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Policy Administration

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J.C. Penney Chooses Real-Time Over Batch

Insurance direct marketer selects SOLCORP's Ingenium for real-time policy administration system.

Serving the customer can sometimes be painful, especially when the customer wants real-time interaction and providing it means completely overhauling the policy administration system.

Plano-TX-based J.C. Penney Direct Marketing Services (now a division of AEGON USA's Special Markets Group; AEGON had 1999 revenues of $1.1 billion), wanted to launch new products and serve its customers—primarily supplemental health, life and accident insureds—in real time.

"We were running the business with a 30-year-old application," says Mark Rude, chief information officer. "It worked well through the '80s and '90s, but it wasn't going to be a solid platform for our upcoming business plans.

"The plan required us to have real-time multi-channel capabilities to serve the customers," continues Rude. "Our business model is a direct-to-consumer model, and we knew the consumers were looking to interact in a real-time fashion." Rude says J.C. Penney operates 10 call centers in the US and Canada, and an increasing number of customer interactions are coming through the IVR system and even the Web.

Let the Search Begin

The insurer began a search for a technology vendor that could provide a new policy processing system. "There were a couple of key eliminator criteria" that helped J.C. Penney rule out a number of vendors, says Rude. "The product had to be able to support both life and health products, had to be real-time and scalable, and had to be a proven commodity in the marketplace. The vendor also had to have staying power and would have to be in the insurance industry for the foreseeable future."

In late '97 J.C. Penney Direct chose SOLCORP's Ingenium insurance processing solution. SOLCORP (Mississauga, ON) met all of J.C. Penney's criteria, says Rude, not to mention the fact that the insurer trusted SOLCORP's parent company, Plano, TX-based EDS. "It is nice to know EDS is close by," he says.

Working Together

Not only did SOLCORP supply the application, it also helped J.C. Penney Direct implement the system. "From the standpoint of working with a joint SOLCORP-EDS-J.C. Penney team, the quality of resources and the type of working relationship was very effective and successful," Rude says. "For someone not knowing the players on the joint implementation team, they would not know which organization the people came from. It was very collaborative."

Rude says the Ingenium implementation was kicked off in February 1998 and was completed in August 2000. "Certainly, the implementation duration was on the long side at two-and-a-half years," Rude admits.

"But given the volume of interactions with customers, we did not want to go for a long period of time with coexisting administration applications," Rude adds. "As long as we were dealing with two systems, the customer support would be handicapped," because the call center reps would have to switch back and forth between two systems, he says.

Once Ingenium was set up and ready to handle records and transactions from the legacy system, it took 11 weeks to convert policy records from 32 million customers. Of that number, 13 million were active policies, from approximately 11,000 different insurance plans, Rude says. Termed the "30-year-archeological dig" by the staff, the conversion sprung some surprises. "Thirty years of data doesn't produce the highest quality of information," Rude jokes. "We found some bones we did not know were buried."

Ingenium runs in a client/server configuration with users—customer service representatives, managers and any employee who needs access to the system—on Windows NT workstations. Policy information is stored on an IBM (Armonk, NY) DB2 database and J.C. Penney integrated some query and reporting functions from Cognos' (Ottawa, ON) Impromptu, a database query application. Ingenium is also integrated with J.C. Penney's existing CTI and call center IVR applications that were a combination of Cisco Corp. (San Jose, CA) technology and in-house applications.

The end result, boasts Rude, is a total success. However, J.C. Penney Direct did learn a few things along the way. "For the call centers, we had to train 1,400 people over a three-month time frame," he says. "We had to train the folks while we kept the business running. If we had to do something differently, we would have involved the training staff much earlier."


Case Study Closeup


J.C. Penney Direct Marketing Division of AEGON USA, $1.1 billion in 1999 revenues.


Supplemental life and health insurance.


SOLCORP's Ingenium; Cognos' Impromptu; Cisco IVR applications; IBM DB2 database.


Replace 30-year-old policy administration system.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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