Australian insurers are huge tech adopters. They have invested and continue to invest massively and at a frenetic pace to transform every facet of their operations with the best digital wares available. 

For these insurers, efficiency is the name of the game in one of the biggest markets among the advanced economies, generating about $75 billion of annual gross written premium.

From quoting and binding to claims processing, billing and renewals, insurers have built a sleek digital machine to operate 24/7.

As one insurance chief executive puts it, their business’ embrace of tech has led to happier customers and higher productivity. 

The pace continues – Australian insurers continue to adopt and embrace new operating systems that deliver a smoother, more efficient workflow. One of the core challenges with systems integration projects is having the knowledge and expertise on hand to deliver the project successfully. 

This article examines what to look for in system integration partners and provides some best practice examples to help ensure a smooth transition. 

How to choose the right partner

1. Ensure that your chosen provider has a proven system implementation track record in Australia, vetted by live customer references.
   
   
2. Require a tangible roadmap for innovation, adoption of GenAI and acceleration of system implementation process with appropriate milestones and success measurements. 
   
   
3. Select a partner with experience working within the Australian third-party data enrichment integration ecosystem.
   
   
4. Ensure they are up to date with ever evolving Australian regulations.

Crucially, select a partner that fits with your organisation’s cultures, values and ethos. 
Xceedance knows first-hand the importance of a smooth tech modernisation process. In Australia, it has overseen system upgrades at many insurers in recent years, and the pipeline of work is growing as technology keeps getting better.

Xceedance says preparation is key and engaging an experienced system integrator makes a big difference on any project, regardless of the complexity.

“Insurers should look for system integration partners who have a proven track record in Australia,” Xceedance business leader for key accounts in Australia Prateek Vijayvergia says.

“You want a partner who can run and govern the project and manage the risks around it. That’s critical given all the regulations in Australia. Equally critical is a partner who is flexible and scalable.”

In an Xceedance project with a major personal lines and commercial insurer, the work was completed in six months, as scheduled.

The upgrade involved integrating the insurer’s legacy system with one it acquired from a specialist vendor. The company also wanted to create a new payment gateway and a data warehouse for reporting and auditing. As the client sells through brokerages as well, it was important for the changes to connect seamlessly with its quote-and-bind portal.

Throughout the six months, the insurer operated as usual without disruptions from the systems upgrade.

Done right, efficiency gains are almost instantly visible when an insurer goes live with an upgrade.

Best practice for smooth system integration projects

1. Establish a cross-functional governance committee with clear regulatory oversight
   
   Form a steering committee comprising representatives from IT, Underwriting, Claims, Policy Administration, Finance, and – critically – Compliance and Legal. This ensures that all domain and regulatory requirements are covered from the outset. 
   
   
2. Conduct comprehensive data mapping and cleansing pre-migration
   
   As an industry, insurance runs on data. Ensuring the data within your system as is as complete and as clean as possible in advance of implementing any new system will avoid moving errors into the new environment. 
   
   
3. Conduct testing with rigour
   
   Involve business users to develop test scenarios that imitate realistic processes and apply complex business rules. Ensure to include policy lifecycle, claims and compliance processes within your testing programme. 
   
   
4. Expect the best, plan for the worst
   
   Have a back-up plan. Ensure there are fail-safes, plan B’s and rollback options. This will ensure business as usual, even if critical errors are found after the new system goes live. 
   
   
5. Include change management in your planning
   
   All systems are only as good as the people using them. Train your people on the new system. Conduct a phased rollout so that training can be completed thoroughly. Develop a communication plan that explains the new system, how it works, and the benefits it is expected to deliver. 

Xceedance head of system integration Deepak Agarwal says: “Insurers need to identify the aim of integration in terms of what is the objective, the overall specific business goals in terms of operational efficiency, customer experience, compliance.”

He says all departments in the insurance operation should be engaged from the start about system upgrade work that is about to begin, and their feedback sought to iron out potential trouble spots.

“This is because all these departments will be affected during the implementation phase. They should be part of the process right from the beginning to prepare for changes.
“Another thing, when the system integration partner starts work, they spend lots of time understanding current processes. So, if they’re documented well in advance, it will help to improve the overall efficiency of the implementation.”

Data is another high-priority area in any system integration project. Insurers should focus on data accuracy, establishing clear migration plans and testing protocols. 

Mr Vijayvergia says generative artificial intelligence (GenAI) has made data protection more important than ever.

“Large language models (LLMs) are mushrooming, but you only want to use the LLMs that have been discussed and approved with your client. You should always keep your client up to date about what LLMs are being used behind the scenes.

“There should also be a very clear audit trail for the usage of generative AI, and also how the client data is, if at any point, being used in that model, so there’s no compromise of client data.

“If and when any AI component is implemented in a system, again the stakeholders should be made aware, and they should be brought on board formally. There should be a very explicit discussion, otherwise it just would not be fair, and it opens a can of worms in terms of data leaking to these GenAI models, which eventually might become a liability for both parties.”

System integration should ideally be managed by experts who have done such work many times.

“The collective knowledge and experiences of multiple implementations is what the system implementer brings,” Mr Vijayvergia says.

Mr Agarwal says there are many key performance indicators that can show if a tech modernisation project has met its objectives.

“Meeting schedules and budgets are definitely the top KPIs,” he says. “From the client’s perspective, we also take satisfaction scores – whether the client’s different departments are happy with the overall system they are getting.

“So, in a nutshell, right from day one, we aim to understand the requirements of our clients until they are self-sufficient, and we provide help to the customer throughout their journey.”