Union Insurance embarks on a digital drive

UAE-based insurer deploys financial applications in the cloud, pioneering a new era for insurance in the region

Tags: Cloud computingDXC Technology (www.dxc.technology/)Union Insurance CompanyUnited Arab Emirates
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Union Insurance embarks on a digital drive This is one of the very first instances of a core insurance application hosted in the cloud by an insurer anywhere in the world, says Srivastav.
By  David Ndichu Published  June 20, 2018

When Anshul Srivastav, the CIO of UAE-based Union Insurance Company, joined the insurer two and a half years ago, he created a strategy and mandate to digitally transform the organisation, with approval from all stakeholders in the company.

However, the ambition by Srivastav and his team to disrupt the industry was held back by a legacy infrastructure, incapable of responding to the digital era.

A transformation in the company’s infrastructure, from the ground up, was acutely needed. It was decided from the very beginning that Union Insurance would pursue a cloud-first IT strategy. Cloud allows fast roll-out of services with minimal infrastructure investment, and the agility to adapt fast to changing IT trends. The first application to be hosted on the cloud was Office 365, completed within the first two months of this digital journey. Three months later the DR site had been migrated to Azure cloud.

BUSINESS NEED

These early implementations laid the foundation for taking this digitalisation journey to the next level. “The benefits of cloud and digitalisation were at this point apparent. Now we could pursue the next stage of our cloud journey,” says Srivastav. This next step in the journey was the deployment of core applications in the cloud, the focal point for any digital led financial institution.   Union Insurance IT reached out to DXC Technology, whose range of insurance-specific products are employed by insurance companies worldwide.

The choice of DXC was based on its range of dedicated insurance products that have been in the market for decades and which are used by insurers all over the world. Union Insurance deployed DXC’s Integral, an end-to-end insurance solution that covers the entire insurance lifecycle, from point of sale to claims and payouts, with all functions accessed from a single web portal. Integral also delivers the complete insurance administration with product configuration, workflow, business analytics, underwriting, mobility solutions and more.

Because Integral is based on open standards, insurers can select the components they need and easily integrate them with in-house or third-party systems. Integral functions include customer administration, agent administration, proposal capture/quotation, policy processing, claims and distributions, and accounting.

One of the applications, Integral Life is already live, while the Integral Health product will start running soon, explains Srivastav. “Using DXC technology, we were able to deploy these core systems on the cloud. This is one of the very first instances of a core insurance application hosted in the cloud by an insurer anywhere in the world,” says Srivastav.

DXC Technology was the only company that could tick all the right boxes for the insurer, says Srivastav. “It is very difficult to source region-specific product in this part of the world. DXC not only offers products that are already successful in other parts of the world but can customise them to the region, particularly for a healthcare industry in the Middle East which has very specific requirements,” he adds.

In the UAE for instance, insurance companies have to navigate through two different regulators to issue health insurance, in addition to the presence of many ecosystem integrators in the market.

For this particular project, DXC chose to run the applications on Amazon Web Services (AWS). “DXC’s strength lies in, first, the resources we have in the region and globally, and secondly, our longstanding ties with global cloud providers like AWS. Of course, success is a two-way street — you cannot have an effective implementation if you don’t have a professional and knowledgeable customer on the other end,” says Sameh Fouad, general manager, DXC Technology Middle East and Africa.

Fouad says a crucial part of the implementation process is a delivery team in the organisation that understands the application, that has an excellent grasp of the cloud platform and that understands what it takes to migrate either a cloud-ready application or a non-native application to the cloud. “Deploying systems to the cloud is a sensitive undertaking because you are operating in a live environment and the process has to be completed without interrupting normal service,” Fouad says.

Srivastav says a cultural shift within the organisation was required for such a major project. “You need to sway the prevailing mindset in the way business is carried out. You need to convince the right people on the business side that today’s world will not be the same as tomorrow. A lot of discussions on the financial aspects of the implementation needs to be done in terms of current and future costs and its direct impact on the bottom line,” he adds.

“Fortunately, we never talk technology to business; we only talk business to business. And we can be able to explain how particular technology empowers the business to achieve the positive financial result management seeks. When doing profit & loss (PnL) accounting for our proposition for the DXC Insurance solution, we clearly showed how the upfront costs and the savings we were projecting could be achieved,” says Srivastav.  To prepare for the new digital environment, the company embarked on a major reskilling process for the last few years for the IT team to adapt to these changes, Srivastav explains

BUSINESS BENEFIT

The agility inherent in the cloud makes it easy and cost-effective to test new products in the market before deployment. “We are now on an on-demand setup where we can easily test products on the cloud and if they do not work, we can very easily abandon them with little financial harm. We are now testing products based on advanced technologies such as blockchain, IoT, AI etc.”

Integral is the foundation, on top of which Union Insurance has built various other digital services. One of these is an online marketplace for buying insurance policies including motor, health and life policies. “We are pushing omnipresence which includes online and mobile insurance sales. All these transactions are pushed into these core systems for processing on the back end, from accounting to claims,” Srivastav explains. Union Insurance is today one of the few insurance companies with the ability to sell group policies through a web portal, says Srivastav. This capability has been further extended to partners and banks that offer bancassurance services.

The savings have been significant, enabled by subscription-based services, where Union Insurance only pays on demand.  “The power has shifted to us — we now control the cost, the infrastructure and any disruptive initiatives we want to undertake,” Srivastav says.

The insurer’s IT setup has been completely transformed, says Srivastav. With that confidence, the company can now explore uncharted areas of the insurance market and create products for them.

“Penetration of insurance is relatively low regionally and globally, so Union Insurance can now explore various products for different segments. Because we can test products before deploying them, we can support any business proposition with actual ROI to management.” With systems running optimally on the cloud, the IT team can now explore other advanced technologies such as IoT and AI, as well as blockchain. “Cloud makes it easier to explore all types of digital technologies,” Srivastav adds.

Take motor insurance as an example. The process of underwriting motor insurance is a complex one. Someone applying for car insurance in the UAE, for instance, has to submit three different documents — Emirates ID, driving license and car registration. However robotic process automation (RPA) that will soon go live at Union Insurance will go a long way in simplifying this process. With RPA, the applicant only needs to upload photos of these documents onto an online platform. The system automatically extracts the information required, processes it and issues a policy in less than 10 minutes. The current process, in contrast, takes 4-8 hours, requiring human interaction throughout. “This is a marked improvement in sheer efficiency. This service extends our business to twenty-four hours a day from a typical eight, increasing the availability of our services has grown threefold,” Srivastav says.

A key consideration for Union Insurance while going to the cloud was to ensure data residency requirements were addressed in addition to data privacy and cybersecurity. As part of the cloud migration, Union Insurance signed up for managed security services from DXC which sees the IT provider take up round the clock threat intelligence practice, leveraging the former’s expertise in the area. “Organisations such as Union Insurance can concentrate on their business while leaving the IT problems for us to solve. We want to solve these IT problems so customers can focus on their business,” says Fouad.

Union Insurance has now embarked on the next step of its partnership with DXC that will see the company migrate the complete IT infrastructure and workloads to Amazon Web Services DXC will work with Union Insurance to migrate its data centre infrastructure and core business applications to AWS. This will provide Union Insurance with greater flexibility to meet seasonal customer demands, a scalable back-end infrastructure and better return on investment (ROI). The migration will comprise building and maintaining its complete cloud infrastructure, inclusive of license consolidation, application performance, business availability and continuity, and cybersecurity.

DXC recently announced an expanded alliance with AWS to make it simpler for DXC’s enterprise customers leverage more cloud services. “Digital for us means making life easier for everyone, whether its employees or customers. Secondly, it is about identifying the pain points of customers, partners and enhance our reach to them,” Srivastav concludes.

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