Allianz Life Policy System Revamp Supports 'Digitalization' of Product and Service

Life insurance has been one of the most difficult lines of insurance business to adapt to the increasingly digital world. The time between when a policy is sold and when a claim is made against it is likely to be longer than the lifecycle of many IT systems associated with it. But life insurers aren't immune to the changes in customer expectations, and many feel pressure to implement new core systems that can support the next generation of policy sales and service.

Allianz Life (Minneapolis; $102.9 billion in assets under management, 2012) set out to select a new core system that would eventually consolidate outdated green-screen systems for three separate product lines in 2009, says chief administrative officer Cathy Mahone. The company selected Accenture's Life Insurance Platform (ALIP) because it felt the configurability of the system would make it easier to "deliver digital capabilities and market product innovation," she says.

"Mobile phones, tablets, administration systems, e-commerce -- anything that is moving data into any channel is what we call 'digitalization,'" she explains. "If you have an old, antiquated system, it's going to be hard to develop new products and tap into that data to use it any way you would like to meet distribution and customer needs.."

Working closely on the system revamp effort was Jasmine Jirele, SVP of enterprise operations. Jirele worked closely with business units to make sure that configurations of ALIP met business needs without creating negative downstream effects. She also help handle change management for employees who developed what she terms "a newfound affinity for the old system."

"It's in human nature a little bit," Jirele says. "It's part of managing the people through the change process. But there are capabilities in our new platform that we've never had before. Some of the things we can do to build product are frankly just better, and one of the biggest drivers of the project from the beginning was a desire for a stable, more modern platform that we could use to make changes to the variable products."

Jirele says that product development in life insurance "has to be more iterative" than it was traditionally. That means understanding the kind of experience customers want and knowing how to meet those demands -- something she works closely with marketing on.

"The pace of change is increasing, and distribution partners are looking for something unique to offer. It puts the onus on the carrier to differentiate their products," she says. "You have to be quick to market and adjust your products pretty rapidly to create things like syndicate offerings. The more constrained you are with aging technology, the more difficult it is to do that."

"We're being really aware of how it changes things organizationally with the flexibility of the new system: how do we implement products, what do actuaries do compared to IT and operations," Mahone adds. "What we don't want to do is have the implementation get in the way of us being in business."

CIO Jeff Palm wasn't with Allianz at the time ALIP was selected, but it was his job to oversee the implementation and make it as smooth as possible. He handled it by establishing clear deadlines and goals within the larger project.

"Every project follows the same basic shape: there's analysis, design, and build phases," he says. "Understanding where those milemarkers are, regardless of the length of this project, is important."

[Palm talks to I&T about keeping big projects on budget and establishing key metrics to define success]

As head of the IT department, Palm is very invested in Allianz' organizational desire to engage more customers digitally. He believes the new system is well positioned to support many of the carrier's corporate objectives.

"A lot of times in tech people say 'we built the system and we're done," but it's only a piece of the process," he says. "It's not about how fast we can go on the straightaway, it's about how agile we are in the turns. We're getting to be more and more about hairpin turns and adjustments with products and customer service, and it seems like ALIP was the right decision in terms of the flexibility needed in the marketplace."

Jirele, who was a veteran of the product and market management teams before moving into operations, concurs. Changes in insurance carrier business processes have to be developed with the customer in mind, she says.

"When you think about life contracts, they're on your books for 20 years easily. How are you going to manage that customer over the course of those years?" Jirele asks. "We used to have old platforms that were strung together in a suboptimal way -- now you can design something that's much more customer centric."

On April 29 of this year, Allianz' variable annuity line went live on ALIP -- the first of the several lines, which also includes fixed annuities and life insurance, to do so. In the first week, 200 applications were processed on the new system.

"We started with the oldest one that posed the most risk to the company, and we went from green-screen to something that's so much more user-friendly," Mahone says. "Now we have to get the stomach to move the other products over being that these projects are very large and require a lot of focus."

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio