For some time, life & annuities carriers have suffered from a multitude of legacy platforms, with each implemented to handle a particular style of product that was either not handled by its predecessor or was added through the acquisition of a set of blocks from another carrier. The resulting stable of platforms has always been expensive to maintain. In recent years, this has been compounded by the increasing importance of digital customer experience and the ability to launch new products quickly.

The pandemic has further emphasized these needs with consumers increasingly moving online, the need for new types of insurance products, and the vast majority of companies increasing their digital transformation emphasis. While most of Infosys McCamish’s current pipeline is driven by mergers & acquisitions and platform rationalization and optimization to modernize legacy environments, they have also onboarded new clients to provide end-to-end services for open blocks, becoming a viable partner for organizations looking to expand their new business pipeline.

Infosys McCamish Focuses on Client Interaction

Indeed, while life companies need to launch new products at speed, insurance product functionality is now increasingly taken as table stakes. Life & annuities producers are now much more focused on client interaction functionality. This includes the omni-channel experience and the ability to deliver a zero-touch digital engagement, incorporating, for example, machine learning to deliver straight-through processing and next-best actions.

In line with these requirements, Infosys McCamish has taken a 3-tiered approach:

• For policy owners & agents: aiming for zero-touch, omnichannel, and responsive design via portals, e-delivery, e-sign, smart video, SMS notify, and chatbots
• For operations: aiming for ‘one & done’ via the use of workflow, dashboards, content management, and document management
• Core administration functionality: aiming for seamless integration via APIs together with an extensive product library.

Infosys McCamish’s preference is to convert policies from client legacy platforms to its own VPAS platform. Its conversion accelerator identifies data cleanliness and produces balance and control reports before moving the policy data to VPAS. Not all data is moved to VPAS, with data beyond the reinstatement period being moved to a separate source data repository. Infosys McCamish will aim to have 13-24 months of re-processable data on its platform, converting all the history as it was processed on the original platform so that in the future, it is possible to view exactly what happened on the prior platform.

VPAS supports a wide range of life & annuity products, including term life, traditional life, universal life, deferred annuities, immediate annuities, and flexible spending accounts, and Infosys McCamish estimates that on mapping a carrier’s current products with the current configurations in VPAS, there is typically around 97% full compatibility. VPAS currently supports ~40m policies across 22 distinct product families.

However, where necessary or where conversion for some policy types is impossible, it can also wrap its customer experience tools around legacy insurance platforms to provide a common and digital customer experience. Infosys McCamish platforms make extensive use of an API library that supports synchronous and asynchronous communication between Infosys McCamish systems and customer systems.

Incorporating “Smart Video” into the Customer Experience

Infosys McCamish has enhanced its customer experience to enable policy/contract owners to go beyond viewing policies online and transact in real-time, further introducing:

• Mobile App and chatbot functionality
• Smart video, which uses APIs to extract data and present it to the customer in video form
• Wearables to support wellness products.

Customers can view their billing and premium information and obtain policy quotes online, with personalized smart video used to enhance the customer experience. They can also initiate policy surrenders online. Depending on carrier policy, surrenders to a certain value are handled automatically, with higher value surrenders being passed to a senior person for verification. Similarly, if a customer is seeking to extend their coverage online, the request is routed by the workflow to an underwriter or senior manager. DocuSign is used to facilitate the use of e-signatures rather than paper documents. All correspondence can be viewed online by customers, with AI-enabled web chat used to support customer queries.

Digital adoption depends on carrier policy and is running at ~25%, with customers being prompted to use digital in all correspondence. Single-touch and no-touch processing account for ~75% of transactions.

Workflow & Dashboards Guiding Agents to Reduce Time to Onboard

Infosys McCamish has integrated BPM and workflow and low-code development to support the back-office and call center service layers to provide operations with inbuilt automation to achieve increased levels of straight-through processing and fewer opportunities for manual errors. It incorporates business rules so that data is only keyed once with, for example, relevant customer updates applied to one policy type being applied across all of their policies.

The VPAS customer service work desk is built on Pega, with the workflow configured for contact center and back-office services and supporting the customer and agent self-service portals.

The agent dashboard is dynamic with the view shown based on the agent role, and the call center dashboard provides drill-downs on service requests by type, SLA performance details such as average handling times, and the full audit trails of each transaction.

The workflow also guides the call center agent through the steps in a transaction, provides scripting, and uses AI to recommend additional actions when communicating with a customer. This improves the quality of each interaction and significantly reduces the time taken to train new agents.

The above is supported by experience enablers underpinned by the data warehouse, which is updated in real-time as changes are made in the policy administration system. The data warehouse is accessed via APIs by Infosys Nia analytics or third-party tools such as PowerBI or Tableau.

Product Configuration Based on Cloning Existing Products

New products are typically created within the product management module by cloning an existing product or template and business rules; for example, customizing to add or remove certain features or coverages, rather than by creating new product features and functionality.

VPAS new business supports digital new business, including E-App and underwriting case management, and integrations with other new business platforms such as iPipeline and FireLight.

Agent Management & Compensation Increasingly Bundled with Product Administration

In addition to the VPAS life and annuity product administration system, Infosys McCamish’s life & annuity platforms also include PMACS, a producer management & compensation system, supporting agent onboarding, licensing, and commission management.

Infosys McCamish is experiencing a greater requirement for end-to-end capability, with PMACS increasingly being bundled with VPAS. The emphasis within PMACS has moved beyond commission management, where the system shows the agent how each commission was calculated, to agent onboarding, licensing, and appointments, allowing agents to view their pipelines and their client policy portfolios.

PMACS has also moved beyond supporting life & annuities and group & critical illness to support property & casualty.

Summary

Infosys McCamish is increasingly looking to assist life & annuities carriers in the adoption of modern digital platforms, and their VPAS ecosystem emphasizes:

• Digitalization, with a high emphasis on separation of systems of engagement from systems of record
• Componentization, to facilitate low impact enhancements and speed to market
• Self-service for both customers and agents, in support of zero-touch processing and multi-channel access
• Integrated BPM and workflow and low-code development in support of the back-office and call center service layers
• Use of CI/CD to identify the impact that changes in one component will have on other software components.

John Willmott and Rachael Stormonth

In 2016, Atos was awarded a 13-year life & pensions BPO contract by Aegon, taking over from the incumbent Serco and involving the transfer of ~300 people in a center in Lytham St Annes.

The services provided by Atos within this contract include managing end-to-end operations, from initial underwriting through to claims processing, for Aegon's individual protection offering, which comprises life assurance, critical illness, disability, and income protection products (and for which Aegon has 500k customers).

Alongside this deal, Aegon was separately evaluating the options for its closed book life & pensions activity and subsequently went to market to outsource its U.K. closed book business covering 1.4m customers across a range of group and individual policy types. The result was an additional 15-year deal with Atos, signed recently.

Three elements were important factors in the award of this new contract to Atos:

• Transfer of the existing Aegon personnel
• Ability to replatform the policies
• Implementation of customer-centric operational excellence.

Leveraging Edinburgh-Based Delivery to Offer Onshore L&P BPS Service

The transfer of the existing Aegon personnel and maintaining their presence in Edinburgh was of high importance to Aegon, the union, and the Scottish government. The circa 800 transferred personnel will continue to be housed at the existing site when transfer takes place in summer 2019, with Atos sub-leasing part of Aegon’s premises. This is possible for Atos since it is the company’s first life closed block contract and the company is looking to win additional deals in this space over the next few years (and will be going to market with an onshore rather than offshore-based proposition).

Partnering with Sapiens to Offer Platform-Based Service

While (unlike some other providers of L&P BPS services) Atos does not own its own life platform, the company does recognize that platform-based services are the future of closed book L&P BPS. Accordingly, the company has partnered with Sapiens, and the Sapiens insurance platform will be used as a common platform and integrated with Pega BPM across both Aegon’s protection and closed book policies.

Atos has undertaken to transfer all of the closed block policies from Aegon’s two existing insurance platforms to Sapiens, and these will be transferred over the 24-month period following service transfer. The new Sapiens-based system will be hosted and maintained by Atos.

Aiming for Customer-Centric Operational Excellence

The third consideration is a commitment by Atos to implement customer-centric operational excellence. While Aegon had already begun to measure customer NPS and assess ways of improving the service, Atos has now begun to employ further the customer journey mapping techniques deployed in its Lytham center to identify customer effort and pain points. Use of the Sapiens platform will enable customer self-service and omni-channel service, while this and further automation will be used to facilitate the role of the agent and enhance the number of policies handled per FTE.

The contract is priced using the fairly traditional pricing mechanisms of a transition and conversion charge (£130m over a 3-year period) followed by a price per policy, with Atos aiming for efficiency savings of up to £30m per annum across the policy book.

Atos perceives that this service will become the foundation for a growing closed block L&P BPS business, with Atos challenging the incumbents such as TCS Diligenta, Capita, and HCL. Edinburgh will become Atos’ center of excellence for closed book L&P BPS, with Atos looking to differentiate from existing service providers by offering an onshore-based alternative with the digital platform and infrastructure developed as part of the Aegon relationship, offered on a multi-client basis. Accordingly, Atos will be increasingly targeting life & pensions companies, both first-time outsourcers and those with contracts coming up for renewal, as it seeks to build its U.K. closed book L&P BPS business.

HCL provides closed book life insurance outsourcing services, and is currently engaged in RPA initiatives with three insurance clients.

In order to capture customer data in a smarter, more concise way, HCL is using ‘enhancers’ at the front end, providing users with intuitive screens based on the selected administrative task. These input forms aim to request only the minimum, necessary data required with RPA now being used to transfer the data to the insurance system, ALPS, via a set of business rules.

For example, one RPA implementation undertaken can recognize the product type, policy ownership, values, and payment methods, and it can prepare and produce correspondence for the customer. If all rules are met, it is then able to move onto payment on the due date. This has been done with a view to reducing the number of touchpoints and engaging with the customer only when required. Indeed, HCL is working with its clients to devise a more exhaustive set of risk-based rules to further reduce the extent to which information needs to be gathered from customers.

Seeking a 25% cost take-out in high volume activities

On average, 11k customer enquiries are received by one HCL insurance contact center every month, and these were traditionally handed off to the back office to be resolved. However, HCL is now using RPA and business rules to enable more efficient handling of enquires/claims with limited user input, with the aim of creating capacity for an additional 4.4k customer queries per month to be handled within the contact center.

Overall, within its insurance operations, HCL is applying RPA-based business rules to ~10 core process areas that together amount to around 60% of typical day-to-day activity. These process areas include:

• Payments out, including maturities, surrenders, and transfers

• Client information, including change of address or, account information

• Illustrations.

These processes are typically carried out by an offshore team and the aspiration is to reduce the effort taken to complete each of them by ~25%. In addition, HCL expects that capturing customer data in this new way will shorten the end-to-end journey by between 5% and 10%.

One lesson learned has been the need for robust and compatible infrastructure, both internally (ensuring that all systems and platforms are operating on the same network), and with respect to client infrastructure; e.g. ensuring that HCL is using the same version of Microsoft or Internet Explorer as the client environment.

HCL’s original contract with Chesnara dates back to 2005. However, HCL also had a separate L&P BPO contract with Save & Prosper, who Chesnara purchased from JPMorgan Asset Management in December 2010. More recently, Chesnara also purchased Direct Line Life, whose L&P operations are currently in process of being transitioned to HCL. This latest acquisition by Chesnara adds a further 150,000 policy holders to the portfolio currently administered by HCL.

Accordingly, these three historically separate contracts are now being consolidated by Chesnara and HCL into a single contract to provide a consistent suite of services and SLAs across policy administration services, fund accounting, investment administration, and certain actuarial valuation and reporting services.

At the service delivery level, this involves handling all policies within a similar operating model with workflow for all policies handled through HCL’s OpEX (Operational Excellence) work management and quality assurance tools. In addition, policies are being migrated, where feasible, on HCL’s ALPS insurance platform. For example, the policies transitioned from Direct Line Life are currently being migrated onto ALPS. However, as usual, it is not feasible to handle all policies on a single platform and a small number of legacy systems will remain in place across the various books, handling approx. 50,000 policies.

In addition, within the new contract, HCL is working to ensure that service levels and service metrics are consistent across all Chesnara books of business, and HCL will be enhancing the SLAs and service metrics in place to ensure consistency with regulatory conduct risk expectations over next 18-months. This involves developing an increased focus on customer experience e.g. introducing proactive calling where there may have been a customer service issue before this issue turns into a formal complaint. The benefits of this type of approach include operations cost reduction, by reducing the level of formal complaints handling, as well as delivering improved customer experience.

The pricing mechanisms used across the various books are also being standardized and moved from pure per policy charging to a combination of per policy and activity-based pricing. For example, the pricing of core policy administration services will still tend to be per policy driven but will be rationalized by policy type across books. However, the costs of many accounting-based activities are not sensitive to the number of policies managed and so will be priced differently to achieve better alignment between service pricing and the underlying cost drivers.

Elsewhere in the industry, changes in the fiscal treatment of retirement income is forcing companies to re-evaluate their retirement product strategies and their approaches to administration of annuity and retirement books. The new legislation coming into place in the U.K. means that companies with small annuity books may no longer be adding significantly to these and so may need to treat these differently in future. This potentially creates opportunities both for consolidators and companies such as HCL who support their operations.