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New Policy Admin System Fuels Trust-Based Pay-as-You-Drive Launch

Sydney-based Real Insurance is the first to market, worldwide, with trust-based PAYD coverage thanks largely to a new policy admin suite.

Seeing an opportunity to streamline system modernization, Real Insurance adopted its parent company's policy administration platform. But the P&C carrier quickly realized the error of its ways. "We implemented our corporate parent's legacy solution in early 2006," recalls Markus Strauss, Real's head of IT. "By October it was clear that the solution wouldn't support our long-term needs or our short-term plans."

Sydney-based Real, a division of the Hollard Group (Johannesburg; US$2 billion in total assets), wanted to be the first to market, worldwide, with trust-based "pay-as-you-drive" (PAYD) auto insurance, for which customers provided odometer readings rather than relying on a telemetry device, Strauss reports. "Our ability, as a small organization, to develop a next-generation product was a major effort, so we needed a flexible, scalable and proven core systems platform," he explains.

By March 2007 37 policy admin options had been winnowed to four finalists. "Only Exigen Insurance Solutions' [San Francisco] Exigen Suite was architected, from the ground up, to be Java-based and to run on open source operating systems," Strauss remarks. "In addition, the philosophical alignment of our two companies cannot be understated. This led to establishing a commercial model of shared risk and reward that is very different from traditional fee-for service."

Although Real envisioned all business lines moving onto the new platform, it began with the PAYD product. Ironically, Real's existing hardware-agnostic Microsoft (Redmond, Wash.) Windows Server 2003 and SQL database environment was oversized due to recent investments for its parent's system. "Therefore, we decided to become the [open source] Suite's first Windows/SQL deployment," notes Strauss. "This minimized changes to our infrastructure while giving us the flexibility to move to a Linux/Oracle environment, should we wish to do so in the future."

A Global Collaboration

The implementation kicked off in October 2007 using the agile development model. Real devoted five employees to the project full time and 10 individuals part-time as well as an outsourced Web development team. The vendor contributed resources from San Francisco, New York, Lithuania and Australia. "With people spread around the world there were issues around keeping the teams aligned," Strauss admits. "However, it was very much a collaborative effort, where we actually helped create our solution rather than just integrate a platform."

Trust-based business and regulatory details were fleshed out as the enabling technology was developed. "We had conceptualized the product and incumbent processes, but the [business] specifics were established as we proceeded," says Strauss. "In practice, this meant making compromises to keep the momentum moving forward and then circling back as necessary to address outstanding requirements."

Nonetheless, Real accomplished its first-to-market goal, launching PAYD at a critical moment in July 2008. "We introduced PAYD just as the global [financial] crisis hit, when people were looking for ways to minimize expenses," Strauss comments. "As a result, we're running about 15 percent ahead of our original PAYD business plan."

There also were unanticipated rewards. "Although electronic document creation and management is bundled with the system, we didn't comprehend the benefit at the beginning," notes Strauss. "But document automation and workflow management have provided unexpected efficiencies that have definitely improved our organizational productivity."

Since the initial deployment, Real has added Exigen Insurance Solution's claims module to the installed system and is preparing to migrate the balance of its business lines. "Just the fact that we've adapted a packaged technology solution to our trust-based product, when everything else is telemetry-based, is a testament to the architecture and vision of that solution," emphasizes Strauss. "We're delighted with what the Suite has enabled us to do from a business perspective."

CASE STUDY SNAPSHOT

Company: Real Insurance (Sydney, Australia), a division of the Hollard Group (Johannesburg; US$2 billion in total assets).

Lines of Business: P&C and life.

Vendor/Technology: Exigen Insurance Solutions' (San Francisco) Exigen Suite.

Challenge: Improve speed to market by replacing legacy system with flexible, modern policy admin platform.

Anne Rawland Gabriel is a technology writer and marketing communications consultant based in the Minneapolis/St. Paul metro area. Among other projects, she's a regular contributor to UBM Tech's Bank Systems & Technology, Insurance & Technology and Wall Street & Technology ... View Full Bio

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