Insurance legacy systems are often seen as one of the biggest barriers to speeding up innovation and digitalization. And the COVID-19 pandemic has made even clearer how important it is to be able to respond quickly to changing conditions, and a less physical world.
So how can insurers make the most of their legacy systems and avoid creating new ones in the process?
We sat down with Frans Stuifbergen, Senior Business Analyst at Aegon and Gijsbert Cox, Insurance Industry Leader at Appian, to share their hands-on-experiences.
What were some of the challenges Aegon was facing, in dealing with its legacy systems?
Frans:
Aegon Netherlands is evolving, working together with more external partners, to improve and increase value for our customers. We're becoming more connected and it is our responsibility as IT, to enable this connectivity, while at the same time realizing fast delivery, agility, fair costs, adherence to architecture and regulatory obligations.
Across the business we needed to reduce legacy in various contract administrations. In Pensions for example, we have migrated a mainframe for contract administration to an external pension administrator. During the migration we needed to maintain the service levels for our intermediaries, while ensuring full access to the data. This is where Appian came in: we used Appian as a broker portal, ensuring a quick and smooth migration process.
Gijsbert:
We're seeing this across the insurance industry. Replacing legacy with a new system can take several years of your IT capacity. With the speed of change we're seeing there is just no time for a multi-year development process. That's why many insurers are completely re-thinking their approach: instead of replacing old with new, they're choosing to re-use and leverage their legacy systems, combining them with new technology and selecting the best-of-breed.
Keeping the business running while migrating is a challenge. How do you decide the best approach?
Frans:
Working agile and with solutions that support us in this approach is central at Aegon. In 2017 we did a successful full redesign of our Term Life product with Appian, that yielded great results, so we decided to do more.
The POC we developed with Appian in Pensions to migrate to an external pension administrator not only enabled us to support all the pension contract lifecycle processes on top of two different administrations, but accelerated our way of working.
The POC turned into a complete project with Appian, giving us more experience in the low-code automation capabilities of the platform, creating an engagement layer across different systems and data. We ended up choosing Appian as the central BPM/Case Management solution for the entire Aegon organization.
Can you explain more about this approach and how you leveraged the automation platform?
Frans:
We identified various situations where a platform like Appian was very useful, beyond where it was positioned as part of our enterprise architecture. For example, we used Appian as a process engine for monitoring and validating the steps of a migration process in our Banking division.
After the migration to the new IT solution we had to work with standard functionalities and make our own adaptations, using robot integration for temporary support and keeping legacy untouched in places. This is also where Appian's platform came in as a valuable support.
Appian is like a lego-box: it's easy to build for a specific department and re-use components for other areas. For the Mortgages department we developed a self-service solution for mortgage redemption, enabling customers to make an additional mortgage payment through Ideal, an online payment service. This process was implemented in such a way, that we're now able to use parts of it in other business processes, like payment arrears.
So, Appian enables you to increase your agility and flexibility. How does this for example reflect in shorter time frames and more effective ways to introduce new solutions?
Gijsbert:
This is where the ability to change and re-use comes in. With Appian, your solutions remain low-code, so that you can easily adapt and reuse components. The central engagement layer also enables Aegon to include innovative solutions like AI for fraud detection, external insurance services or robotic innovation.
Frans:
We set up a Center of Excellence (COE) within Aegon to help with the adoption of Appian in other value streams, to train employees to work with the platform, and to guard platform best-practices.
Moreover, the Appian AppMarket contains plug-ins that you can use as standard components as you build. They serve as accelerators for using the platform efficiently and effectively.
Can you share more about the key results or benefits achieved through this approach?
Frans:
Digital client interaction was our first goal using Appian, but we now see other benefits as well. We've started using Appian for digital self-service, resulting in tremendous growth of our Straight Through Processing (STP)ratios and improvement of our Net Promoter Score (NPS).
We've also managed to shorten our development and implementation times. And updates now take a couple of hours or days at most as they are sent via the Appian Cloud.
These are substantial internal benefits. What about your external stakeholders, like customers and brokers?
Frans:
Instead of toggling between systems, our people can now spend more time with their customers, leading to an improved customer experience. Also, in rethinking the process, some elements were "shifted" to customers to do themselves ñ for example enabling customers to easily make additional mortgage payments, instead of having their money sit in a savings account. This led to a 36% increase in NPS. We're seeing similar results in other parts of the business as well.
Gijsbert:
Other insurers report similar benefits. Employees, who were swivel-chairing between multiple systems, can now, thanks to the single engagement layer, really focus on the customer and provide better customer service. Insurers are able to increase the speed to settle claims, reduce the complexity in underwriting and improve collaboration with their brokers and partners.
For insurers dealing with legacy systems holding back their speed of innovation, what are some of the learnings you can share?
Frans:
The most important thing is to start small, show early successes ñ and build on those. Make sure you take your organization with you through the process. It's not just about the systems, you also have to change the mindset and teach business users along the way, keeping them engaged, as they see progress in rapid iterations. I would also recommend establishing a Center of Excellence, starting with the help of a vendor or partner to leverage lessons learnt on a continuous basis.
Gijsbert:
We always advise our customers to not try to "boil the ocean." Start small, learn and expand. Appian makes this possible because it is a truly flexible and agile platform. The rich UI elements within the low-code also enable teams to work closely together with the business. Solutions come to life in minutes, and you can have daily stand-ups to align with business and IT to specify requirements.
One final question: how do you avoid creating new legacy and ensure that what you're building will be future-proof?
Frans:
Tough question. With the fast pace at which the world is moving, I think it's impossible not to create legacy. That's why you must be agile enough to constantly adapt. My advice would be to manage the lifecycle of solutions you create properly and validate them regularly.
Gijsbert:
Once you've created something, it might be already outdated. The question is how fast are you able to change it? If it remains low-code, then it is a lot easier, and if the integrations can be changed quickly you can change your architectural set-up faster. This will enable you to respond much faster to changes in your operations, processes, or regulations and enable a much faster time to market.
You can watch the full replay of the interview here.
As originally appeared on the DIA Community website.
