Enterprise Resource Planning System for Insurance Sector

Enterprise Resource Planning System for Insurance SectorThe Indian Insurance industry is a flourishing one which has some(prenominal) national and international players who compete for excellence. With several reforms and policy regulations, the Indian policy sector has witnessed direful growing in the recent by.India having around 17% of the worlds population is a largely untapped market. Nearly 80% of the Indian population being without a life, health and non life insurance, a growing number of insurance companies atomic number 18 now emerging in the Indian insurance sector. With the opening up of the economy, several international leaders in the insurance sector atomic number 18 trying to venture into the India insurance industry.The harvesting in the insurance industry directly impacts the reinsurance industry. Reinsurance providers are basically companies that provide insurance cover to insurance companies so as to cover their risk. With the growth in the amount of insur ance products sold by the insurance companies their risk component goes on increasing. So as to cover this risk, companies resort to reinsurance. Thus the reinsurance market is all growing at a rapid pace.The growth of the Reinsurance industry in India is coupled with a number of challenges. Challenges faced by the reinsurance industry include shrinking margins, increasing competition etc. In order of magnitude to meet the challenges, reinsurance companies across the globe have begun leveraging heavily on their information and communication technologies.Reinsurance firms are using enterprise management replys to increase productiveness, spare on expenses, to buzz off higher client satisfaction, thereby resulting into customer retention and to improve sales performance.General Insurance stomach of India (GIC Re) is the fix reinsurance community in the domestic reinsurance market in India with more than three decades of experience in the Re-Insurance business. GIC is headquarter ed in Mumbai.In India, GIC provide reinsurance to the direct insurance participation as it is the sole reinsurer in the market of domestic reinsurance. It is one of the leaders in the facultative bureauments and domestic companies treaty programmes.OBJECTIVES FOR ENTERPRISE RESOURCE PLANNING SYSTEMThe key objectives for initiating ERP death penalty were as followsSo as to retain leadership position in the national (Indian) reinsurance market.The intention of emerging as the leader of reinsurance in the Afro Asian markets.To obtain an integrated view of all business transactions.MAJOR BUSINESS CHALLENGES face up BY GIC RECustomer-CentricityThe change in focus of the organization to being customer-centricity created a number of issues for the caller-up.It became Copernican to have optimal cognition of all the customer segments.Customized products and services were required to designed to meet the needs of each of the identified customer segments.It became valuable to adopt cro ss selling of products and services as an important growth strategy.It also became important to provide any time and any place reachability to the customers.CompetitionThe growing number of players in the market created an environment of intense competitionIn order to sustain such levels of competition it became imperative for the company to adopt in the altogether strategies and identify means of securing a competitive utility over its competitors.world(a)izationExpansion of company operations across multiple geographical locations also made it necessary for GIC Re to identify means of effective monitoring and control.Expansion also increased the level of competition by adding new competitors from the new geographical locations.Product CommoditizationThe increase in competition was impacting the companys profit margins.It became absolutely necessary for the company to distinguish its brand from competitors.Lower customer the true and increasing price sensitivity were also measu re threats to GIC Re.ConsolidationIt was important to bring about a consolidation across the organization so as to deliver a clear value to its customers.ComplianceExpansion of operations across multiple geographical locations made its imperative to comply with multi-national regulations.MAJOR IT CHALLENGES FACED BY GIC REData QualityData maintained by the organization was fragmented by the line of business, the branches, the different geographical locations etc.It was important to consolidate this data and provide high quality of product and operations related data.Process IntegrationIt was important to exampleize and streamline cross working(a) processes and develop and integrated workflow.The company was suffering from value leakage due to non integration of systems.Legacy IT SystemsThe bequest system used by the company did non reflect the change in focus from being a contract centric to customer centric insurance provider.Reduction of Operation ComplexityThe company used a n umber of applications to manage the daily activities.As a result, a number of interfaces had to be monitored and managed which proved to be very difficult.It thus became important to reduce the number of interfaces and bring about standardization across the interfaces.EXPECTATIONS FROM ERPReduction in general cost through improved efficiency and increased productivityDrive business innovationTo a give a competitive advantage to the company over its competitorsDriver for business growthImprove overall customer experience and satisfactionEnsure regulatory complianceSupport global operationsCreate new r regularue streams for the companyEnsure growth of existing revenue streamsCHOICE OF jack oakThe major factors contributing to the choice of patsy are as followsIntegrated Enterprise platform for transacting GICs businessThe company required a platform that would integrate all the processes and procedures across the enterprise.The system was required to standardize all processes and s treamline set of processes across the organization instead than streamlining large number of procedures.The company expected the have an enterprise wide visibility of business operations.SAP Reinsurance solution being used by Global Industry leaders Munich Re and Hannover ReOne of the major contributing factors to choosing SAP was the companys biggest competitor and the global industry leader Munich Re and Hannover Re had use SAP Reinsurance system.Adoption of the global best practicesBy 2005, SAP Insurance had almost all insurance service providers running it.SAP had in the past implemented both the insurance and reinsurance packages for multiple clients.This enabled SAP to gain an understanding of the global best practices in the prevalent 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 had strong positive experience with SAP for their insurance portfolioERP IMPLEMENT ATION START get out Early 2005ERP GO LIVE DATE February 2006SAP VERSION SAP R/3 Version 4.7GEOGRAPHICAL SCOPE Offices in India, London and DubaiSAP MODULES IMPLEMENTEDSAP FS-RI ReinsuranceSAP FS-RI is an insurance solution that enables reinsurance firms, direct insurers and brokers to come upon a reinsurance process that is completely integrated and streamlined.SAP FS-CD Collections / DisbursementsSAP FS-CD is a solution designed for insurance service providers to standardize and streamline their billing and disbursement activities for their policyholders and agency holders.SAP IM-IC (CFM) Investment ManagementSAP IM-IC (CFM) module provides useful tools for coverage of WBS which are in progress, PO commitments and assets that have been capitalized.SAP FI-CO FinanceThe SAP FI-CO module can be viewed as the core of the integrated SAP system as it deals with the monetary impacts on business and other modules of SAP.SAP HR Human ResourcesSAP HR is the largest module implemented It deals with the management of valet de chambre resources and human capitalSAP BIW Business IntelligenceSAP BIW is the business intelligence module that provides analytical, reporting and data warehousing solutionIMPLEMENTATION CHALLENGES frontmost SAP Reinsurance (FS-RI) implementation outside Europe.First SAP FS-CD Implementation in India.First SAP IM-IC implementation in India in an Insurance/Reinsurance environment.One of the few Active Reinsurers in the world using SAP FS-RILegacy data MigrationCustomisation of Reinsurance Module (FS-RI)Risk Manager in FS-RI (Facultative Business) had not yet been implemented even in EuropeIMPLEMENTATION HIGHLIGHTSOpportunity to critically re-look the companys business processes and practices and incorporate changes wherever required.Elimination of data inconsistency by correcting, validating and cleansing legacy data.Opportunity to streamline the organisation by adopting the global best practices in the industryBUSINESS BENEFITSTight integr ation between underwriting and technical Accounting processes thereby providing better business focus.Integrated processes eliminating almost all redundancies and inter-departmental reconciliations.Increased automation reduced manual intervention and improved data quality.Improved reserving process (tracking the discipline of outstanding loss reserves).FINANCIAL STRATEGIC BENEFITSSAP allowed visibility of all assetsStandardized evaluation of all assets were achievedDaily updates to the investment portfolio enable the company to achieve integrated investment managementEffective real time risk compendiumTOTAL COST OF OWNERSHIP95 % of the companys requirements were met by th standard solution offered by SAP and minimal customization was requiredOPERATIONAL BENEFITSThe operation benefits as evaluated by the company after two years of implementation are as followsKEY PERFORMANCE INDICATORS (KPI)IMPACTTime to measure performance-70%Time to plan for new projects and activities-30%Time t o 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 transaction mapping+90% proximo PLANSUp gradation from SAP R/3 Version 4.7 to SAP ECC 6.0 platformConnecting offices in Moscow, Malaysia and South Africa to the upgraded ERP networkGeneral Insurance Corporation of India has derived significant benefits from implementation of SAP Reinsurance. From this case it is evident that SAP has the potential of being a measure source of improved efficiency and competitive advantage for insurance service providers.APPENDIX1 Monitor Performance Executive Dashboard2 CEO Dashboard3 Sales Dashboard