Foundation for Growth

Facing growing competitive demands, Omaha, Neb.-based health and dental insurance carrier Mutual of Omaha ($18.5 billion in total assets) decided in February 2004 to expand its offerings to include life, AD&D and disability insurance. In order to support the new business initiative, as well as continue to support its original products, the insurer needed a new benefits administration system.

The company's legacy administration system, which handled the enrollment and billing for group health and dental insurance products, "didn't have the capacity to handle the projected growth," says Mike Litz, Mutual of Omaha's information services manager. "We didn't have the Web front end to manage the administration of policyholders' enrollment or a billing system that could handle multiple billing modes."

In March 2004, the insurer began searching for a new benefits administration solution that could bolster current-business enrollment and process bills while providing a foundation for growth of the life, AD&D and disability products. "We knew we wanted a group-centric system that would support a Web front end and had the flexibility to handle current business and the new business we would be adding to the system," says Litz. "One of the benefits we saw around packaged vendor systems was the ability to gain efficiencies around the built-in workflows."

With the help of Gartner (Stamford, Conn.), Mutual of Omaha identified "five viable candidates" within a month, relates Litz, who declines to name them. The insurer chose SunGard's (Miami) COMPASS group benefits administration system following a demonstration of the software in which the carrier's project team executed 400 test scripts relating to its critical requirements for the system. "Based on the functionality of the system and the service we received from SunGard, COMPASS was selected as our systems solution," Litz says.

The service-based application is built on a Web interface that supports multiple currencies and languages. It is compatible with Intel, Unix and Linux servers with a Web-based J2EE client interface, and online screen components of the system are supported by an Oracle (Redwood Shores, Calif.) database, which the insurer purchased to interface with COMPASS.

In June 2004, a mostly in-house team of 65 people began installing COMPASS in a test environment on a new IBM (Armonk, N.Y.) AIX server along with the Oracle database. The IT staff conducted more than 1,300 test cases within the test environment before moving to four weeks of customer acceptance testing (CAT), in which the test scripts were reexecuted. "Our goal was to make sure the system could handle our new business efficiently from Day 1," says Litz. Mutual of Omaha went live with COMPASS for its group insurance products on Sept. 20, 2004, for all new business with effective dates of Oct. 1, 2004. The insurer expects to migrate all existing business off the legacy system by 2007.

Mutual of Omaha's new group-centric system has increased the efficiency of overnight batch runs in the database. Whereas the database run used to take all night, now the system can sift through data within three hours, according to Litz, who says COMPASS has "been extremely dependable and reliable."

Case Study Profile

Company

Mutual of Omaha (Omaha, Neb.; $18.5 billion in assets).

Lines Of Business

Health, dental, life, AD&D and disability insurance.

Vendor/Technology

SunGard's COMPASS benefits administration software.

Challenge

Support growth with a new benefits administration system.