Leading European Insurer Improves Product Innovation

A leading European insurer is transforming its market responsiveness, using CSC’s VP/MS product development software.

Home and motor personal lines products are being developed much faster, more flexibly and efficiently – significantly reducing time to market. Business teams control their own rating models, ensuring consistent profitability. Analysts perform ‘What if’ scenarios on millions of policies, improving the insurer’s market readiness.

The insurer also has better control of product development costs, because VP/MS is designed to maximize component reusability. And, unlike the insurer’s old system, VP/MS runs on multiple platforms, responding to users’ specialist needs. Both benefits are key to a company with leading brand subsidiary companies, and multiple channels to market.

Profit Risk

VP/MS tackles a long-term challenge to the company’s market agility. The solution replaces a 20 year-old system that required intensive IT support to cut code for rating changes every time development of a new product was needed.

This meant business teams working on new products had to book a development window with the IT department, and another time slot to test the new product on the mainframe. Product development time, speed to market, and competitive edge were inevitably affected.

The problem was getting worse as more sophisticated rating requirements were introduced, and development was needed for new market channels. New formulas were demanding much greater IT programming resource, creating further delays in the design and testing process.

Then the insurer wanted to move to a layered pricing system – introducing analysis of the wholesale cost and premium cost ‘layers’, to ensure that each developed product was profitable. It meant more new development steps, and further time pressure.

The Winning Solution

The function-rich VP/MS Workbench makes product development easy for a business team at its workplace. The business team can model product definitions, calculations and rules without IT support – significantly speeding up development before the final test on the mainframe.

VP/MS can also be used across multiple platforms. Business teams can test their product ideas ‘off host’ in their local environment. It means they can correct business errors that IT developers might not notice, so the quality of the finally launched product is high, and faster to market. This in turn reduces IT testing effort, as IT uses the same test cases generated by the business and focuses on producing the same results through the integrated environment.

Working from multiple platforms also makes it easier for analysts to perform ‘What if’ scenarios on large volumes of policies, using the specialist calculations on their UNIX server.

VP/MS Model Manager consolidates data for flexible product planning, enabling efficient and speedy reuse of products between different subsidiary companies and channels with easy extraction of the smallest detail of information.

The insurer was impressed by CSC’s global support capabilities for VP/MS, evidenced by a customer base of more than 140 companies.

Major Improvements

The same VP/MS model structure, generic interface, and data access layers are now used by all lines of business for home and motor products – 90% of total policies. CSC provided the initial skills and resources to begin modeling on VP/MS. This knowledge was then successfully transferred to the insurer’s business and technical staff.

Now, full product lifecycle functionality is available for all subsidiary brands, operating on all channels. One hundred percent of motor business is now processed through VP/MS, representing millions of quotes every day, and home business is heading that way.

For some products, development is five to 10 times faster than with the old system. Analysts are able to run prototype calculations on a million policies in about eight hours – a staggering advance in their productivity.

The insurer has also managed a new step in rating to take account of customer relationship history – aimed at improving rating quality. It would have taken a year to develop in the past. With VP/MS, development and modeling are achieved in one month.

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