The Power of One
Consolidating Policy Administration
NFS enjoys no such unity with regard to its policy administration systems, simply because acquisitions result in a diversity of such systems. Nevertheless, through an initiative expected to be completed in about two years, the carrier is working to consolidate redundant legacy systems into a single, more modern platform. "When you're in multiple channels offering multiple products, often the different channels require different product characteristics, so first and foremost, it is critical to have administration systems that are flexible and enable us to get to market quickly," Noice says. "We're modernizing these systems and moving some of their architectural characteristics to a point where we can achieve greater speed-to-market than their current condition permits."
The essence of NFS' effort to simplify systems, Noice explains, is that, instead of building support for each of NFS' product sets on top of its legacy systems independent from each other, it has built a common, shared infrastructure to address common needs across all systems, whether in terms of Internet and voice capability, data management, financial systems, customer and producer systems, or data feeds to institutional business partners. "All of that stuff is on a shared basis - we don't build it multiple times for each product or channel; we build it once and leverage it across all of our channels," Noice says. "Doing it that way gives us a lot of flexibility, and it's a heck of a lot less expensive!"
Not that such an approach is easy. Scale helps - Nationwide's IT budget is close to $1 billion annually. But IT/business alignment is also a major factor. "When you have multiple segments issuing multiple products for various channels and they all come together in a shared services area, there's a need to effectively manage priorities so that you don't end up missing getting a product to the field when promised," Noice explains. "That requires an awful lot of coordination."
NFS recently reorganized into four business segments - individual investment, individual protection, retirement plans and income products - each of which has one of Noice's direct reports assigned to its management team. The IT representatives also have a reporting relationship with the business segment heads. "It helps us work through the issues and define what is going to bring the greatest value to the business," Noice says. "It has gone a long way toward closing that gap in business alignment that is always so elusive for us in IT."
On a lower level of the IT hierarchy, Prudential Financial (Newark, N.J.; $474 billion in assets) is pursuing a kind of unity of expertise. Prudential is committed to a vigorous captive channel as well as to third-party distributors, and maintains a heavy emphasis on advice-based financial planning and sales for both. While both captive and third-party channels have their peculiar challenges, Prudential emphasizes their similarities. "There's no more 'one versus the other,'" remarks Tony Melchione, vice president, information systems, Prudential. The concept is based partly on the idea that the care and feeding of representatives ought to be more or less the same - if a carrier is dedicated to providing top-notch service to both. The other rationale is that efficiencies are to be gained by leveraging IT competencies valuable to both channels.
"We have people here who understand what a captive agent needs from a technology standpoint, and so they have an understanding of what an independent would need as well," Melchione says. "We try to take advantage of the disciplines we have. For example, if we have a CRM discipline within a team, that team should understand the CRM issues that both captives and independent agents would have."
Each channel is supported differently according to its needs: Each needs information delivered the way it wants. The key, Melchione explains, is knowing the value of information to both channels.
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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