SA’s PPS delivers global first for IBM
The success of specialist insurer PPS’s new, locally-developed IT system has become a global case study for IBM.
‘IBM tell us they have never seen this before,’ says PPS Head of Life Administration and Systems, Stephan Clark, ‘and they are now using it as a global selling point!’ Clark is referring to the new IT solution at PPS, which has been locally developed using IBM’s Insurance Application Architecture (IAA). ‘IAA was developed by IBM in the 1990s. Consisting of various business modules, it is used all over the world in various applications. But PPS needed a complete solution that could not only take us into the future but also overhaul our legacy application architecture. We needed something that could work end-to-end, right across our business, also allowing full two-way communication with our members and financial advisors.’
Working with Cape Town-based IBM partner, Silvermoon Group, one of PPS’s main goals was to decrease the length of time taken to introduce new products to market. ‘The way the architecture of legacy systems works means that there are many dependencies and a great deal of duplication of data. Changing even a single rule as part of a new product introduction means changing not just one part of the system, but many. It is fraught with risk,’ says Clark. ‘PPS’s client base consists exclusively of graduate professionals; whose needs are constantly changing and we had to ensure we could keep up.’
Silvermoon started work on the project three years ago, developing the new solution on the PPS platform. Silvermoon Director, Quenten Friday, says it would not have been possible with a different client: ‘PPS is the ideal catalyst; thanks to them it has now been achieved and becomes an opportunity for others.’
Clark confirms that the new system has enabled PPS to deliver new products at an unprecedented rate, but notes other critical benefits. ‘South Africa’s insurance market is very tightly regulated; we have been able to reduce our audit findings – items requiring remedial action – by 80%. We’re also seeing an improvement to the top line: premium collection rates are up by as much as 10%. Application development costs are down 50% and we have eliminated more than 90% of the system code (measured at 2006 for like-for-like functionality). PPS is a mutual society,’ explains Clark, ‘which means that total cost-of-ownership savings and efficiencies are passed directly back to members in the form of an annual surplus distribution. The 2009 technology costs are already projected lower than 2008 and 2008 was lower than 2007.’
Clark says the system’s technical foundation is now very strong, and members and their brokers are reaping some of the benefits of the system. Already, they experience greater convenience with direct processing of memberships and faster turnarounds of services. Soon they will also be able to submit claims via the Internet. Besides allowing the member to have direct control over his or her profile, PPS will also make it easier for members to do business and manage their finances.’ However, Clark is adamant in one opinion. ‘The system is not a substitute for a broker. Members need expert financial advice and thanks to the system, brokers can be more efficient. The PPS system will be able to accept claims immediately from a broker’s laptop and we are enhancing our underwriting processes and protocols to minimise delays. The CRM capabilities are huge; almost every angle and detail about a member can be tracked and analysed quickly and accurately.’
Clark acknowledges that there have been some challenges from the members’ perspective during the implementation but promises that the long-term gains will be worth it. ‘Communication will be fully integrated. If one change is made to a policy or member’s details, it will automatically update all relevant, corresponding details of all of the member’s policies.’ Speed, efficiency and a high degree of automation are all things that Clark believes will ultimately benefit the member’s share of the profits of PPS. ‘The system is strong, powerful, and its integrity is beyond doubt. It’s now time for members to enjoy the system, and PPS is going to make sure that happens!’ says Clark.
