With "speed to market" the new mantra for the traditionally slow-moving insurance industry, carriers are looking for tools that can help them improve the process of enhancing and repricing products and services, as well as updating the systems that support those products. That's what led New York Life (more than $138 billion in assets) to pursue a more efficient approach to product development that would not require complex systems initiatives or replacement of the firm's legacy CSC CyberLife administration system.
New York Life has been a CyberLife user for five years, and by 2001 it was apparent that using the system as a platform for product updates was not the best option, relates Gregory Tyson, senior vice president with New York Life. "The development cycle was pretty long and I was missing my time to market," reports Tyson, who is in charge of application development worldwide for New York Life.
The company evaluated several different modeling tools, but they were not comprehensive enough to satisfy Tyson's requirements. However, CSC's Visual Product Modeling System (VP/MS) was found to provide the necessary scale and simplicity. VP/MS is a calculation modeling system designed to be used by business analysts or actuaries. It enables calculation models to be ported to virtually any platform, which can reduce programming and testing time.
New York Life implemented the first VP/MS deliverables early in 2002, and quickly reaped benefits. "When I develop a product, I have many different systems that need to be modified: distribution systems, acquisition systems, etc. They typically run on different platforms," notes Tyson. "This tool allowed me to maintain arithmetic precision across multiple platforms. That sounds easy, but it's hard in our business. When calculations are held seven points to the right of a decimal, what you run on a Unix box can be different from what you run on the mainframe."
An added advantage is that the VP/MS solution was simple and cost-effective. "This allowed me to control costs and speed time to market," Tyson says, adding that the implementation "was pretty straightforward, because it is a 'bolt-on' callable module to the CyberLife system."
New York Life's actuaries are now able to rapidly translate their product concepts into actual code and systems. "Not only does VP/MS allow actuaries to build models, it also produces code," Tyson explains. "That was one of the great values of the system: Actuaries could develop a model, hit a button, and produce C code for the mainframe, and also could produce a callable model for my PC-based sales illustration systems."
Tyson concedes that initially there was some skepticism about the new system within New York Life's actuarial community. "They were accustomed to the systems they had been using. But they're bright and wanted to look at the new tool, and are now among its biggest proponents," he says. "They can be more nimble and not rely on the IT department."
VP/MS has worked so well for New York Life that the company is now using it in conjunction with other systems besides the CyberLife platform, including the company's homegrown universal life and administration system. "I've been able to use it to do things like premium testing," Tyson reports. "Where it's appropriate, we'll use VP/MS. It's not going to replace my admin systems-it will enhance them. It's also a way to extend the value of those systems we have in place."
Summarizing the benefits of the VP/MS implementation, Tyson notes, "we have been able to bring products to market faster, and reprice them where necessary. And in our industry, product repricing is the name of the game."
New York Life, New York, more than $138 billion in assets under management.
LINES OF BUSINESS:
Life, annuities, investments, long-term care, health, disability.
CSC's (Austin, TX) Visual Product Modeling System (VP/MS) and CyberLife administration system.
Streamline the systems modification process and improve time-to-market.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio