Customer In Focus - Swiss Re

Overview:

Swiss Re is a leading global reinsurer. Founded in 1863 in Zurich, the company now operates from more than 70 offices in over 30 countries, offering a wide range of traditional reinsurance products and related services for managing capital and risk.  These are complemented by insurance-based corporate finance solutions and supplementary services. Swiss Re is one of the world's strongest reinsurers financially, with gross premiums in 2005 of CHF 28bn, of which life and health business represented some 38%.

Business need:

Swiss Re’s life and health business underwent a period of strong transactional growth.  In response, in the year 2000 Swiss Re finalised its blueprint for a significant programme of global business and technical change - named Business of the Future (BoF).  The BoF programme was explicitly initiated to achieve the following primary objectives:

  • To provide a standard business and technical platform across Swiss Re’s global life and health business.
  • To engender common business processes with support for local exceptions (necessary to support business or regulatory variance).
  • To provide a multi channel solution supporting the key points of interaction with clients and partners, in a coherent and consistent manner.
  • To exploit business process automation to streamline administration activities and to offer increased value to clients and partners.
  • To provide an integrated solution across the core functional undertakings of the business, formalising previously manual methods and increasing data quality and throughput.
  • To provide the means to exploit the data provided by the new system using advanced Business Intelligence methods.

Solution:

Sabrefish (formerly Salmon Ltd) has worked collaboratively with Swiss Re on the BoF programme for nearly six years.  From the outset, Sabrefish ensured its approach reflected Swiss Re’s desire to shape and manage IT change effectively, and identify and mitigate risk.  Whilst remaining responsible for the management and execution of the programme, Swiss Re chose Sabrefish to supplement their skills and knowledge in execution -  particularly in the areas of architecture, release management, project office, project management, quality assurance and systems analysis.

Benefits:

By selecting and working with Sabrefish, Swiss Re are now realising the proposed benefits from its blueprint for ‘Business of the Future’.  The resulting portfolio of solutions and their adaptive, Service Orientated Architecture gives Swiss Re’s life and health clients a consistent experience - no matter what channel or line of business they deal with.  In turn, Swiss Re has attained a level of agility in its business that allows new functionality to be added, or exposed to a new channel quickly and easily.  Swiss Re has benefited from a lowering of costs by reusing services and therefore reducing IT development and maintenance time.  Most importantly Swiss Re is uniquely placed in the global reinsurance market to fully exploit its existing IT investments.    

 


 

Full Case Study:

 

Sabrefish implements Service Orientated Architecture (SOA) as part of major global change initiative called ‘Business of the Future’.   

Swiss Re is a leading global reinsurer. Founded in 1863 in Zurich, the company now operates from more than 70 offices in over 30 countries, offering a wide range of traditional reinsurance products and related services for managing capital and risk.  These are complemented by insurance-based corporate finance solutions and supplementary services. Swiss Re is one of the world's strongest reinsurers financially, with gross premiums in 2005 of CHF 28bn, of which life and health business represented some 38%.

Overview – Business of the Future (BoF)

In the second half of the 1990s and early part of this decade, Swiss Re’s life and health business underwent a period of strong transactional growth.  One of the consequences of this was that Swiss Re found itself operating numerous local life and health reinsurance business units.  Spread across the globe, these units inevitably diverged in terms of their business processes and supporting administration systems.  In response, in the year 2000 Swiss Re finalised its blueprint for a significant programme of global business and technical change - named Business of the Future (BoF).  

Core to BoF was Swiss Re’s longer term requirement for its life and health business to be global – removing existing constraints  and limitations on how and potentially where business is processed.  In addition, the blueprint for BoF also identified a single global solution for all Swiss Re’s core life and health support systems: reinsurance administration, business processing and management, as well as enabling and supporting the production of regulatory and non-regulatory reports and management information.  Additionally, BoF set out to re-engineer Swiss Re’s business processes by removing any lack of commonality and establishing a common set of business processes.  The BoF programme was explicitly initiated to achieve the following primary objectives:

  • To provide a standard business and technical platform across Swiss Re’s global life and health business.
  • To engender common business processes with support for local exceptions (necessary to support business or regulatory variance).
  • To provide a multi channel solution supporting the key points of interaction with clients and partners, in a coherent and consistent manner.
  • To exploit business process automation to streamline administration activities and to offer increased value to clients and partners.
  • To provide an integrated solution across the core functional undertakings of the business, formalising previously manual methods and increasing data quality and throughput.
  • To provide the means to exploit the data provided by the new system using advanced Business Intelligence methods.

Sabrefish and Swiss Re – A Collaborative Approach

Sabrefish has worked collaboratively with Swiss Re on the BoF programme for nearly six years (since July 2000).  From the outset, Sabrefish ensured its approach reflected Swiss Re’s desire to shape and manage IT change effectively, and identify and mitigate risk.  Whilst remaining responsible for the management and execution of the programme, Swiss Re chose Sabrefish to supplement their skills and knowledge in execution -  particularly in the areas of architecture, release management, project office, project management, quality assurance and systems analysis.

As such, Sabrefish approached the provision of business and technology services at Swiss Re with a strong emphasis on four critical factors:

  • Risk mitigation
  • Cost control
  • Project timescales
  • User expectations

As with many global change programmes, however, the vital ingredient was communication.  Sabrefish ensured direct, honest and open communication channels with Swiss Re, ensuring a successful outcome to each respective IT project.  As a result, Sabrefish’s presence at Swiss Re has grown significantly since 2000, spanning the full spectrum of IT services from initial technical prototypes through to post-live initiatives both in the UK and US.  Derek Scannell, CIO of Swiss Re’s life and health business comments:  

“Today’s best-of-breed service providers must be capable of understanding clients’ individual business models and existing business processes.  Salmon did this, and additionally possessed the necessary IT skills, techniques and methodologies to ensure that Swiss Re developed new systems and applications that delivered value back to the business.”  Derek Scannell, CIO, life and health business, Swiss Re

Drawing on over 15 years’ development experience, together with a portfolio of business re-engineering projects from a variety of industry sectors and projects, Sabrefish brought innovation and pragmatism to Swiss Re’s BoF programme.  Importantly, Sabrefish was able to work effectively with internal resources, third party systems integrators and a variety of specialist IT vendors across Swiss Re’s key geographies to ensure the timely development and implementation of systems capable of delivering true business value.  

Sabrefish was instrumental in nearly all aspects of the programme and project lifecycles, namely:

  • Release Management     
  • Business Intelligence Development
  • Project Office
  • System Testing/Quality Assurance
  • Project Management
  • Data Conversion
  • Technical Architecture
  • Legacy Integration
  • Business and Systems Analysis
  • Application Support
  • Methods and Tools
  • Infrastructure Support
  • J2EE Development
  • Deployment Automation

The initial phases of the BOF application went live in the United Kingdom and North America in 2003 and 2004, with data conversion and subsequent decommissioning of legacy systems occurring throughout 2006.

An SOA-based Implementation

Managing such a complex programme of projects successfully called for governance, clear direction and communication.  Also required was a structured yet flexible programme and project management approach, and so a phased, iterative approach was adopted and customised to meet Swiss Re’s individual requirements.  Heavily based on the Rational Unified Process (RUP) – but customised to support multiple projects under an umbrella programme –  each IT project was broken down into individual modules which, when combined, aligned directly with Swiss Re life and health’s over-riding business strategy.  This gave greater room for flexibility, customisation and the effective management of change. Deliverables during each phase, including documents, systems and processes further helped to ensure that intelligence was gained throughout the duration of projects.

The resulting BoF solution is based on key Service Oriented Architecture (SOA) principles, leading to a fully integrated suite of applications using the latest technologies and provides significant opportunities for reuse across the multiple channels supported by the business.  

BoF: Transactional Architecture

In addition, this approach allowed Sabrefish to collaborate with key internal and external resources across various locations, including development offices in North America, the United Kingdom and Europe.

The Results and Benefits

BoF has undoubtedly brought significant business value, linked to the key programme objectives, including:

Treaty Benefits:

Old paper based systems and processes can lead to uncertainties in relation to how much a (re)insurer is on risk.  Often there is more than one paper version of a treaty, giving rise to potential confusion as to what was actually agreed by the client.  Swiss Re’s new system stores vital treaty information in a centralised place, making it more easily accessible, easier to accommodate account changes and easier to ensure any changes are in line with previously agreed treaty amendments.  The automated treaty system also allows all ‘down-stream’ processes to be processed within limits.

Furthermore, where in the past treaties were often signed with a claims processing service, it could be difficult to ascertain the true cost of the service at the time of writing the treaty.  The BoF solution now provides a mechanism to protect and ensure profit margins on future services agreed upon in a treaty.

Policy Benefits:

The policy system ensures that policies are within treaty limits and conform to Swiss Re’s desired data standards.  The new policy system has also cut fixed costs by facilitating a much greater throughput of transactions with minimal human intervention by automating much of the validation and data standardisation.

Life Index Benefits:

All new life information is stored in a local index, capturing alias information and highlighting data anomalies such as duplicate lives and fraudulent alias definitions.

Underwriting Benefits:

The new underwriting system uses life information to assess risk. The system also captures paper based evidence accurately by scanning and electronically storing it in a centralised repository. This allows for an easy and full underwriting assessment from a single reference point.

The Claims System in detail

One of the most critical client facing functions of a life and health reinsurer is its ability to manage claims against policies for which they are on risk. The appropriate and timely execution of this function is key to client satisfaction and financial management of liabilities.

The claims system uses treaty and policy limits to ensure that only those claims on risk are processed.  The system also ensures treaty limits are not exceeded across lives and policies, as opposed to looking at the claim in isolation (thereby reducing exposure on risk).

The system also captures paper based evidence by scanning and storing it in a centralised repository whilst providing full online capabilities alongside the system captured data.  The system also monitors payments on claims, ensuring claims are not overpaid or paid during non-payable periods.

To this end the new claims system provides the following key benefits to the business:

Application Integration - Document Management:

Many of the claims related activities include document related management tasks, specifically in the areas of claims assessment and verification. The BoF solution includes integration with an industry leading Electronic Document Management System (EDMS). This provides the ability to electronically store, retrieve and search key supporting documents. Additionally, annotations and assessment comments may be added to augment the assessment decision process. All of this information is then available to application users providing a ready audit trail for business users. For the benefit of users these functions are available within the integrated claims application providing a seamless experience for users.

Application Integration – Data Quality:

With the suite of applications now integrated, additional data and process validation can be applied automatically by the application and its supporting processes, where previously this was not possible due to lack of connectivity between systems or manually administered, and off-line, content. This significant enhancement ensures that the business can quickly verify ownership of policies being passed for claims processing and ensure that treaty, policy and claims rules are applied within the defined process, leading to better quality of data and process execution. This better quality of data can now also be passed through to the business intelligence areas providing additional experiential information back to the business.

Business Process Management – Process Formalisation and Optimisation:

Processing a claim is achieved in variable periods of time, some taking hours, and some taking days depending on the complexity of each case. Formalisation of this process has been achieved by using a Business Process Management (BPM) implementation that drives each claim through a “Create Claim”  process and sub-processes. An automated process now checks each claim to ensure it passes user specified referral rules and is able to automatically complete standard claims whilst also referring special cases to claims specialists for review, where appropriate. This mechanism allows the business to focus their expertise where it is needed whilst also improving the turn around time for standard cases. Additionally, the statistics for these processes can now be fed into performance management reports, which after further analysis can be fed back to instigate further process optimisation initiatives.

Common Platform Supporting Regional Variance:

Swiss Re’s North American and United Kingdom life and health business units demonstrate some regional variance in lines of business transacted, as well as variance in the statutory and regulatory environments in which they operate. The application supports these and other local variations by understanding a user’s organisational unit and using this to switch in local application and process logic as applicable. Even with this support, Sabrefish have helped Swiss Re achieve a very significant level of commonality for the application and its supporting processes across these business units.

Multi Channel Support – Reuse:

Swiss Re is now ideally placed to benefit from rapid reuse of existing assets and the sharing of services and infrastructure across lines of business.  This is critical to achieving business processes that can adjust to changing market conditions quickly and easily.

The BoF application has been engineered to provide effective support for multiple channels of business operation. These include intranet and extranet based “self-service” models, EDI channels, direct messaging and a “Paper Portal” for scanning incoming forms into XML (Extensible Markup Language) formats that can be used to seed business processes within the BoF solution.

Great care has been taken in the design of the applications to ensure that wherever possible, the same underlying business process instance, along with its supporting services, can be reused irrespective of the channel through which the business has arrived.

Summary

By selecting and working with Sabrefish (formerly Salmon Ltd), Swiss Re are now realising the proposed benefits from its blueprint for ‘Business of the Future’.  The resulting portfolio of solutions and their adaptive, Service Orientated Architecture gives Swiss Re’s life and health clients a consistent experience - no matter what channel or line of business they deal with.  In turn, Swiss Re has attained a level of agility in its business that allows new functionality to be added, or exposed to a new channel quickly and easily.

Swiss Re has benefited from a lowering of costs by reusing services and therefore reducing IT development and maintenance time.  Most importantly Swiss Re is uniquely placed in the global reinsurance market to fully exploit its existing IT investments.