Modernization of NTUC Income (Page 105)

2-13 What were the problems faced by Income in this case? How were the problems resolved by the new digital system?

    Income had problems with how they process their insurance because it is very tedious and paper-based. The way they do business costs them time, because it takes them more days to finish a certain request for insurance; money, because they need to upgrade HP3000 mainframe that frequently breaks; space, because it is paper-based, all forms were put into cartons and resulted to occupying 3 warehouses. Income’s problems were resolved in June 2003 when they switched to Java based eBao LifeSystem from eBao Technology. Because of eBao’s hi-tech features, it covered Policy Administration, Sales Management, and Supplementary Resources. Tedious and paper-based insurance processes which causes delay and time consuming Frequent systems breakdown and insufficient functional back-up systems.

1. Slow transaction processing for policy underwriting where information is not available to agents and advisers in real time.2. Lack of advisers telecommuting as each department did not have up-to-date information and facing difficulty to pass to each other.3. Company existing system had been upgraded into a more sophisticated one known as (Java based eBao LifeSystem)4. It consists of customer-centric design, seamless integration with imaging and barcode technology.5. New system operates on high availability platform where:6. All applications resided on 2 or more servers, each connected by 2 or more communication lines- (load balanced).7. Replace entire IT infrastructure with more robust & scalable architecture.8. Introduction of real-time hot backup disaster recovery center9. It consists of customer-centric design, seamless integration with imaging and barcode technology.10. New system operates on high availability platform where:11. All applications resided on 2 or more servers, each connected by 2 or more communication lines- (load balanced).12. Replace entire IT infrastructure with more robust & scalable architecture.13. Introduction of real-time hot backup disaster recovery center

2-14 What types of information systems and business processes were used by Income before migrating to the fully digital system?

    Before migrating to the fully digital system, Income was using the HP3000 mainframe that hosted the core insurance applications, for instances their accounting and management information systems. However, this mainframe is unreliable due to frequent breakdowns and it resulted downtime and decreased productivity. They were also using the COBOL program that was developed in the early 1980s but it was very slow in developing new products for the company resulting lost sale opportunities. Income does all the work manually and paper intensive, from the agent submitting the forms to branches manually or by courier, the office services will then sort them for underwriting; proposals were allocated to staff randomly; the storage is being done by sorting all the documents and gather it in cartons and stored in the 3 warehouses and since there is no proper document management system, retrieval of documents take days to complete. As well, policy writing is in batch process and information was not available to the insurance agents where they need the real-time information and this caused them to lose the opportunity to cross-sell.

2-15 Describe the Information systems and IT infrastructure at Income after migrating to the fully digital system?

    The CIO of Income, James Kang stated that, using the Java based eBao LifeSystem from eBao Technology is very customer-centric. The software comprises of 3 subsystems, which are policy administration, sales management and supplementary resources. The new system was operated with high quality platform and with multiple servers and communication lines. All applications resided on 2 or more servers where each connected by 2 or more communications line which were load-balanced. The entire IT infratrusture is replaced with more robust and scalable architecture.

    It contains a product definition module that supports new products, new channel and changes in business process. According to the CEO Tan Kin Lian, the new system has the best straight through processing workflow and it is very flexible, it cuts the new product launch time from months to days. And it helps them to save a lot of time and cost. As well, the new system save the company and provided them with the company’s disaster recovery plan. A real-time hot back-up disaster recovery center was implemented and it was super useful for the company. The new system helped the company to bring their business processes from paper-based to paperless through digital storage and records. Many users can access to the system at one time and anytime anywhere. The insurance agents can access to the information real-time and help them to gain their cross-sell opportunity.

2-16 What benefits did Income reap from new system?

1. Providing easier & more convenient access for staff: for those staff members who telecommute, it enabled them to gain faster access to information, as fast as those staff that accessed information within the office.

2. Enabled cross-selling of products & improvement of customer service: this new system has allowed income to gain a singular view of each of their customers across their products and channels, enabling an even better life and general insurance line.

3. 50% savings on both time & cost needed to processpolicies: due to the straight through process workflow capabilities of the new system, it enabled reduction of 50% on time and cost needed to process policies. Time needed to design and launch new products was also reduced significantly.

4. Provides greater support to intermediaries: Income is able to provide support to agents, brokers, and customers to do online services regularly. 

2-17 How well is Income prepared for the future? Are the problems described in the case likely to be repeated?

1.By comparing the past and the present state.

2.Straight through processing workflow and high flexibility.

3.Time saving. For instance, cutting product launch time from months to days.

4.Support agents, brokers, and customers to do online service conveniently.

5.Lower cost.

6.Shorter implementation time.

Are the problems described in the case likely to be repeated?

Performance (Unlikely)Ranked as the top 3 insurers in the life insurance industry (MAS Annual Statistics, 2008)Product innovation to meet customers’ needs (through new IT technology)Cutting Edge IT Development. For example, STEP technology eliminates the use of paper which promotes environmentally friendly as well.Partnership with Development Authority and Microsoft to launch the community web portal, Big Trumpet.