Following its insurance industry debut with the announcement of its acquisition of Castek this spring, i-flex solutions (New York) has won Tokio Marine Management (TMM, New York; $385 million in gross written premium) as its first customer. TMM will replace its commercial lines policy processing platform with a comprehensive insurance solution centered on Castek's Insure3 policy administration platform and including "best-of-breed" components.
TMM's decision to invest in the transformational solution had its origins in the carrier's recognition that its aging legacy systems failed to justify their continued existence in terms of both cost and performance.
TMM CIO Aidan McManus comments that, "Just looking at the overall long-term cost of those legacy systems was incentive for us to start looking for some new solutions." But the carrier identified an even more compelling incentive in the need to keep pace with market demands. TMM sought to be able to issue new products and changes to existing product lines rapidly and economically. The carrier's focus for over the past year, McManus says, "has been our quest for future flexibility." While dependent on legacy technology, achieving any degree of agility also meant getting on line with other customers to compete for vendor attention which, even when secured, still involved a laborious and expensive process. "The flexibility goal is all about getting away from those long lines, big bills and the long wait," McManus adds.
TMM cast a wide net for solution providers, considering well over 100 vendors. The carrier coordinated the vendor selection process with the development of business requirements, resulting in increasingly specific criteria. "Every two or three months we had a new set of things we thought we needed to support our strategy," McManus recalls. "We would use that as a filter and hold it up to the remaining vendors to see who 'sieved' through."
Once TMM got within double digit numbers of vendors, .NET architectures and J2EE development frameworks became important criteria, according to McManus. "We figured those were the things that would allow the vendors to build the kind of flexibility we wanted into the systems," he remarks.
The final three vendors included Hartford-based Insurity, with whom the carrier had a strong existing relationship; ePolicy Solutions (Torrance, Calif.), which McManus describes as "another very good modern system built in the J2EE architecture"; and i-flex. "Our final decision came down to what we thought was going to position us best for the greatest level of flexibility in the next ten years," McManus recounts. "That left us with i-flex and the partners they had brought to the table with them."
Those partners include Richmond, Va.-based Appix, which is providing P&C industry subject matter and project management expertise; Systems Task Group (STG, New York), which is contributing its Renaissance billing and accounts receivable systems; Jersey City, N.J.-based ISO's Rating Services; Document Sciences (Carlsbad, Calif.), whose xPression tool set will provide for printing needs and deliver industry standard forms. In addition to the core Castek component to the solution, i-flex is providing systems integration, implementation and program management services.
The implementation of the solution will begin with a pilot in two selected lines of business, over the next six months or so, according to McManus. "The idea is to make sure all the pieces work as we expect them, and then the next 18 months will be plowing through the rest of the lines of business as we prioritize them," he says.
TMM projects the implementation to be complete within 24 to 26 months and expects to get a return on its investment between three and a half to four and a half years. "We think this is actually going to be a pretty tight project; we're not going to spend a lot of time on it," McManus comments. "It is, for all intents and purposes, a fixed-price project. There's room for ample change control if we decide to take the project in any direction, but we have a plan, we have a price, we have the team to get it done."
McManus would not talk about the value of the project in terms of dollars, but says that, "it's our biggest project in the last 10 years, and for the next couple of years it will probably add about 65 percent to our regular operating annual budget."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio