Instant Insurance
Interview with Sorin DRAGOMIR,
Executive Director - IT Division, GENERALI Asigurari
PRIMM: Mr. Dragomir, at the end of 2006, you launched together with ING Bank a bancassurance operation which stood out mostly for the technical solution it proposed. Why did you want to start this partnership in the first place?
Sorin DRAGOMIR: We have always looked for this sort of partnerships. The reasons we did it have to do with our work efficiency. Recently, the press has commented on the increase of the GENERALI turnover, whose dynamics were four times better than the market average. If we hadn’t come up with this kind of solutions, it would have been impossible to achieve such an increase with the same staff, of 300 nationwide employees. We preferred technological development to human resource upsizing. Consequently, we have managed to make each employee more efficient, which is actually our group policy.
The partnership with ING was excellent, as they are determined to adopt this new way of working. We agreed on one thing from the very beginning, actually from the first talks: 100% paperless work. They didn’t want any procedures requiring paperwork, telephone calls, e-mailing, etc. Everything needed to be perfectly embedded so that the staff of ING offices could issue our insurance policies using the software they were already familiar with. Of course, things had to be slightly changed, but it was important to make sure that right after client identification the system would get you straight to clicking on the policy selection button. ING made this request to many insurance companies and we were the only ones to accept it. I don’t think the other insurers were unable to build up such a system, but they probably didn’t see it as good investment, and I have to say it was not a small one as far as financial input and time were concerned.
PRIMM: Is this an original in-house solution?
S.D.: It is an original solution all the way. Let me explain why. First of all, the ING and GENERALI groups partnered only in Romania and nowhere else in the world. Second of all, it is an original solution because it is the first time that this underwriting software has been implemented as such - integrated into the basic software of a financial company. Everywhere in the world, the system is being implemented directly online and all the data, including client-related, have to be newly entered. We came up with the solution to embed it in the core banking software, which enables ongoing information sharing between the two systems. For example, the client-related data are transferred from the ING system exclusively, in other words, they are not entered in this new software, but taken from ING’s core banking system.
PRIMM: Practically, there is a direct query between the systems while the customers can see only the operations they run that very moment?
S.D.: Not exactly, because, at least for now, the operations are done by the office manager. These products are available only in the back offices where customer officers provide help for more sophisticated products. They are not available at the ING MultiMat terminals yet. To issue a policy, some documents still need to be handed out and some signatures need to be passed; it is not a fully automated operation because someone has to explain things to the customer. Many customers ask for clarifications: “Why a Generali policy, but why this type of policy, what risks does it cover, what number could I call ....”, things that you can’t just explain using a machine.
Actually, we can talk a lot about the matter. In Romania, online selling has always been perceived as something that the individual has access to by getting on the Internet. It doesn’t necessarily have to be like this. Our solution is also 100% online but, from its point of view, the customer is the office manager, in other words a qualified user. You can sell very simple products to regular users, but once they have to make some choices, you have to be able to give them some additional information. This is not something that you can do online, mainly because you have to put the customer’s needs first. If you try to display all these issues on a screen, online, you will simply get them all confused. There is either too much or too little information that you can give to customers and everything gets very complicated.
Highly standardised insurance policies can be sold online because they are to the point and easy to grasp: international travel medical insurance policies or motor third party liability insurance policies, to name just two of them. All customers have to do is choose the insurance rate. But, when we start to talk about more complex policies, things take a different turn. Think only of exemptions, the most complicated issue of all. We had long talks about it with our partner banks, which asked for simple, clear, standard products so that their customers don’t need clearing up. The office manager is not an insuring agent and he/she doesn’t want to become one.
PRIMM: So, you’re saying that the system is used in other banks, too?
S.D.: Yes, but not the way we have implemented it at ING, with our software integrated into their core banking system. The other banks preferred the second alternative, the simplest and the fastest one, with zero money investment: to use the GENERALI software as it is. A simple click on an Internet link, that’s all! It doesn’t matter how many locations and users we are talking about. The system is working well all times because it is physically located in Vienna, where people monitor it 24 hours a day to check its response time and, when it slows down, the system is automatically upgraded over night. There are currently 18,000 users in Europe, and the system runs in four countries where the group operates. However, with constant new implementations, the system has become, although not officially yet, but highly noticeable, the top bancassurance software.
PRIMM: As I have understood, the GENERALI agencies commonly use this system for policy underwriting?
S.D.: Yes, for a first line of products. Starting with June 18, all the products delivered in our agencies will be sold exclusively this way. Without any “buts” or exceptions! This is the end of printed modules and handwritten policies. All new insurance products are developed only electronically.
Since the software was implemented, staff effectiveness has improved substantially. Please believe me when I say that in our branch my colleagues waste just two minutes of their time to write the most common policies. Actually, all they have to do is fill in two boxes. The first one comprises technical data and it can immediately come up with an offer. The second one contains solely client identification data, as according to ISC standards. Fill out this second box and your policy is actually ready! After the employee has fully filled in both boxes and clicked on “save policy”, he/she can instantly print the policy. One doesn’t have to collect data from a policy, but all they have to do is issue one, while the system simultaneously uploads all the information. The data is processed that very night in the back-office system, but the second the policy is saved, it is available for any statistics. The back-office system generates new positions waiting for bank software information in order to automatically match issued policies to paid premiums.
PRIMM: Which of these two leads to more substantial savings: the front-office or the back-office?
S.D.: Two years ago I would have said the back-office. Indeed, the number of employees is considerably smaller. The back-office application allowing us to operate this way was already implemented a few months ago. But, as far as the front-office is concerned, very few changes have to be made in this respect because we have only one employee, namely an account manager, dealing with each bank. The account managers check the full reconciliation between bank amounts sent as paid premiums and issued premiums that we automatically receive as folders. They also check the renewal warnings and instalment payment notices before completion, which means that the automated equipment can make delicate decisions, which could however raise problems to bank customers - like automatic execution of direct debt. Only one person validates these transactions, which are hundreds each month.
PRIMM: Did you encounter any problems?
S.D.: The biggest problem is the fact that you have to get radical. All changes are made simultaneously, and not just any way, but day by day in the regular everyday business. You have to retrain everybody, which is usually done locally. The staff needs to start doing that on the same day, there is no place for pilot implementation as this way of working comprises both the front-office and the back-office. The entire way of working and the company vision change and you just can’t do it step by step. Of course, you can start a pilot, during testing periods, mostly to see how the selling is going. Still, once implemented, it has to be done for everyone at the same time.
The first impact is almost always negative and the change is not easily embraced. We started out with three products and, at the beginning, everything seemed extremely hard. When we announced that nineteen other products would follow, after three months, no one was nervous anymore.
PRIMM: It means that the software has to be automatically used by brokers as well.
S.D.: Certainly. They either use this application or they come to our agencies for policies to be issued. As far as we are concerned, we estimate to reach almost 150,000 contracts a year, for non-life insurance policies alone, but I think we will have maximum 100 - 200 handwritten contracts for complex policies per year.
PRIMM: This looks great on your company’s business card.
S.D.: It does, indeed. It helped us take a significant quality leap in the hierarchy of the group’s insurance companies, last year. If before 2006 we were ranked as one of the group’s small companies, last year we got straight to the big companies, leaving the medium ones behind. We got to top four thanks to one of the most efficient system implementations and to our solutions that the group management finds inspiring.
Find out about the steps of a successful implementation and the technical and HR consequences of a fully computerised system in our next issue.
Daniela GHETU
