IC21 - Insurance Company for the 21st Century
ICMIF Technology Network, May 2007
Presented by Tan Kin Lian, former Chief Executive Officer, NTUC Income

1. Introduction

I am developing the software platform and business strategy for the Insurance Company of the 21st Century. This has been presented in a paper presented to an ICMIF conference in Singapore. It is also published in the ICMIF newsletter.  I now wish to describe the technological aspects of this platform.

2. My background

I served as the chief executive officer of NTUC Income in Singapore for 30 years from 1977 till my retirement in 2007.

During this period, the business of NTUC Income has grown from an asset base of SGD 40 million to SGD 1,700 million. In 2006, its premium income was SGD 2,000 million, contributed by 1,800,000 customers. It had a 15% market share in the insurance market, and achieved was the market leader in motor, health and annuity products.

It is rated AA by Standard and Poors. This is the highest rating for any domestic insurance company in all of Asia.

I qualified as an actuary in 1975. My previous working experience includes three years as a chief computer programmer of a large trading house. During the initial years with NTUC Income, I also performed the informal role of chief software architect in addition to my main responsibilty of a chief executive. I provided the strategic leadership in developing the computer technology to achieve its business goals.

3. IC21 - Business Strategy

The IC21 project is based on the following key thrusts:

* customer centric
* contact center centric
* service centric
* new way of marketing

Most insurance companies are not customer centric. They depend on the intermediaries to handle the customer relationship. The quality of service is patchy and depends on the service standard that is delivered by the individual intermediary.

IC21 allows the insurance company to take control of the customer database, and monitor the quality of work of the intermediaries and employees involved in delivering service to the customer. The particulars of prospects are recorded into the database, even before they become actual customers.

IC21 is contact center centric. The contact center handles all communications with the customers and prospects. The communication can be through telephone, e-mails, SMS or fax. The contact center can deal with the customers directly, or can support the intermediaries in providing the personal service to the customer.

IC21 is service centric. All outbound and inbound contacts with customers are recorded as a service request that has can be easily monitored until its completion. This provides a uniform platform to handle all types of interactions and to measure the quality of the work.

IC21 supports a new way of marketing to the customers. It captures the key contact details of the prospects and allows the marketeer to contact the prospect over a period of time. They aim to educate the prospect about the value of insurance product.  If the prospect is educated and convinced of its value, he will be interested to buy the product. We aim to change the paradigm from "insurance has to be sold", to "insurance will be bought".

To support the new marketing approach, the insurance product will be designed to be simple and easy to understand by the customer. The product can be described in a FAQ format (ie frequently asked questions) that can be posted in the website. It should be actively retrieved and used for educating the customer.

The website will be an important depository of information to be used for communicating with customers. 

4. IC21 - Technological Platform

The technology platform of IC21 has the following key features:

* light weight computer system
* website
* contact center
* mail server
* data warehouse
* simplified accounting system

4.1 Light weight computer system

Most computer systems are too complicated and are heavy weight systems. They are written to handle complicated products and business processes. These are confusing to the customer and to the employees.

IC21 uses a light weight computer system. It handles simple products and business processes. The effort taken to develop and use IC21 is a fraction of the effort needed for most traditional systems.

4.2 Website

The website is an important depository of information to be used in running the business. It provides product and service information to customers. It explains the business processes and how service is delivered to the customer. 

The website is designed to allow information to be retrieved easily. It adopts a simple layout and avoids the use of advanced features that take up bandwidth and processing time, and slows down the service delivery.

4.3 Contact center

The contact center officer has easy access to the website to retrieve information for communicating with customers. They can also record notes and requests by customers through the website to be updated into the database for backend processing.

The intermediaries can also access information of their customers and handle most of the services that are done by the contact center officers.

Customers who are internet savvy can also acccess their own information through the same system. They can submit requests directly through the internet, or seek the asssistance of a contact center officer.

4.4 Mail server

All communciation with customers are stored in the mail server. At certain scheduled times during the working day, they are despatched to customers through the mode that is preferred by the customer, namely:

* by e-mail
* by postal mail
* retain in the server for later retrieval by customer
* by SMS (for short messages)

The customer can be notified about impending mails through SMS.

As more than 70% of adults have mobile phones in most countries, the system makes active use of SMS to notify customers about transactions and events. It is low cost, quality service and high touch.

4.5 Data warehouse

All transactions are recorded in the data warehouse. They are used to generate reports to be sent to users at various levels. The reports can be produced efficiently by specialists who are familiar with the report generating software. The work can be done very efficiently.

4.6 Simplified accounting system

IC21 adopts a simplifed accounting system. All transactions are standardised into receivable, payables and journal transations.  Each transaction contains the standard, essential information.  The system keeps track of the settlement of each item, and allows outstanding items to be followed up.  All settled transactions are summarised to update the general ledger.

The calculation of reserves and provisions are handled by separate programs that analyses the database. They are kept separately from the handling of the transactions.

5. Key values of IC21

IC21 delivers signficant values through:

* simplification
* standardisation
* specialisation

IC21 deals with simple products and simple processes, but are delivered in a manner that is appreciated by the customer.

IC21 adopts a standard approach for many activities that appear to be different in nature. It organises all types of work under the concept of cases and tasks. A case is an activity that involves several tasks and is required to be completed in a specified manner within a specified time. There is an case officer responsible for each case.

IC21 requires the development work to be handled by specialists. The specialists handle the different areas of the development work, such as the user interface, the logic and the reporting. By specialists, they acquire the insight and knowledge. becomes more productive and deliver a better standard of work.

6. IC21 is for the future

An insurance company should us IC21 for new products, or for existing products that are sold in the future. Some of the existing products may have to be simplifed, so that they can be more easily handled by IC21. They can be managed by a separate group of employees, who may be taken from the existing employees or recruited separately.

The existing products of the company should continue to be handled by the existing employees using the legacy system. The existing processes and business does not need to be changed.

The company may have to operate two separate systems over a few years. During this time, the insurance company will come to understand the features, benefits and weaknesses of IC21. The business strategy can be modified and improved through experience. As it involves new business (and not the old business), it will be easier to handle the changes. It is a light weigh approach.

We should avoid customising the IC21 system to fit the old processes and practices. Instead, the strategy is to transfer the existing products into the new IC21 platform when the insurance contracts come up for renewal. For long term life insurance contracts, we can encourage the customers to upgrade to the new products by offering favourable terms to them. 

The key question is:

"If you have the chance to start a new insurance business, do you want to adopt the practices of the past, or the strategy for the future?"

7. A work of art

Designing an excellent computer system is like a work of art. Many people can paint a scenery, but the great artist has a special way of making his painting alive and appealling.  I hope that IC21 can be like a work of art, that is developed with insight and passion.