Specialty insurer standardises policy platforms to deliver operational efficiencies ahead of IPO

A global specialty insurance organisation had been growing rapidly through a roll-up strategy to position itself for an initial public offering (IPO). The acquisitions created multiple underwriting and policy management processes and systems that were hindering operational efficiency. Executive leadership understood that to achieve the highest equity valuation possible it would need to demonstrate to the market that it had built a culture of operational excellence. With that objective in mind, it set out to standardise processes and technology used by the acquired and legacy businesses.

Standardisation would not only facilitate integration of the acquisitions, drive costs down and enhance regulatory compliance management, but also support the organisation’s growth targets by enabling the organisation to cross-sell products across geographies.

Two workstreams

Protiviti had become the go-to provider for the organisation’s process improvement needs, given its deep understanding of the issues and challenges facing the organisation and having successfully assisted the organisation on prior projects, including acquisition integrations and systems implementations. Protiviti was brought in to manage the implementation project across two workstreams: one for the commercial lines business, and one for the personal lines business.

The tasks at hand included defining a strategy for each line of business, rolling out the strategies across the organisation’s 46 offices, and centralising a support function for back-office and underwriting teams.

The commercial lines strategy focused on creating a common underwriting platform and policy management system and a new imaging system, which would result in a central policy management platform and document repository. Protiviti oversaw a systems rationalisation to identify the best candidate for the common platform based on business requirements.

The personal lines strategy was designed around a uniform user interface that could be leveraged by underwriters and agents. It would serve as a one-stop shop for generating quotes, binders and policies and resolve product offering constraints due to non-integrated systems that had resulted in lost revenue.

The workstreams focused on developing a deep understanding of each underwriting office to ensure its successful transition to new systems and processes. Achieving this knowledge required analysis of the organisation’s structure, skill and product mix, product markets, and processes supporting operations.

Obstacles to the strategy rollouts

The rollouts encountered two setbacks while in process.

First, the executive leadership that the workstreams reported into – the chief financial officer, who had advocated for the Protiviti engagement – stepped down. The departure was followed by an organisational restructuring, resulting in a series of reporting line changes that impacted the composition of the team assigned to each workstream.

Protiviti facilitated open lines of communication throughout the transitions to minimise any loss of momentum.

Second, the personal lines workstream recognised that the underwriting and policy management platform used by a new acquisition that accounted for about one-third of the organisation’s direct written premium may be a better fit for the personal lines strategy than the platform that had been designated.

Protiviti worked with the organisation’s director of technology on an analysis to drive consensus among executive leadership – including the new chief operating officer and chief data officer that the workstreams now reported into – on switching platforms. The analysis demonstrated the alternative platform would result in lower costs, accommodate a growing user base and shorten the rollout timeline. As part of the exercise, Protiviti developed a tool for the decision-makers to weight and score the relevant criteria for switching, including level of effort to implement the new platform, cost, time to completion, risk and technology feasibility.

Executive leadership decided the best path forward was to refocus the personal lines strategy on the alternative platform.

The rollout of the commercial lines strategy entailed key change management activities. Protiviti facilitated the execution of these activities, including user acceptance testing alongside user training, post go-live support programs and a communications plan to address employee concerns.

Consolidating back-office support

Accompanying the rollout of a streamlined underwriting platform and policy management system for both the commercial and personals lines of business, Protiviti worked with the organisation to stand up an expanded centralised back-office function to service policies throughout each stage of the policy lifecycle. By centralising back-office support, the organisation effectively transitioned the administrative duties previously performed by underwriters and standardised the way that business was processed across the organisation, driving efficiency and reducing processing errors. This effort is projected to reduce headcount by 24% across the back-office support group.

Delivering and improving results

Over a period of 20 months, the commercial lines workstream has migrated more than 500 employees across 43 offices accounting for more than 600,000 policy records onto the common platform.

The personal lines implementation, which should take over two years to complete, is forecast to drive a 3%-7% increase in future premiums depending on the office and a $1.5 million reduction in operating expenses.

Operationally, the rollouts delivered on several fronts, creating a stronger organisation. They reduced the number of different systems and applications used by each office; deployed a single user interface/desktop across all offices; established a single source for data and processing; improved data governance over common data sets to improve downstream reporting and compliance; integrated an imaging platform to drive efficiencies during the application and quoting process; centralised binding  and policy issuance, and billing, to drive efficiency and reduce errors; created a back-office support function that provides a critical resource for users.

The organisation launched its IPO to strong investor demand and continues to grow in part strategically. Underscoring the success of the rollouts was a philosophy of continuous improvement. As a result, subsequent office migrations have become more efficient.