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Widows Stays Strong

After its demutualization and acquisition by Lloyds TSB, Scottish Widows strives toward strength, reliability and innovation.

The establishment of the Scottish Widows Fund and Equitable Assurance Society in 1815 predates the invention of the electric telegraph by about 16 years. So an assumption that the distribution strategy of Scottish Widows' early founders was primitive compared to today's standards is a pretty sure bet.

But a lot has changed since Scotland's first mutual life insurer was formed 189 years ago to establish "a general fund for securing provisions to widows, sisters and other females who were relatives of deceased clergymen, schoolmasters and the like," according to its original charter. Today, the underwriter strives to transform its version of the Scottish widow into a figure of strength, reliability, integrity, innovation and heritage. Part of the life insurance, pension and investment product carrier's strategy to become the best company of its kind in the U.K. is a complete "overhaul of our e-commerce proposition," according to Marshall Deas, head of IT service delivery, Scottish Widows (Edinburgh, 77 billion pounds under management).

Exploiting the Web

Currently, the underwriter sells some of its "non-advice" products online, "But, like other carriers, we are looking to further exploit the distribution channel," relates Deas. "We need to ramp up our capability in this area, not only in terms of development productivity, but service resilience and robustness, as well." In an effort to accomplish this goal, Scottish Widows is "looking toward developing tools for the Internet in order to increase our speed-to-market," he adds.

Scottish Widows' e-commerce objective was designed not only with the policyholder's experience in mind, but also to help attract business through producers. Currently, the carrier relies upon a captive sales force for direct sales, and also aims to attract business through independent financial advisers to catalyze growth.

The organization's numbers were given quite a boost when it became demutualized in 2000 and joined banking group Lloyds TSB (London). "As a result of this deal, Scottish Widows currently has 4,500 employees who manage over 77 billion pounds," explains Deas. "[Post-acquisition] we gained access to 60 million [Lloyds TSB] customers."

Although supporting growth subsequent to Scottish Widows' takeover of Lloyds TSB's existing book of insurance business seems like an awesome task, it was simplified through the carrier's inheritance of Lloyds' IT platform, which was designed to support the sales process. Currently, Scottish Widows "owns and manages that sales process, and [the acquired system] interfaces with our back-end to enable straight through processing," Deas says. He explains that the system not only improves the carrier's efficiency but pleases the customer as well. "The quicker you can process requests, the better off you will be from a customer perspective," says Deas, who aims to keep his IT shop ahead of those of his competitors: Standard Life, Prudential and Norwich Union.

And, although the carrier's Lloyds TSB affiliation is helping Scottish Widows do just that, the results of the acquisition have not been all sunshine and single malt. Deas is currently contending with redundancies brought about by disparate administrative systems. "One of the key areas of concern and, ironically, an area where technology is holding back the business, is the number of administrative systems we have in place today," says Deas. "One of our key aims is looking at how we might consolidate these systems down to one while reducing the cost of ownership and increasing customer satisfaction."

Scottish Widows has established a time line for the study phase of the project, which should take place this month. Deas explains that during this phase, the project's business case will be considered. "If consolidation costs us a huge amount and we won't see a return on investment, then we won't go down [the consolidation] route," he says.

Such factors are considered through Scottish Widows' Architectural & Technical Design process, which was formed to ensure that IT became involved in planning for long-term goals. "If anyone were looking ahead to a five-year business plan, the technology would have to be positioned," reports Deas. Still, "We are clear about technology not being the tail that wags the dog. Instead, business comes first and technology supports it. Technology strategy [at Scottish Widows] is an IT accountability."

In order to ensure that both business and technology personnel are on the same page, representatives of each area meet on a daily basis. "Scottish Widows encourages communications throughout the organization, and all projects have a formal steering group," according to Deas. "We run about 50 projects on a daily basis, so the people who support those applications or infrastructures work in conjunction with the business people."

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