nedbank insurance In an industry first, Nedbank Insurance combines personal lines, commercial lines and life insurance products on a single TCS BaNCS instance. insurance By Susanta Das, Client Partner-Nedbank Insurance, TCS Financial Solutions

12 Having TCS BaNCS is a fantastic enabler for the business. Indranil Bandyopadhyay, Head of Business Information Technology Enablement, “ Nedbank Insurance ”

Nedbank Insurance offers personal lines, commercial lines and life insurance to Nedbank’s (Retail and Business) Banking clients. As a bancassurer, Nedbank Insurance focuses mainly on sales through a number of bank channels, but is run like any other insurance company in terms of onboarding, policy administration, client servicing, claims management and regulations. Until recently, Nedbank’s insurance businesses were run and capitalized separately: Nedgroup Insurance Company (NedIC) offered personal and commercial lines to bank clients; and Nedgroup Life (NGL) offered life insurance policies aligned with banking products.

Nedgroup Insurance Company NedIC was originally formed to embed non-life insurance into banking products so that, for example, a client who takes out a home loan through Nedbank can buy property insurance, or a client who takes out a car loan can add warranty options, tire and rim insurance, and other value-added products. Initially, NedIC was run using an inhouse policy administration and a third-party claims system. These disparate systems ran on separate platforms with only a basic level of connection, and therefore efficient operations was difficult and expansion almost impossible. “We needed an IT platform that would allow us to go beyond homeowners’ cover for home loans and to offer personal and commercial lines to our banking clients,” says Indranil Bandyopadhyay, Head of Business Information Technology Enablement at Nedbank Insurance. Through a request for proposal NedIC narrowed down the field to three technology vendors. “We wanted to achieve our transformation requirements and meet our cost targets,” says Bandyopadhyay. “We also considered whether these vendors had done large transformation programs and complex migrations before to prove that they can execute the project.” In 2010 NedIC chose TCS as its solution partner and, shortly thereafter, started to deploy TCS BaNCS as a single solution to deal with the policy administration, claims and servicing in respect of a full range of personal and commercial lines. By the end of 2013 NedIC had successfully migrated its clients onto TCS BaNCS, and expanded its offerings to include personal-accident and hospital plan products. As far as that initial scope was concerned, the project was a success. Due to legacy business arrangements, Nedbank is yet to take full advantage of the product range enabled by TCS BaNCS. “Because we initially didn’t have the systems, people or process to do it ourselves, we entered into arrangements with third-party partners for several non-life insurance products,” says Bandyopadhyay. “Once those contract terms end, we’ll be able to launch even more products ourselves.” “Previously, technology was a constraint, but now we can offer any product we want across the full spectrum of non-life insurance offerings – from sales, fulfillment and endorsement to claims – with no restrictions from a technology perspective,” adds Bandyopadhyay. “Having TCS BaNCS is a fantastic enabler for the business.”

13 Nedgroup Life Assurance Company NGL started out by offering life insurance products intended to cover the bank’s loan exposure. For example, it might be a requirement of a home loan agreement that the borrower must cede a life insurance policy. “The bank might not lend money to someone without having a guarantee that it will be able to recover its capital asset in the event of death or disability,” says Steven Goodrich, Head of Technology at Nedbank Wealth. Other life insurance products were added to the offering as client needs were aligned with retail banking opportunities. For example, a Nedbank current or savings account may have an embedded funeral policy from NGL, allowing a beneficiary to receive certain benefits when an account holder dies. The life insurance business started in the 1970s with an inhouse policy administration system managed by an inhouse development team. By 2010 only a few people knew how to keep the

insurance legacy Unisys platform system up and running. “Research suggested that there were about 20 active developers in South Africa who knew how to program on this platform, and many of them were at our life insurance company,” says Goodrich. “We were faced with the risk of running out of developers, and it was taking us too long to move forward and meet the business demand.” That’s when Nedbank Insurance made a bold decision. “In 2014 we decided to merge our personal, commercial and life insurance businesses under one brand, namely Nedbank Insurance,” says Goodrich. The idea was to create a single business and it made sense to consider a single system to run both sides of the business. “The ideal scenario was to have one policy administration system for the entire (insurance) organization,” says Goodrich. The only problem with having a policy administration system covering life and non-life insurance was that it had never been done before. “Analysts said it was a good idea, and that many people were looking into it,” says Bandyopadhyay. “Maybe because of the risk involved, or the fear of the unknown, nobody had successfully moved forward on any significant scale.” Someone has to be first, and Nedbank Insurance made the move. “We understood the complexity and the risks, but we were confident that it was the right way to do things – allowing our technology solutions to enable a client-centered business model,” says Bandyopadhyay. The drawbacks of having different systems for separate insurance products were well understood throughout Nedbank Insurance. “Because of the various business models and third parties involved, it was difficult to have a single view of the client,” says Bandyopadhyay. “That caused problems from both a revenue opportunity and servicing perspective.” For bankers, it was increasingly difficult to meet know-your-client (KYC) regulations, which were intensifying in scope. Also, it was a challenge to maintain data accuracy across systems, even for something as basic as updating personal details. “When we updated records on one system, we had to remember to update several other systems,” says Bandyopadhyay. “We wanted standardized processes across life and non-life processes.” To move forward, Nedbank Insurance decided to deploy TCS BaNCS for the life insurance business in 2014. “Our relationship with TCS from the earlier successful non-life-insurance project contributed to us deciding to expand TCS BaNCS for the life insurance benefits as well,” says Goodrich. “This time, we didn’t even require a request for proposal or information – TCS was the perfect partner to continue our business transformation journey.” Rather than trying to migrate the Nedgroup Life policies onto the existing TCS BaNCS deployment for Nedbank Insurance, it made more sense to start by running two TCS BaNCS instances in parallel. The implementation of the second instance of TCS BaNCS for the life business and the initial migration was completed in 2016. “Nedbank has now adopted TCS BaNCS as the enterprise standard for insurance throughout the group,” says Goodrich.

14 Everyone sees it as a massive technology change, but it’s actually a business transformation enabled by technology. “ Steven Goodrich, Head of Technology at Nedbank Wealth ”

Breaking new ground Once both sides of the business were running on TCS BaNCS, the next step was to work through the implications of a business model combining life and non-life insurance within a single policy administration system. “We spent quite some time with TCS working through the details of how a single solution could work,” says Goodrich. The overall concept is to improve client experience using blended insurance and banking requirements. “It’s not unusual for an insurance company to offer life, personal and commercial policies to clients,” says Goodrich. “What is unique is being able to combine benefits from both types of insurance into a single policy. Once we’ve merged our policy administration systems, we’ll shift our thinking and focus to achieve this!” For example, if a client is involved in a car accident, there could be several insurance products at play – auto insurance covering damage to the vehicle; personal-accident insurance covering liability; life insurance covering death or disability; and perhaps a hospital cash benefit after that. “From a client experience, you shouldn’t have to deal with all these policies separately, especially while you’re suffering from a traumatic event,” says Goodrich. “With life and non-life benefits combined under one policy, we will be able to create a seamless client experience.” It turned out that the technology was the easy part. “Perhaps it’s because we have TCS as a partner, but we’re finding that the technology side is less complicated than getting the business ready to manage a single insurance policy,” says Goodrich. In the business, employees have to take on new roles to support products for which they may not have experience. Two separate teams have to come together as a single cohesive client service unit. Product leads have to think about both sides of the business for the first time. “Everyone sees it as a massive technology change, but it’s actually a business transformation enabled by technology,” says Goodrich. “The business change is far greater than the technology change.”

15 insurance

Johannesburg, South Africa

A true partnership With these considerations in mind, TCS and Nedbank worked together to make the concept a reality. In April 2017 Nedbank merged its two separate TCS BaNCS instances onto a single instance. “This is the first time in the world that we know of where a life and non-life business will run on one instance within a single system,” says Bandyopadhyay. “It was a journey worth going on, and a risk worth taking, with a huge potential upside.” “We knew what we wanted to get out of it, and we had confidence in our partnership with TCS,” adds Bandyopadhyay. The flexibility of TCS BaNCS made it possible to move forward on the vision of a single solution covering both sides of the insurance business. “Most other insurance companies are attached to technology partners that offer only one side of the insurance coin,” says Goodrich. “We were very fortunate to have had a partner that enabled us to move from separate personal, commercial and life offerings to a full-service insurance offering.” More importantly, the relationship between Nedbank and TCS established the foundation for taking the leap into the unknown. “TCS really understood what we were trying to do, and put together the technology to support our vision,” adds Goodrich. “I don’t think we would have achieved that with anyone else.” “What makes this a successful partnership is the relationship between people, not only between istoc k photo companies. We have mutual trust and respect, and that helps people to go beyond the call of duty to make our efforts successful,” says Bandyopadhyay. Part of being a trusted partner is feeling free to speak up, and Nedbank executives encouraged the

16 AT A GLANCE Company Nedbank Insurance

Head Office Johannesburg, South Africa

Business Challenge To gain a single client view with efficient operations across life and non-life insurance offerings.

Solution Insurance solution of TCS BaNCS.

FAST FACTS Nedbank’s history goes back to the early 19th century with the establishment of the Cape of Good Hope Bank in 1831.

Following successive branding and structural changes, from Nederlandsche Bank voor Zuid-Africa to Netherlands Bank of South Africa (NBSA) and to Nedcor Group in the 1980s, Nedbank Group was formed in 2003.

Nedbank Group is now one of the top banks in South Africa.

TCS team to voice their opinions as equals. “Instead of just doing what we ask them to do, they would challenge us,” says Goodrich. “If they didn’t think the solution on the table was the best one, they would help craft a solution rather than just accept our views of how it should work. And we’ve seen the benefit of that – time and time again.”

Original opportunities For Nedbank, the early benefits of the combined insurance solution will be realized through operational efficiencies based on a single view of the client. Among these benefits are the following: l Frontline branch bankers can more easily cross-sell and upsell across a range of products. l Risk managers can more easily build combined financial models. l Digital and mobile channels can be rolled out quickly, without having to integrate with multiple systems across the organization. Also, Nedbank will – in time – offer a greater range of traditional life, standalone personal and commercial insurance products to its banking clients with the impending runoff of its third-party partnership agreements. More benefits will come about with the expansion of the product line to include insurance benefits istoc k photo that track client lifecycle events. “Now that we no longer have IT constraints, our creative opportunities are flowing,” says Bandyopadhyay. “New opportunities and new possibilities have opened up, and we are now able to become truly client-centered.” n

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