Anatomy of a ‘Big Bang’ Conversion

Indiana Insurer Replaces Core Systems — Over a Weekend!

Most insurance companies are engaged in some sort of modernization effort, but more often than not, the work is focused on individual systems and subsystems. While the billing system may be getting some long-needed attention this year, the claims system may have to wait until next year — once that agency portal project is finally complete.

That piecemeal approach was exactly what Indiana Farm Bureau Insurance Company sought to avoid in replacing a hodgepodge of policy administration, client, claims and billing systems. In fact, the company replaced all of those systems for its homeowners line in a “big bang” conversion over one weekend.

“We decided to bite the bullet and implement all of these components in unison, and it’s been very successful for us,” explains Greg Clancy, senior vice president and CIO at Indiana Farm Bureau Insurance.

Ripping out and replacing core systems was clearly a high-profile project that would affect most the company’s 1,200 employees and 450 agents, so the project required a great deal of research and planning. Indiana Farm Bureau Insurance, the second largest property/casualty insurance company in the state of Indiana offering auto, homeowners, commercial, farm and life coverage, was struggling with maintaining older software and infrastructure.

The patchwork of systems was difficult for users to manage with numerous manual steps in the process. The underlying systems were difficult to upgrade and lacked configurability. For example, they couldn’t support multiple rating tiers and other new product attributes.

“We had seven different billing systems,” Clancy adds. “There is no reason to have that kind of situation. We were spending a lot of money in IT and getting very little business value in terms of innovation. Our main priority in updating our systems was consolidation. The challenge was to find the right technology that would enable us to integrate our multiple systems to improve customer service, process business faster and introduce new products sooner.”

Fully Integrated Approach

The company reviewed a number of systems on the market. “We talked informally to a lot of other CIOs to hear their opinions about the alternatives available and how they had worked out. The picture wasn’t really very pretty,” he recalls. “There were a lot more failures to choose from than success stories.”

Years ago, Indiana Farm Bureau had licensed policy management systems from CSC, a Falls Church, Va.-based IT services company. After speaking with CSC about its latest fully integrated software, the company chose CSC’s POINT IN for its farm and commercial portfolios and CSC’s Exceed for personal lines.

The Farm portfolio was converted to POINT IN in early 2007 but the largest share of the company’s base of about 1 million policies was in auto and homeowners. Rather than implementing each component of homeowners separately, IFBI chose a “vertical slice” implementation of its client, billing, homeowners and claims components simultaneously.

The system was implemented over Thanksgiving weekend 2007. The data conversion ran over two days, with two days of user validation of the system, and went live on Monday, following the four-day holiday weekend. During the course of the project IFBI conducted three dry runs of the conversion process, without a hitch.

“Everyone had to be up and ready to use the new system when it went live that Monday,” says Clancy. “Because of the extensive training we provided to our CSRs and agents prior to implementing the system, everyone was able to do that. The initial surge of help desk calls was manageable, and one month after implementation we actually had fewer daily issues reported to the help desk than with our legacy system.”

Improved Usability, Product Innovation

The results? Maintenance issues related to the old system are gone. Response times have improved and help desk tickets are down. “The system is much more intuitive for the users,” Clancy notes. “We now have a common look and feel across all of our policy management systems. We have enterprisewide client and billing capabilities, improved user navigation and workflow, and we reduced training and IT costs significantly.”

Manual processes that used to take two or three days to complete are now fully automated. “Now users can perform functions in a few seconds because the Exceed system automates the entire workflow from end to end. Exceed also enables us to use multiple tiers in terms of how we do our product rating, and we would not have been able to do that with the old system.”

One key advantage in working with CSC, according to Clancy, is the ability to collaborate on enhancements in conjunction with other leading P&C companies using the same software. “I like the idea of being able to take advantage of the thought processes of the GEICOs and the Progressives and that we would get the benefits of some of their critical thinking and what they’re putting into their application systems,” Clancy adds.

Preparing for the Next Big Bang

Looking ahead, the company is currently working to convert its auto portfolio onto Exceed to complete its consolidation. Clancy says he’s planning another big bang for that line of business and feels confident that the company has a good foundation to support the project.

“We’ve really created a partnership between our business owners and IT that allows more buy-in and commitment of resources from the business side,” he says. “By working together, the company as a whole has moved forward from both a technological and business standpoint. It takes a lot of corporate discipline to stay with the long-term project like this. It was the biggest thing that we had to manage as a company. We were able to do that, and now we’re reaping the benefits.”