When AXA Financial decided to enter the property/casualty reinsurance field, it did so with a clean slate. Not burdened with inefficient legacy systems, Bill Taylor, vice president of operations for AXA Re P&C, says, It was exciting from day one. We got to take a fresh approach to the whole thing.
That fresh approach meant going against some traditional thinking, for instance, deciding not to use a transaction-based system. Taylor wanted a data warehouse solution for accumulating data from its MGA customers. The predominant challenge was to collect data efficiently, properly, and with flexibility to satisfy the variety of things you have responsibility for as a primary carrier, he says. Meeting that challenge prompted the next hurdle: finding the right vendor solution.
Although his preference was clear, Taylor did look at transaction-based systems, but he kept returning to a data warehouse concept, even though he knew there were limited options for a data warehouse with a P&C data structure at the time (1999). Thazar was a young company projecting itself as having a data warehouse solution, so I immediately started down the track with them, says Taylor. There were other options, such as IBM or Sybase, but Taylor says he did not feel his company would get the attention it needed if it went with a larger vendor. We were brand new and didnt have any business, Taylor says. I knew Thazar was new, so to me that was a benefit. He says he discovered Thazar had a robust data structure and a sound technology platform. After three months of research, AXA Re P&C had its solution and signed a contract with Thazar late the same year.
Rob Clark, technology manager for AXA Re P&C, says the company operates on two servers, the data warehouse, which is an Oracle server, and a Web-based front-end system running on NT. We coordinate all the information together as one transaction and load it as one record, Clark says. It is then transformed into an XML file that is run through the data warehouse server and populates all the different tables for each line of business. It streamlines the process a great deal. Even though we are loading data from different MGAs, they all look the same at the end of the day.
In the traditional way of doing things, Taylor says, an MGA has the responsibility of providing data to its primary carrier either online through a transaction system or by having the carrier shoehorn the data into a transaction system. Problematic is how he describes transaction-based systems. You dont have proper balancing, and its fraught with all kinds of errors from a regulatory and statistical reporting standpoint, he notes.
Taylor says AXA Re P&C has evaluated the systems platforms used by each of the MGAs it works with, including the data structures of those platforms. The reinsurer found some of the systems were not transactional, partly because many of the systems were homegrown. We had to work with the MGAs to define what we need, work out a project plan, and in most cases, they would have to augment or modify their structures to accommodate our requirements, says Taylor.
AXA Re P&C had to make the MGAs understand the changes were advantageous for both sides. We werent asking them to change their technology or their platforms, Taylor says. Thats one of the powers of the warehouse. We take truly disparate systems and data structures into our process and then standardize them into the warehouse for a single view.
Taylor says AXA Re P&C has realized some hard-cost return on its investment. When we compared costs to a transaction-based system, there was a clear savings, he says. It also allowed us to have a leaner staff. Even more compelling, though, are the intangibles.
He lists the intangible ROI as the ability to analyze business from a profitability standpoint, the power of a flexible environment that allows easier integration into other administration systems, and the value-added the system provides back to the MGAs.
Whether its hard or soft, ROI is the name of the game in todays world of technology decisions. Taylor says he believes his company has taken the winning strategy. Its been a challenge, he says. But its come a significant way.
CaseFile
The Problem: Start-up program- business reinsurer opted for a data warehouse solution rather than a transaction-based system.
The Company: AXA Re Property & Casualty Insurance
Web site:www.axa.com
net written premium: $300 millionThe solution: INSsight by Thazar Solutions Corp.
Web site:www.thazar.com
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