Rewriting a Legacy

Munich Re completes a worldwide legacy system consolidation to speed business processes and improve data quality.

To provide more-accurate rates and meet stricter global governance requirements, among other benefits, Munich Re (US$221.5 billion in total assets) launched a new IT platform, known as the Global Reinsurance Application, or Gloria. The platform is the result of a more-than-five-year effort to consolidate 17 legacy systems, according to the company.

In December 2000, each branch of the carrier's worldwide reinsurance business had a different IT platform in place. After conducting a feasibility study, the carrier discovered that it needed to align its IT systems to standardize business processes, improve data quality, and speed underwriting, claims management and accounting business processes, according to Udo Schucar, IT project manager for the Gloria initiative. "We had to align our systems with the business trends, including higher speed, flexibility of architecture for business changes, transparency and the ability to analyze our global data," he explains. "We also saw an opportunity to reduce maintenance costs and reassign resources to new projects." Further, the standardization of core business practices improves the carrier's global risk management, according to Schucar.

Build or Buy?

Initially, Munich Re considered developing the new platform in-house. Rather than align the system with separate standards for every location in which the carrier distributes its products, however, the reinsurer decided to implement a vendor platform with built-in standards, notes Schucar. "It was easier for us to implement a system that is aligned with the standards of every location worldwide," he says.

In February 2002, the carrier selected Walldorf, Germany-based SAP's Reinsurance Management software as the core of the new system, relying on SAP standard interfaces to build in customized functionalities for specific products, such as life and workers' compensation, Schucar relates. The carrier began implementation of the Web-based IT platform in its Munich headquarters in February 2002 with the support of MSG Systems (Munich), an IT consulting and systems integration company.

According to Schucar, the carrier concurrently contracted Siemens Business Services (Munich) to implement SAP's Business Warehouse, a data warehouse that would provide ad hoc reporting for the entire reinsurance group. By providing a uniform database, Gloria accelerates the analysis, control and administration of all reinsurance business, Munich Re reports. The carrier also partnered with Softlab (Munich) to migrate data from the legacy systems to the new platform. "The main challenge was converting 350 million data records from 17 heterogeneous systems," Schucar notes.

By May 2006, Munich Re had rolled out Gloria to 16 locations, including Madrid, Paris and Tokyo. It is to be deployed at Munich Re America's (Princeton, N.J.) U.S. offices in early 2007.