AEGON Delivers Fast and Easy Product Development to Support Expansion
- Quickly expand into new markets in Central and Eastern Europe across multiple countries and currencies
- CSC's strategic administration system for Europe, GraphTalk A.I.A, used by more than 100 companies
- Shortened time to market to three months for new products
- Supported the growth of life insurance policies in new markets
- Increased efficiencies using a common technology platform and processes
New Business Opportunity
One of the world’s largest life insurance and pension companies, AEGON employs nearly 27,000 people worldwide. Headquartered in The Hague, AEGON's three major markets are the Netherlands, the United Kingdom, and the United States.
With a population of over 65 million, Central and Eastern Europe (CEE) offers AEGON significant new business opportunities for the 21st century. AEGON opened offices in Hungary in 1992, where it now holds a significant market share of life and non-life insurance business. A new green field business was started in Slovakia in autumn 2003, and in the Czech Republic in spring 2005. Recently AEGON entered the Polish market with the acquisition of Nationwide Poland. Critical to AEGON's business strategy is its belief that markets have different characteristics across the world. The CEE operation is managed locally, by AEGON Hungary's CEO, in order to focus on achieving maximum synergy and efficiency savings throughout the region.
Getting Products to Market Fast
One of the keys to success for AEGON is a common solution for administering its range of products across CEE. AEGON in Hungary used an in-house developed system for 10 years for its life and nonlife offerings. However, the company’s management believed the system was too complex and tailor-made for Hungary’s markets to meet the requirements of green field business start-ups in Slovakia and the Czech Republic.
“We were considering a new system in Hungary for life business anyway, because of our wish to separate life and non-life business, and to ensure good scalability to handle the expected growth in our business,” explains Gabor Gacsai, AEGON’s IT Manager for CEE. "So we decided we should find a solution for all three countries and for future start-ups."
AEGON had clear requirements for the solution, according to Gabor Gacsai. "Most important, we needed a system where new product development was fast and relatively easy to achieve in all operating companies – faster than we were achieving in Hungary with our existing system. Life insurance and pensions products are becoming highly competitive, so we have to make sure we can get our products to our customers fast," he says. "Secondly, it had to be a solution we could implement quickly and cost effectively on green field sites, to meet our aggressive startup deadlines and budgets. Thirdly, we had to achieve efficiencies as a result of using one common system. For example, we wanted to be able to replicate some product development between companies," he says. "Finally, we needed a solution that worked on our technology platform in Hungary."
Best-Practice Development Processes
AEGON had already successfully implemented GraphTalk A.I.A, as FUTUREfirst, elsewhere in its global operations. Deployment includes Asia and the United States, where the system manages three million policies. “It was a proven solution in AEGON,” says Gabor Gacsai. “At the same time, it represented state-of-the-art technology and best practice processes in product development, so we chose it as our CEE system.”
AEGON’s original plan was to implement GraphTalk A.I.A in Hungary, and use that experience with the Slovakia and Czech Republic projects. However, the business plan demanded that the start-up companies opened for business on timescales that made that option impossible. So AEGON adopted a more ambitious course of action: implementing the solution in all three countries almost in parallel.
“It was certainly a risky approach,” according to Gabor Gacsai. “The solution had to manage new life policies in Hungary without disruption. At the same time we were implementing a new system on two green field sites with no in-house experience of the system.” The business plan was not the only driver for on-time and on-budget completion of the projects. As the partners had signed a fixed price contract, any delay would also be costly. Implementation was completed on time and to budget – for release one in five months in Slovakia, in less than five months in the Czech Republic, where a copy of the Slovakia implementation was replicated, and within Hungary’s revised deadline.
GraphTalk A.I.A now manages AEGON’s universal life products in all three countries. A year after implementation, Hungary has some 40,000 policies in the system, Slovakia has 12,000, and the Czech Republic 5,000 policies. The solution’s fast development capability means that AEGON can now bring a new product to market - depending on complexity - in as little as three months, including gap analysis, implementation and user acceptance testing. Slovakia and Czech Republic have developed more than five products for their local markets, and Hungary offers 15.
“Product development is much easier and more flexible because of the way the system manages business processes and business rules,” says Gabor Gacsai. “Where new products are similar we can design each one using the same basic elements, and perform the required changes easily. Because we have the same system in all three country operations, we can also maximise the efficiencies cross-border.”
“This region of the world is very important to AEGON’s business plans,” says Dr. Gabor Kepecs, CEO of AEGON CEE. “Time to market is of crucial importance, so we were looking not only for an application with short implementation time and great flexibility in product development, but also for a long-term partner who can support us in achieving our goals. CSC has proved highly capable of delivering the common solution we need. We believe we will gain significant business efficiency from that operational synergy.”