More flexibility in the insurance business

Digital bancassurance is a new bearer of hope for both banks and insurers. A German bank is bringing insurance and banking logic together in a project supported by RIFE.

Digitising insurance and banking may seem like a simple matter to industry outsiders. After all, both industries deal with virtual products. What could be more obvious than digitising one in the same way as the other? In reality, however, companies face significant technical challenges when trying to make this happen.

One German bank had a competitive insurance model that worked well. However, it became increasingly clear that the model had several gaps, and the bank did not yet have the right solutions to address them.

Insurance brokerage is an important additional business for the bank, but until then it had not been sufficiently supported from an IT perspective. Changes had to be introduced simultaneously in three or four different systems. This meant waiting in several separate queues until the IT department had sufficient resources to process them. As none of these systems had been designed specifically for insurance, compromises were often necessary.

According to Jarosław Bucoń, Chief Customer Officer at Sollers Consulting, a lack of flexibility is one of the biggest challenges banks and insurers face.

“We often see how difficult it is for companies to adapt to the market because their IT tools prevent change.”

– says Jarosław Bucoń, Chief Customer Officer at Sollers Consulting.

In the case of this bank, heavy reliance on the core banking system meant that flexibility in the insurance business suffered and time-to-market was slower than desired. It was clear from the beginning that modernising the existing IT landscape would not be sufficient.

Most solutions related to insurance are designed exclusively for insurers. However, the needs of a bank are different. The bank decided to implement RIFE, a platform designed specifically for bancassurance. The target users of RIFE include banks, retailers and, more generally, companies that sell insurance without being insurers themselves.

One of the biggest challenges of the project was the bank’s IT architecture.

“The project was very results-oriented. To achieve the goals in practice, we had to reorganise the entire banking architecture.”

– says Anna Szczygielska, Senior Consultant at Sollers.

This led to the creation of a separate sub-project. Insurance and banking logic were decoupled, and all insurance logic was centralised in RIFE. This was one of the key steps needed to increase flexibility and accelerate the implementation of product changes.

The implementation is the bank's first fully agile project. Agile has helped manage the challenges of the lockdown. "We had to find a way to deal with the "unknown unknown"," notes Szczygielska, senior consultant at Sollers. The team-centric approach is one of the key success factors. "We work as a team, with professionals from both companies collaborating on a daily basis," Bucon reports. This makes it possible to take the best from both sides, the bank and Sollers Consulting, and combine knowledge and experience, he says. The project was carried out entirely remotely. In the first phase, the entire product portfolio was implemented, both as individual products and in bundles. In the (current?) second phase of the project, the bank is preparing the integrations. The new system is to be rolled out at the end of the year.