The better the question. The better the answer. The better the world works.

Redefining the insurance industry through digital transformation

We helped build a digital NewCo based on simplicity, transparency and trust. 

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The better the question

How can an insurance company rebuild for the future?

Building an enterprise strategy with a cloud-first approach

A global life insurance company with more than $4b in annual revenue wanted to spin-off its US life insurance and annuity business. The mandate was that the NewCo become a “future-state” insurer that would redefine the industry and simplify the insurance landscape. This required an enterprise strategy and implementation plan that would transform their business and focus on a “cloud first” mindset.

The legacy company was battling complexity from a process, technology and people perspective. The team was challenged with “how do we take a blank sheet of paper and redefine what good looks like for the insurance company of the future?” With the industry still in a low-growth environment, the insurer also needed to create something different that would accelerate its own growth. They wanted the new entity to be digital, but needed to rethink how that would affect the customer experience and the supporting systems. Most importantly, how would they pass the savings on to the customer?

The client wanted to simplify the insurance landscape, not only from a product perspective, but the way a client or advisor interacts with their organization.
David Holtzman
EY Global Insurance Transformation Leader
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The better the answer

Defining the future and what “good” looks like

Focus on guiding principles of simplicity, transparency and trust

The team engaged with the company over a year prior to the spin-off to begin designing the future state strategy. Guiding principles were defined, focusing on cloud-first and cost-optimization, along with designing a lean and agile operating model. The team worked toward the company’s goal of becoming a low-cost insurance provider. The EY team served as both a strategic advisor and tactical leader in helping the longtime client “get digital” and transform a critical business. Over 100+ projects were chartered to separate essential systems and business operations from the parent company to the NewCo. 

The process began with what we call “business architecture,” where we took the organization apart function by function from the front office through the back office to determine what it needed to achieve from a people, process and technology perspective in three years. We worked with the business, focusing on three guiding principles: simplicity, transparency and trust (from an advisor and client perspective). 

The engagement scope included systems integration, business integration, project management and change management across every element of the value chain including: 

  • Business and enterprise architecture
  • IT strategy, data management and security 
  • Finance, treasury and procurement
  • Actuarial
  • Tax
  • Human resources
  • Legal and records management
  • Marketing and distribution
  • Quality management

For the technology phase, the team explored achieving the agreed-on goals in an outsourced environment, such as the cloud or platform-as-a-service, and how to outsource functions that were not strategic. 

The components of the EY approach and the transformation playbook include:

  • Designing and distilling an enterprise technology and operational strategy: defining guiding principles and designing a lean and agile operating model to become a low-cost insurance provider.
  • Prioritizing cloud transformation projects: focusing on existing core business services and building out a new cloud based and a SaaS infrastructure.
  • Designing and executing a future state roadmap: developing an advanced project framework with a cloud-first mindset, assisting in the selection of tools and vendors for the build-out, and defining critical milestones.
  • Engaging and aligning with key stakeholders.
  • Developing a detailed dashboard for executive reporting: including cloud migration project status, cost savings, projected cost models, hiring plans and operational transformation initiatives.

These digital enablers were applied to execute the transformational plan: advanced analytics, cyber risk, blockchain, digital architecture, robotics and intelligent automation and next-generation data. This included reporting dashboards and performance metrics as well as IT, financial and resource management.

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The better the world works

Transforming to a new digital life operation

A future state low-cost provider, under a different brand

The client is saving $150m in annual expenses with at least $46m attributed directly to technology.

The company is executing on a transformational plan to move all IT applications and services to the cloud. This includes policy administration, underwriting, customer distribution and the investment platform. Some of these migrations are moving to new sourcing models, a mix of SaaS and third-party providers, while others are being custom built within the cloud environment. As a result, the client is saving $150m in annual expenses with at least $46m attributed directly to technology. 

 

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