Church Mutual's Cloud-based Policy Admin Sets Standard for Its Vendor

Most insurance companies want to replace their legacy core systems in order to incorporate new functionality for the 21st-century marketplace. But some small to mid-sized carriers also want to get out of the data center business altogether, and are increasingly looking to cloud-based systems as a means to that end.

Church Mutual, which works with religious and charitably organizations, embarked on such a project about six years ago, says COO Richard Poirier. The company knew it had to change its core policy processing system to something more flexible in order to incorporate next-generation technologies and enable its large remote staff and distribution force.

Richard Poirier, Church Mutual

"The ability to model new product in our current system was clunky, and there was a recognition that it had probably run its useful life. As we get into a more complicated environment, we're trying to leverage big data, and the existing system didn't have the robust power to get us where we need to be," Poirier says. "Our sales force is spread through 50 states and they are our frontline operators. The ability to access data in the cloud, where we can get input at any hour of any day, was crucial."

So the company's IT department set out on a refresh project, working with vendor Tech Mahindra due to the latter's experience in the analytics and business intelligence technology that the carrier was looking to incorporate into its processes. At the end of the project, Church Mutual decided to sell the completed platform to Tech Mahindra so it could host and maintain it, and license it out to other interested customers.

"We're an insurance company, not a software development company -- when you have 950 employees, your IT resources can only stretch so far," Poirier says. "We started some discussions about bringing them on to assist us and completed the project. That evolved into them showing interest in the project, and we decided, we don't want to own and maintain this system."

Driving this decision was the fact that in the midst of the project, Church Mutual brought in IBM consultants to help it shape the direction of its IT department. That led the company to make certain realizations about where it could best deploy its resources.

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"We made a decision to be less of an anecdotal company and more analytical," he says. "We felt in developing this system we were bogging down a lot of resources. The ability to understand and manipulate and understand big data is where this game in insurance is going, and that's where we're focusing our company -- not maintaining a policy admin system. A lot of smart companies are realizing you can't be all things to all people in the IT space."

While Tech Mahindra didn't set out on the project with the goal of acquisition in mind, as a vendor partner, helping its clients identify their strengths in IT and providing support where they can was important, says Lakshmanan Chidambaram, SVP of North American operations.

"The original strategy was not to go out to acquire partly finished products," he says. "We want to become a serious platform provider. But the way people are going to the cloud is changing the way organizations operate. When a client says, 'I'm 60% of the way through it but it's not my core competency,' we want to bring it in and mobile enable it, bring in the business processing around it, then make it end to end."

The company did something similar with a UBS-developed platform as well, Chidambaram adds.

From Church Mutual's standpoint, not having to maintain the core system going forward is freeing up its IT department to try some new things, Poirier says. The big realization for the company came after the Joplin tornado, when more than 20 churches were lost and the carrier realized it had to do a better job of modeling new and unique risks its customers face.

"We're positioning IT to be more of a skunkworks, creating data and applications that the customers need," he explains. "We're adding jobs to an IT dept and we're working on data and products that differentiate us in the market."

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