Client: Chase Insurance Challenge: Provide support for acquired block of life insurance policies while upgrading technology Solution: Support policies with CSC’s applications management services and introduce Automated Work Distributor, CSC’s CyberLife and CSC’s New Business Accelerator into processing operations Results: Supported the sale of policies to a leading U.S. life insurer, reduced size of full-time support team 48% and gained skilled South African resources at 14% savings Want More Information? Click here to learn more about CSC’s Outsourcing services or contact us. Click below to download the full case study (PDF). Download the file

A block of 1 million term and universal life policies was sold by Kemper Life to Zurich Life in 1994 and then sold to Bank One in 2003. A year later, Bank One merged with JP Morgan Chase & Co., creating the second-largest U.S. financial services company. Over the next two years, Chase Insurance built up its insurance business — becoming the fourteenth-largest provider of term life and the ninth-largest writer of fixed annuities.

CSC has been supporting the block of life insurance policies since 1974 when it was part of Kemper Life. “This business has gone through a tremendous amount of change,” said Karen Chamberlain, chief technology officer and senior vice president of Chase Insurance. “Through it all, CSC’s team has been the one constant. CSC has people on site who have been supporting this business longer than any of our employees, so they definitely know our business.”

Evolving Support for Systems
As a result of merger and acquisition activity, very little was done to upgrade the core policy administration systems supporting the business. And like the business, CSC’s outsourcing agreement has evolved over time. Zurich scaled it back in the 1990s from a full IT outsourcing engagement to applications management. By the time Bank One bought the business, Zurich was relying on an applications management team supervised by CSC with 25 percent of the resources provided by CSC and 75 percent provided by an offshore company based in India.

After the Bank One acquisition, the company approached CSC about consolidating the business onto a single platform, CSC’s CyberLife administration system. CyberLife had been upgraded to a Web-based version with a service-oriented architecture (SOA) designed to manage growth and lower IT maintenance costs. Bank One’s decision to upgrade to CyberLife helped support the Bank One-JPMorgan Chase merger.

“Chase is extremely particular about our technology standards, and due to the age of the systems, Chase was looking at an investment of $15 million in order to move them into the Chase environment,” Chamberlain said. “We needed new technology to grow our business, so the CyberLife implementation was key.”

The technology upgrade for the systems includes Automated Work Distributor (AWD), which introduced customer service representatives to digital imaging and work management in 2005, and CSC’s New Business Accelerator, which is designed to automate processes related to requirements gathering and underwriting.

Lowering Costs with Onshore/Offshore Resources
The decision to move to newer technology prompted Chase in 2005 to reassess the offshore component of its outsourcing relationship with CSC. The Indian IT vendor was replaced with a smaller offshore team from CSC based in South Africa.

Utilizing the South African team allowed the company to trim 14 percent off the hourly service rate, compared to their U.S.-based counterparts. And by adding highly skilled resources, CSC was able to reduce the total number of full-time employees supporting the business by 48 percent.

“Since we are upgrading our life platform to newer technology, the same mix of older legacy skill sets was not going to work for the future,” Chamberlain said. “Offshoring is a component of our overall outsourcing strategy because of the cost savings. Unlike the last vendor, CSC’s team in South Africa has the skill sets we need. They are very proficient in conversions to CyberLife and support for the new platform.”

Sharing ‘Collective Success’
Not long after Chase Insurance extended its outsourcing relationship with CSC, the parent company, JPMorgan Chase, agreed in early 2006 to sell the block again to a leading U.S. life insurer. The sale represents the fourth acquisition in the insurance block’s history and the third in three years.

During the previous three acquisitions, CSC worked behind the scenes to generate reports to support due diligence activities. “There are a lot of other issues that need your attention during a merger or acquisition, and the last thing you want to worry about is technology,” Chamberlain said. “CSC has really made these systems a non-issue for us, which is a good thing.”

“I’ve had a long working relationship with CSC, and CSC has had a long relationship with this business,” she added. “The good thing about that is that you develop a trusted partnership over time. At the end, we share collective success.”