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Multi-National Vision

Prudential Financial takes a decentralized view of the individual life insurance business.

Economies of Scale

One of the International Insurance group's current initiatives is work towards bringing together a suite of systems that can be used for starting up operations in new countries. It will include a general ledger package (on which the whole enterprise will eventually standardize), a policy administration package, agency compensation and a needs-analysis sales illustration system for the field force, as well as a communications package. Although it is expected to create efficiencies for the carrier, standardization of a multi-national system may be challenging.

""In a couple of markets in the past we haven't been able to bring in the kind of hardware that we wanted,"" explains Weissman. ""If, for instance, Prudential wanted to standardize on IBM (Armonk, NY) equipment there might be problems because it either may not be allowed in a particular country or the tariff would be so high that Prudential could buy locally made hardware of the same quality much easier."" Although the initiative is part of an effort to keep country units somewhat standardized, the carrier sees the value in keeping other areas decentralized. ""There are some things we are looking at to bring country units closer together, but the creative tension is really between giving the country president and senior management of an operation the ability to do what"" needs to be done for the operation. Budget planning is one of these areas. IT budgets are prepared on an annual basis and developed within the individual country units. The business group head must then approve proposed budgets before initiatives can get underway.

Because they began operations at different times and are for the most part decentralized, country units are working on a wide variety of initiatives, from call centers and document imaging to virtual private network (VPN) connections. Prudential of Korea, for example, is currently the only operation with live CRM operations. The carrier operates a custom-built Web-based system that provides ""life planners"" and their policyholder clients with access to policy data. Each life planner has a home page that can be customized, and policyholders use these pages as a starting point once they are logged on to the system.

Additionally, Prudential of Japan is working towards expanding its large homegrown call center. Perhaps as a result of shared country unit information, Prudential's Brazilian insurance operation has plans to implement an Eastman Software (Billerica, MA) imaging and workflow system within the next year. Both Prudential of Japan and of Korea currently use this Eastman imaging equipment.

Another area in which Prudential's country units are focusing involves the VPN. Currently, Prudential has a site-to-site VPN connection between its Brazilian and Argentine operations and its main US IT center. Its Korean, Philippine and Taiwanese operations will be moving to the VPN in the future. Cisco (San Jose, CA) 72xx series routers. equipped with hardware and software to allow the IPSEC (Internet Protocol Secured) traffic to be managed, is used. Also, 26xx series routers with the same capabilities are used.

Staffing Locally

Personnel for the individual country units ""from the CEO to the receptionist,"" are hired locally, says Weissman. The first recruit in a new country unit is its president. That country's department heads are recruited next and they in turn recruit their teams. An implementation team made up of staff from the US and also members of the more mature operations are then brought in to help the new operation get started. These teams usually work with new international start-ups for the first 12 to 30 months of operation. ""Prudential attempts to back the implementation team out as soon as the local staff is able to operate independently,"" Weissman reports.

A market's potential workforce, especially in the area of information systems, can sometimes be sparse. ""If we can't find qualified IT personnel then we have to find the best 'athletes' and get them trained,"" explains Weissman. The type of training a recruit receives is dependent upon whether or not the systems being utilized are new. If systems are new, IT personnel is trained on the job side-by-side with the imported implementation team. Or, according to Weissman, if technology vendor packages are being used, new hires may be sent off for several months to receive training from the vendor because, says Weissman, ""the whole idea is to have local people managing these operations.""

Pru's View

COMPANY NAME: Prudential Financial, Newark, NJ, $379 billion in assets under management.

CURRENT MULTI-NATIONAL IT INITIATIVE: Standardization of a general ledger package (on which the whole enterprise will eventually standardize), a policy administration package, agency compensation and a needs-analysis sales illustration system for the field force, as well as a communications package.

INTERNATIONAL INSURANCE OPERATIONS: Canada, Japan, Korea, Taiwan, Italy, Brazil, Argentina, the Philippines and Poland.(Editor's note: At press time, Prudential Financial expanded its Philippine operations with the acquisition of ING's Philippine life insurance subsidiary.)

HISTORY OF INTERNATIONAL OPERATIONS: Prudential entered the Canadian insurance market in 1909. In 1981, it began operations in Japan with Sony Corp. In 1987, Prudential opened its wholly owned Prudential of Japan operation. Soon after, operations in Korea, Taiwan, Italy and Spain were formed. In 1997, operations in Brazil, Argentina, the Philippines and Poland began. Prudential's ninth operation is Gibraltar Life, a Tokyo-based company.

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