AXA Sun Life: Infrastructure Transformation

AXA Sun Life wanted to transform itself from a company organised around products to one built around key processes in order to achieve aggressive cost reductions and revenue growth. AXA Sun Life partnered with Accenture to create a technological infrastructure to support the transformation on the basis of Accenture's strong record in the insurance industry and proven expertise in large-scale reengineering initiatives.

AXA Sun Life was formed in 1997 following the merger of the Sun Life Group and AXA Equity & Law. It is the fifth largest company in the life and pensions industry in the United Kingdom and its main market areas are group and personal pensions, as well as life assurance, investment bonds and mutual funds. The majority of business, around 70 per-cent, comes from independent financial advisors. The organisation forms part of AXA Group, a global insurance and asset management giant, with over £555 ($860) billion of assets under management (December 31, 2001) and total consolidated revenues in 2001 of £45.7 ($71) billion.

In December 2000, AXA Sun Life found itself facing some key challenges. The business operated through a mixture of call centres, front offices and back offices spread across several different sites. Communication was limited, resulting in the duplication of work, breakdown in processes and inconsistent servicing of agents and customers.

These problems were compounded by a lack of comprehensive product knowledge among key staff, resulting in teams of people performing similar roles, servicing only their own product. A significant amount of time was being spent on manually fulfilling new business quotations, a process that was both costly and ineffective. Also, there was no single point of contact or telephone number for agents or customers. Along with these internal pressures, AXA Sun Life faced issues affecting the whole of the insurance industry, such as the emergence of new competitors and the need to reduce operating costs.

AXA Sun Life decided to implement widespread change to achieve aggressive cost reductions and revenue increases. The radical new program aimed to transform AXA Sun Life from a company organised around products to one built around key processes, implementing a new technological infrastructure to support this.

Targets were ambitious. New business income was to be doubled within four years, while operating costs needed to be reduced by 40 percent. To enable AXA Sun Life to achieve these goals, and continue its journey to become a high-performance business, AXA Sun Life partnered with Accenture in January 2001 on the basis of Accenture's strong track record in the insurance industry and proven expertise in large scale reengineering initiatives.

Alongside the change program, AXA Sun Life and Accenture joined forces to implement a range of operational improvements to help meet the aggressive cost reductions required. AXA Sun Life wanted to realise savings of 15 percent for 2001, as well as stabilise customer service functions ready for the deployment of the change program through 2002 and beyond. Improvements made include:

• Departmental reorganisations.
  
  
• The implementation of a new management and information system.
  
  
• The transformation of workplace culture to a customer-focused and performance-based organisation.

By June 2002, the joint team had delivered the first two phases of the work, which reengineered key processes throughout the business. Operations were consolidated to create economies of scale and key tasks were centralized.

The team created two operational areas around the new processes—a Communications Centre and an Administration Centre. The Communications Centre is designed to support agents and end consumers, acting as a single point of contact. The Administration Centre is designed to service all product and sales channels, dealing with new business and payments, customer inquiries and customer retention. A new Siebel-based technical architecture supports business processes in both centres. This shared technology reduces the need for specific system knowledge, as well as staff training.

To build the new system, Accenture and AXA Sun Life brought together experts in technical architecture, IT operations and Microsoft technologies.

Accenture worked closely with both client staff and various other IT organisations to deliver one of the most integrated Siebel architectures ever attempted. Accenture's strong relationship with Microsoft provided a robust technology value proposition—both in terms of cost and platform reliability and scalability—integrating Accenture's Siebel solution on the Microsoft platform.

Other alliance partners such as Seebeyond (a provider of business integration software) complemented this powerful technology mix. In addition, the Accenture Financial Services Solution Centre, a unique resource dedicated to the development of software solutions and services for financial services clients, enabled the team to implement significant change in a shorter time frame. Another important part of the program was the potential for re-using applications from other AXA Group companies. The team maximised this by the adopting AXA Group's global frameworks and technologies. For example, common Siebel architecture for message handling and error handling was re-used from a previous AXA Siebel implementation in France.

AXA Sun Life has already experienced improvements in both service levels and productivity, and the introduction of common processes has allowed resources to be used more effectively. For example, common processes across both the Administration and Communication centers now allow staff to be redeployed during unexpected workload peaks. At the end of the first 18 months, cost savings have been impressive:

• The 2001 cost reduction target of 15 percent to be achieved from operational changes was exceeded, with annualised savings of £8.7 ($13.5) million or 16 percent.
  
  
• The first release of the new systems for the change program was successfully delivered, and provides the capability to write and service new business at 40 percent reduced operating cost.

Overall, AXA Sun Life's first steps in its ambitious four-year project have been a great success, positioning the business to benefit from new opportunities.