Financial Information Systems in the Insurance Business

1
Financial Information Systems in the Insurance
Business

• Case study Veritas Non-Life Mutual Insurance
  Company
• Mathias Hjelt and Niklas Granberg

2
Introduction

• Veritas Group
• Founded in 2001
• Eight individual companies
• The three insurance companies showed a turnover
  of 489 Million in 2001
• Veritas Mutual Non-life Insurance Company
• Founded in 1925 as Svensk-Finland
• 160 empolyees
• 75 000 customers

3
Business processes
4
Making insurance production profitable

• Reducing production costs through efficient
  information systems
• Reducing claims, risk management through customer
  selection
• Optimizing premiums by forecasting forthcoming
  claims and sales

5
Evolution of information systems

• First IS in 1975
• Online terminals in 1985

6
Systems of today
7
Main production system

• Policy database
• Detailed information about each active insurance
  policy
• Invoicing and accounts receivable
• Automatically prints 300 000 invoices / year
• Matches incoming payment with invoices
• Claims and payments
• User enters information about claims
• If accepted the system issues payments

8
Other essential information systems

• Sales support
• SUSA
• MS Excel and MS Access based tools
• Reporting, planning and decision support
• Robot/REPORTS
• Integration with other financial systems
• Opus Capita provides a link to bank accounts
• Accounting is not integrated

9
Findings and suggestions

• Production costs cannot be reduced only by
  improving IS Business processes must be
  optimized as well
• Current systems identifies customers with bad
  credit but does not assist in profiling potential
  customers
• Reporting and decision systems are too difficult
  to use

10
Findings and suggestions

• Risks identified
• Old and chaotic IS
• Too high dependency on two companies supporting
  the old COBOL- and RPG-systems
• Dependency on a very limited number of
  individuals capable of extracting relevant
  reports from the information systems

11
Conclusion

• Ideas for new IS functionality exists, but the
  production system has already been stretched to
  its limits in terms of flexibility
• Veritas Non-Life should initiate the process of
  renewing its financial information systems as a
  project of high priority
• Expected life time of the new system gt 10 years
• Choice of IS partner is essential