softer benefits, such as enhanced performance and productivity in the field, the return would be even faster."

The commercial lines initiative will cost about $16 million including internal costs, according to Natan. The firm will most likely subsequently move on to personal lines, at a cost of another approximately $10 million. The value of the contract is estimated at roughly $6 million for Sapiens for the commercial lines project, and another approximately $6 million for personal lines.

The OneBeacon deal represents a departure for Sapiens, according to Larry Goldberg, the company's director, Americas Solutions Group. "It's the beginning of a change of focus at Sapiens from a solution provider to an application provider in the insurance space," he asserts. Once the OneBeacon project is completed, "it will be offered as a framework which will be offered to other insurance companies in much the same way that we built it for OneBeacon."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio