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All the Right Moves

Manulife USA's annuities division leverages new infrastructure to gain efficiencies and attract new distributors.

Around the time CIO Mark Rizza came aboard in 1999, Manulife USA's annuity division was on the verge of re-engineering itself technologically to better reflect its wealth management orientation, as opposed to just beinganother part of an insurance company. The division markets Manulife's annuity products to middle- and upper-income individuals through some 800 broker/dealer firms, banks and independent financial planners, and needed the tools to do it right. Furthermore, a significant increase in sales volume was anticipated and the division had to find a way of handling it.

A literal move in the right direction came with a relocation to the operation's present digs on Boylston Street in Boston, setting the stage for an infrastructure enhancement initiative coinciding with Rizza's arrival. "When we built that office we also built a brand new Cisco-based San Jose, CA gigabit network in our data center, part of the initial part of our plan to fortify the backbone and network side of IT operations," says Rizza.

The King of Products

As a competitor in the annuity market, the division considers "product is king" as its mantra, and product is the number one area the IT department concentrates on from a development standpoint, according to Rizza. "We do our best to provide the best product we can out in the market—we're constantly innovating product and getting it out on the street."

With the infrastructure foundation in place, Rizza's organization has spent the last 12 months refining product delivery by consolidating the applications upon which the products depend. "We are getting a lot smarter about putting out product in a way that doesn't affect the back office negatively, where probably in the distant past it was more like 'put it out and we'll pick up the pieces later,'" he says. In the old days, he adds, "someone might call for a report from one system, and someone else would call for the exact same type of report off another system and the numbers wouldn't match because there was either a difference in selection or a difference in the data." While work will continue into next year, the problem is largely solved, according to Rizza: "We are so integrated now, almost every time we do a release now, in most cases all of the applications are affected."

That harmony in the back office is in place to ensure transparent communication to a Web site front end that is in the process of being extended to all of Manulife USA's broker/dealer clients and end customers. Launched in 2001, is a Microsoft (Redmond, WA) N-tier-based front end running on a Vignette (Austin, TX) content management platform, which enables tailoring information to the broker/dealer or end-customer viewer. Current work on an EAI (enterprise application integration) architecture using Vitria Technology (Sunnyvale, CA) software, will further foster system synchronization, according to Rizza.

Since the Web site appeared, Rizza has been concentrating on adding e-business functionality in support of the broker/ dealer distribution channel, such as online exchange of funds and rebalancing within an annuity contract. This June the division rolled out an "online illustration center," which enables Manulife's investment advisers to create custom illustrations of various scenarios involving Manulife's annuity products, including hypothetical investment scenarios showing actual portfolio returns.

Product Customization

"We have about three main products at a very high level that we do in US annuities, and all of those below the scenes have different variables to them, such as a rider or death benefit-all those sort of back-end features," Rizza explains. "We're running it almost cafeteria style, so depending on what you choose, that affects the price and the return and how things will work throughout the life of the contract. We have the ability with the new hypothetical system to have a broker come in and enter the information and tailor it to their customers and come up with a result. If they like what they see on the result, then they can print it, and sit down with their customer and talk through it."

Evidently the broker/dealers like what they see when it comes to the application itself. Since the hypothetical component was added to the online annuity functionality, the division's rate of attracting new broker/dealers has tripled. Notes Rizza: "We're pretty happy about that."

Aggressive revenue generating moves are not all that's expected from Rizza's organization, however. The other thing that the organization is focusing on is trying to make the back office more efficient by using new technology, changing business processes, etc., to help reduce to costs, he adds.

A major cost-control effort is a partnership with Austin, TX-based CSC to run the division's mainframe on a third-party basis out of a San Diego facility. "We have dedicated lines between that mainframe and our downstream and front-end systems," Rizza explains. "We run all of our other initiatives in house, taking a feed from the mainframe as sort of our engine, and we create around it surrounding systems, including imaging systems, Web systems, data warehouse, and information management systems, in order to provide our customers with the information they need to make decisions for products and other business decisions."

Rizza's IT organization also partnered with CSC beginning in early 2001 to develop an imaging and workflow application based on the vendor's AWD (automated workflow distributor) product. All mail is scanned into the system, which identifies the proper recipient and subsequent workflow process. The system is tied to the front end, in order to report logged information outward, in concert with the back office's processing on the book of business.

Since completion of the project in October 2001, the system has brought a variety of efficiency benefits. "By the mere fact that everything is electronic, we have much better management information reporting: The managers can see the queues online, and they can react much more efficiently to bottlenecks," Rizza asserts. Additionally, "eliminating physical delivery of paper, and getting information to the right candidate to process it, particularly a type of correspondence, obviously increases the efficiency of the entire department."

CSC is also the division's partner in a current initiative towards a proprietary strategic platform to make many systems self-administered by business analysts on the product side. The point is "that in adding any rider you don't have to get systems involved," says Rizza. "We're trying to get more and more of the users to self-sufficiency to cut costs in the back office and create greater efficiency." On the reporting side, Rizza's department has begun to use software from Cognos (Ottawa), a business intelligence applications vendor, to build relational data-mining "cubes," with which "the user has the ability to mix and match relational dimensions to their heart's content."

The Vitria EAI tool will even liberate IT people from IT, in as much as it diminishes the need to write specific code between applications. That advantage is very much in keeping with Rizza's conception of his staff. "A lot of our people are relationship-type people and business systems analysts; those people understand not only what a system or operation does, but also the business purpose it serves." That makes for fruitful interaction with non-IT people, which Rizza describes as "very collaborative."

Business/IT Teamwork

"We make recommendations on some new technologies, and even in some cases some new technologies that would help certain business functions, because we're so close to the business," Rizza elaborates. "Conversely, the business makes recommendations on new functionality that they would like. And in a lot of cases, we'll get: 'Hey, have you seen this new thing? What do you think?' and you take a look at it to see 'Does it apply to us?'"


Product Is King

COMPANY NAME: Manulife USA (Boston, $46.2 billion assets under management), annuities division.

LINES OF BUSINESS: Fixed and variable annuities.

KEY EXECUTIVE: Mark Rizza, chief information officer.

IT STAFF: 125 full-time employees and 20-40 consultant staffers.

KEY INITIATIVES: Since the launch of the in 2001, Rizza has been concentrating on adding e-business functionality to distribution channels. In June, IT launched the "online illustration center." Rizza's organization runs the division's mainframe on an outsourced basis through CSC (Austin, TX).

IT ARCHITECTURE: IBM (Armonk, NY) CICS mainframe system; Cisco (San Jose, CA) GB data center network; Microsoft (Redmond, WA) platform running Windows 2000; Oracle (Redwood Shores, CA) 8i database; Vignette (Austin, TX) content management; Vitria Technology (Sunnyvale, CA) enterprise application integration.


MARK RIZZA: "Speed to market plays a big part in the annuities world. To be competitive, the challenge is on us on getting new products or product variations out to market."

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

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