Transcript of Copyright © 2014 Oracle and/or its affiliates. All rights reserved. | Time to Transform: Business...
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Time to Transform: Business Realities Demand Newer Life
and Annuity Core Systems David Shively October 1st 2014 2 Oracle
Confidential Internal
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Program Agenda Insurance Market: Overview &
Assessment Time of Challenges - Business Realities Transformation
through System Replacement Transformation through Outsourcing Time
to Transform 1 2 3 Oracle Confidential Highly Restricted3 4 5
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Market Assessment Growth In 2013, global life insurance
premiums written were USD 2 608 billion, with growth slowing to
0.7% from 2.3% in 2012 (Source - Swiss Re Sigma ) Strong growth in
Western Europe and Oceania was offset by a contraction in North
America and stagnating sales in advanced Asia. Premiums contracted
by 7.7% in the US. This was mainly because large corporate deals
that had boosted group annuity business in 2012 were not repeated.
In emerging markets, life premium growth improved to 6.4% in 2013.
Growth was solid in Latin America and Africa, and resumed in China
and India. In advanced countries, post-crisis average premium
growth has been well below pre-crisis levels. In emerging markets
the same is true in emerging Asia only. This is because of sharp
declines in China and India coming after regulatory changes in both
in 2011.
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Market Assessment Interest Rates have been falling for
the last three decades and are now at historic lows. (Source -
Swiss Re Sigma ) According to sigma estimates, in 2012 about USD 27
000 billion of funds (about 12% of global financial assets) were
managed and invested by the global insurance industry. Thus a one
percentage point reduction in interest rates would ultimately cut
insurers investment income by about USD 270 billion per year. That
represents around 6% of global annual premium income (in 2012
terms).
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Market Assessment Life insurers across the globe are
looking for better growth and profitability. Unfortunately, their
legacy policy administration systems have been largely inflexible
and unable to adapt to constantly changing market dynamic. (Source
- Capgemini) Leveraging multiple distribution channels and managing
a diverse product range are other important drivers in the need for
transformation of the policy administration function. Regulatory
compliance has also become more critical due to changing
regulations and global expansion. The life insurance industry is
increasingly looking for vendor packages and outsourcing to control
cost and leverage best practices.
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Market Assessment There are significant opportunities
from the emerging markets as awareness of the need for advice
around Financial Services products increases especially amongst the
emerging middle classes. (Source - E&Y)
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Market Assessment The life insurance industry is
increasingly looking for vendor packages and outsourcing to control
cost and leverage best practices. (Source - Capgemini) These
changes have led to an increase in the following key trends related
to policy administration for life insurance firms globally:
Consolidation of policy administration systems. Adoption of vendor
packages for policy administration. Outsourcing of policy
administration functions. Need for a policy administration system
that supports a global expansion strategy.
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Insurance Market: Business Realities Insurance
companies globally willing to extend their IT Budget Demand for
Policy Administration has been on consistent rise through last
year
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Quick Assessment Business Realities SOME GROWTH SOME
CONTRACTION FALLING INTEREST RATES LEGACY ISSUES INVESTMENT
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Options to approach Transformation & Gain
Competitive Advantage Wrap Replace Outsource Renovate
Transformation Options Transformation Options
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | End of Life Challenge for Legacy Applications Wrap
Replace Outsource Renovate Transformation Options Transformation
Options
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Transformational Legacy Replacement
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Transformational System Replacement Unit Linked
Endowment System Individual Annuity System Traditional Endowment
System Personal Pension System Group Management System Permanent
Health Insurance System Guaranteed Bonds System Protection Product
System Umbrella Funds System Common Front End Multiple Lines Common
Platform Common Front End Transform this Into this
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Time to Gain Competitive Advantage Respond rapidly to
changing market conditions Streamline operational models and cost
structures Resolve legacy system challenges to achieve long-term
operational excellence and profitability Adopt a balanced product
mix, shifting focus to protection rather than investment and
savings Respond to evolving customer preferences Explore expanded
investment allocation strategies
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Time to Transform In order to take advantage of all the
benefits of transformation & avoiding pitfalls of the
challenges, a new age Policy Administration System should ideally
be: Flexible, rules-based configuration, this speeds creation and
launch of products User-friendly visual configuration tool to
enable business ownership Able to manage all types of life
insurance contracts at both individual and group level across
multiple lines of business Integrated Support for New Business and
Underwriting Out-of-the-box functionality to accelerate speed to
market Product cloning promotes reuse of rules and decreases
development time Support for seamless SOA-based integration with
external applications
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Oracle Insurance Policy Administration
Industry-Leading, Fully Configurable, Rules-Driven Solution Full
record-keeping and transaction processing support for all types of
Life and Wealth products Highly configurable solution to adapt to
customer specific needs without having to compromise base
functionality Supports Full Policy Lifecycle New Business to Claims
Available on multiple technology platforms
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Supports Life, Annuity, & Group Life Term Whole
Life Universal Variable UL Joint Survivorship Unit Linked Other
Annuities Fixed Variable Immediate Deferred Equity Indexed Payouts
Other Riders Accidental Death Spouse/Child Long Term Care Return of
Premium Accelerated Death Benefit Other Group Term Life Disability
Income STD/LTD Critical Illness Dental/Vision Other Support Any
Product Through Rules-Based Configuration
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | OIPA Platform Support for Full Policy Lifecycle Focus
on Recent R&D Investments on End-to-End Policy Lifecycle
Support 19 Contract and Money Flow Issue / Activation Surrender
Partial, Systematic Withdrawal Billing / Money In Limited-pay
options Grace / Lapse Monthaversary, Anniversary Maturity
Accounting Fund transactions Dollar Cost Averaging Asset Rebalance
Interest Crediting Automatic Increase Rider Accounting APL Reduced
Paid-up NFO Extended Term NFO Dividend processing PUAs Paid-up
processing Policy / Client Changes Cancel / Freelook / Rescission
Reinstatement Rider Termination / Rescission Rider Add Face
Decrease Face Increase Smoker Status / Underwriting Change Non
Contractual Change Ownership Change Address Change Beneficiary
Change Payor Change DOB Change DBO Change Agents / Commissions On
Boarding Commissions Bonus Advances Chargeback Hierarchy management
License tracking Statement Claims and settlement Death ADB Claim
Waiver of Deductions Claim Monthly Disability Claim Children Term
Rider Claim ABR Claim Annualization Settlement payment Disability
income payment Claim assignment Claim adjudication Claim update
Claim verification with reinsurer Claim filing with reinsurer
Beneficiary determination and split Tax Considerations Required
Minimum Distributions 7702/7702A compliance processing Canada
exemption testing Withholding and reporting for Canadian
Registered/Non-Registered plans Withholding and reporting for US
Qualified/non- qualified plans MEC Permission / Update / Prevent
Material Change Exchange Update Outbound Exchange Loans Loan Loan
Capitalization Loan Repay Overloan Product Definition New
BusinessUnderwritingIssuanceCommissionsBilling Customer Service
Claims
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | OIPA - Open Architecture Advantage Web-based, built in
Java, and can be deployed on numerous technology stacks Open
architecture integrates with existing IT infrastructure and
maximizes system lifespan Fully SOA-enabled supporting integration
through Web Services Largest industry performance benchmark
conducted to date 100 million active policies cycle < 2.5 hours
Demonstrated high performance and scalability Ongoing commitment to
optimizing performance Highly Scalable and Proven to Support
Extreme Performance Performance Benchmark Environment Oracle
Insurance Policy Administration for Life and Annuity, Version 9.3,
and Oracle Exadata X2-2
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | OIPA - Platform Independent Supported Platforms
Application Server Database Version 11 WAS 8.5.5.0 WAS 7.x.x..x
(with JDK 1.6.x) Version 2008 R2 for SQLServer Version 5.8 Version
9.7 SP7 through 10.1 Fix Pack 2 Version 2008 R2 Version 10.3.4
Version 11.2.0.2 AIX 64 bit 7.1 (IBM P Series Hardware) IBM OS/400
Operating System
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Oracle Insurance Top of the Market 22 Source: Magic
Quadrant for North American Life Insurance Policy Administration
Systems Gartner (September 2014) Source: Gartner (September 2014)
The system architecture gives insurers the ability to externalize
business rules and product calculations to get products to market
more quickly and efficiently, while also reusing rules and
calculations with other systems via Web services. Oracle Insurance
Policy Administration for Life and Annuity is one of the most
highly configurable systems offered in the market. Oracle Insurance
Policy Administration for Life and Annuity is a single system that
supports a range of individual and group product lines (not
including health-related product lines).
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Life & Annuity Policy Administration Continued LOB
expansion at Securian, Genworth, and VOYA Implemented to manage
agent hierarchies and commissions for all distribution networks of
La Capitale Selected for roll-out of group and individual products
for Jamaican carrier NCB MIG selected OIPA for post-acquisition
consolidation with existing WULA business Implementing OIPA in
Nigeria for Old Mutual Recently selected for Group Life and Health
products at Guidestone Market Momentum Recent Production Rollouts
& New Sales
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Transformational Outsourcing
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Outsourcing on Legacy Applications - Issues Books
maintained on older platforms Vendor support ending Increasingly
expensive to own & maintain Difficult to respond to regulatory
changes Poor productivity Training overhead for users Limited
opportunity for multi tasking Maintaining/Monitoring of SLAs a
problem
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Outsourcing Considerations Oracle Confidential
Internal26 Most Important Considerations for Outsourcing Closed and
Open Book Operations, 2012 Not Important Very Important Source:
Capgemini Analysis, 2012; World Insurance Report 2012, Capgemini
and Efma
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Transformational Outsourcing Oracle Confidential
Internal27 Obtain the Best of Both Worlds Labor Arbitrage Hosting
& Managed Services SaaS Traditional BPO Transformational
BPO
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Benefits of OIPA Based Transformational BPO Oracle
Confidential Internal28 Support different product lines on the same
instance Product development agility and faster time to market
using configurable System of Record powered by Oracle Insurance
Policy Administration Flexibility to quickly adopt constantly
changing market demands & compliance requirements Reduced TCO
for carriers thru attractive price models Rationalized IT and
Infrastructure costs thru platform adoption RUN BETTER ON A MODERN
PLATFORM AT REDUCED COST Simplified technology eco-system to
support a single System of Engagement Reduced complexity and
redundancy Bring in effectiveness through operational dashboards,
BI reports etc. Single view of customer to advance operational
excellence & enhance customer experience Rewire critical
business processes leveraging deep domain knowledge &
technology capabilities Improved real time & STP capabilities
Different possibilities thru technology adoption (Improved
prevent-predict-process, alternative distribution & servicing
channels) RUN DIFFERENT USING BEST-IN-CLASS BUSINESS PROCESS
SERVICES
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. | Product Excellence Leadership Position in analyst
rankings for 7+ years Single platform for Group / Individual &
Risk-based / Investment products Most Investments in Any Modern PAS
Product Strong Capital Investment in Core Insurance Solutions
Significant Organic Investment over last 5 years True Vendor
Product / Solution Focus on license sales, not consulting revenue
Commitment to a strong product roadmap Homogenous Technology
Customer Focused Strategy Executive commitment to project success
Growing momentum in Group Life, mid-market, and emerging markets
Flexible Engagement Model Traditional License, BPS, Hosted, SaaS,
and BPO Options Why Oracle Insurance Policy Administration?
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- Copyright 2014 Oracle and/or its affiliates. All rights
reserved. |Oracle Confidential Internal30
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