Enterprise Reference Planning System for Insurance Sector

The Indian Insurance industry is a flourishing one which includes several national and international players who be competitive for superiority. With several reforms and coverage laws, the Indian insurance sector has observed tremendous growth in the recent past.

India having around 17% of the world's populace is a basically untapped market. Nearly 80% of the Indian society being without a life, health and non - life insurance coverage, a growing number of insurance companies are now appearing in the Indian insurance sector. With all the checking of the economy, several international market leaders in the insurance sector are trying to venture into the India insurance industry.

The progress in the insurance industry directly impacts the reinsurance industry. Reinsurance providers are in essence companies that provide insurance cover to insurance firms to be able to cover their risk. With the growth in the quantity of insurance products sold by the insurance firms their risk part goes on increasing. So as to cover this risk, companies resort to reinsurance. Thus the reinsurance market is all growing at an instant pace.

The expansion of the Reinsurance industry in India is in conjunction with a number of challenges. Issues faced by the reinsurance industry include shrinking margins, increasing competition etc. In order to meet the difficulties, reinsurance companies across the globe have started leveraging heavily on their information and communication systems.

Reinsurance firms are using enterprise management answers to increase productivity, save on expenses, to acquire higher customer satisfaction, thereby producing into customer retention and also to improve sales performance.

General Insurance Organization of India (GIC Re) is the only real reinsurance company in the domestic reinsurance market in India with an increase of than three ages of experience in the Re-Insurance business. GIC is headquartered in Mumbai.

In India, GIC provide reinsurance to the direct insurance company as it's the sole reinsurer in the market of domestic reinsurance. It is one of the leaders in the facultative placements and home companies' treaty programmes.

OBJECTIVES FOR Venture Reference PLANNING SYSTEM

The key goals for initiating ERP execution were as follows
  • So concerning retain management position in the national (Indian) reinsurance market.
  • The intention of growing as the first choice of reinsurance in the Afro - Asian markets.
  • To obtain a built-in view of all business transactions.

MAJOR BUSINESS Difficulties FACED BY GIC RE

Customer-Centricity

  • The change in emphasis of the organization to being customer-centricity created a number of issues for the business.
  • It became important to acquire optimal understanding of all the customer segments.
  • Customized products and services were necessary to designed to meet the needs of every of the determined customer sections.
  • It became important to look at cross advertising of products and services as an important expansion strategy.
  • It also became important to provide any time and any place reachability to the customers.

Competition

  • The growing quantity of players in the market created a world of intense competition
  • In order to sustain such competitors it became important for the company to look at new strategies and identify means of acquiring a competitive advantage over its competition.

Globalization

  • Expansion of company businesses across multiple physical locations also managed to get essential for GIC Re to recognize means of effective monitoring and control.
  • Expansion also increased the level of competition by adding new opponents from the new geographical locations.

Product Commoditization

  • The upsurge in competition was impacting the company's profit margins.
  • It became essential for the company to tell apart its brand from competition.
  • Lower customer loyalty and increasing price sensitivity were also evaluate risks to GIC Re.

Consolidation

  • It was important to bring about a consolidation across the organization to be able to deliver a clear value to its customers.

Compliance

  • Expansion of businesses across multiple geographical locations made its vital to adhere to multi-national regulations.

MAJOR IT Problems FACED BY GIC RE

Data Quality

  • Data maintained by the organization was fragmented by the line of business, the branches, the different physical locations etc.
  • It was important to consolidate this data and offer high quality of product and procedures related data.

Process Integration

  • It was important to standardize and streamline cross functional processes and develop and integrated workflow.
  • The company was experiencing value leakage anticipated to non integration of systems.

Legacy IT Systems

  • The legacy system utilized by the company didn't indicate the change in concentration from being a deal centric to customer centric insurance provider.

Reduction of Procedure Complexity

  • The company used a number of applications to control the day to day activities.
  • As a result, a number of interfaces had to be monitored and maintained which proved to be very difficult.
  • It thus became important to reduce the amount of interfaces and create standardization over the interfaces.

EXPECTATIONS FROM ERP

Reduction in overall cost through improved efficiency and increased productivity

Drive business innovation

To a provide a competitive advantage to the company over its competitors

Driver for business growth

Improve overall customer experience and satisfaction

Ensure regulatory compliance

Support global operations

Create new revenue streams for the company

Ensure growth of existing earnings streams

CHOICE OF SAP

The major factors adding to the choice of SAP are the following

Integrated Enterprise platform for transacting GIC's business

  • The company required a program that would incorporate all the functions and procedures over the enterprise.
  • The system was necessary to standardize all functions and streamline group of processes across the organization alternatively than streamlining large number of procedures.
  • The company expected the provide an enterprise wide awareness of business procedures.

SAP Reinsurance solution being employed by Global Industry market leaders - Munich Re and Hannover Re

One of the major contributing factors to choosing SAP was the company's biggest competition and the global industry innovator Munich Re and Hannover Re got implement SAP Reinsurance system.

Adoption of the global best practices

By 2005, SAP Insurance had virtually all insurance service providers operating it.

SAP had in the past implemented both insurance and reinsurance deals for multiple clients.

This enabled SAP to get an understanding of the global best practices in the common in the industry.

GIC Re hoped to reap the benefits of this knowledge in their own implement of SAP Reinsurance.

Most companies who had previously implemented ERP acquired strong positive experience with SAP for their insurance portfolio

ERP IMPLEMENTATION START DATE Early 2005

ERP GO LIVE DATE February 2006

SAP VERSION SAP R/3 Version 4. 7

GEOGRAPHICAL SCOPE Offices in India, London and Dubai

SAP MODULES IMPLEMENTED

SAP FS-RI - Reinsurance

SAP FS-RI is an insurance solution that enables reinsurance firms, direct insurers and agents to attain a reinsurance process that is completely included and streamlined.

SAP FS-CD - Collections / Disbursements

SAP FS-CD is a remedy designed for insurance providers to standardize and streamline their billing and disbursement activities because of their policyholders and agency holders.

SAP IM-IC (CFM) - Investment Management

SAP IM-IC (CFM) module provides useful tools for confirming of WBS which can be happening, PO commitments and possessions which have been capitalized.

SAP FI-CO - Finance

The SAP FI-CO module may very well be the central of the involved SAP system as it handles the monetary effects on business and other modules of SAP.

SAP HR - Individuals Resources

SAP HR is the largest module implemented

It handles the management of recruiting and human being capital

SAP BIW - Business Intelligence

SAP BIW is the business intelligence module that provides analytical, reporting and data warehousing solution

IMPLEMENTATION CHALLENGES

First SAP Reinsurance (FS-RI) implementation outside Europe.

First SAP FS-CD Implementation in India.

First SAP IM-IC execution in India in an Insurance/Reinsurance environment.

One of the few Lively Reinsurers on earth using SAP FS-RI

Legacy data Migration

Customisation of Reinsurance Module (FS-RI)

Risk Administrator in FS-RI (Facultative Business) hadn't yet been executed even in Europe

IMPLEMENTATION HIGHLIGHTS

  • Opportunity to critically re-look the company's business techniques and techniques and integrate changes wherever required.
  • Elimination of data inconsistency by correcting, validating and purifying legacy data.
  • Opportunity to streamline the organisation by adopting the global best practices in the industry

BUSINESS BENEFITS

  • Tight integration between underwriting and technological Accounting processes therefore providing better business focus.
  • Integrated processes removing virtually all redundancies and inter-departmental reconciliations.
  • Increased automation reduced manual intervention and increased data quality.
  • Improved reserving process (tracking the development of outstanding damage reserves).

FINANCIAL & STRATEGIC BENEFITS

  • SAP allowed visibility of most assets
  • Standardized evaluation of most assets were achieved
  • Daily updates to the investment stock portfolio enable the company to achieve integrated investment management
  • Effective real-time risk analysis

TOTAL COST OF OWNERSHIP

95 % of the company's requirements were found by th standard solution provided by SAP and little customization was required

OPERATIONAL BENEFITS

The operation benefits as assessed by the business after two years of implementation are as follows

KEY PERFORMANCE Indications (KPI)

IMPACT

Time to measure performance

-70%

Time to arrange for new projects and activities

-30%

Time to performance market risk analysis

-80%

Efforts to map sources of risk

-80%

Reporting Flexibility

+90%

Quality of Reports

+80%

Quality of Portfolio evaluation

+90%

Quality of purchase mapping

+90%

FUTURE PLANS

Up gradation from SAP R/3 Version 4. 7 to SAP ECC 6. 0 platform

Connecting offices in Moscow, Malaysia and South Africa to the upgraded ERP network

General Insurance Organization of India has derived significant benefits from implementation of SAP Reinsurance. Out of this case it is evident that SAP gets the potential of being a measure source of increased efficiency and competitive advantages for insurance providers.

APPENDIX

[1] Screen Performance: Executive Dashboard

[2] CEO Dashboard

[3] Sales Dashboard

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