RSA: Accenture Insurance Solution

RSA is a leading multinational general insurance group. The company has operations in 28 countries and provides its products and services to more than 20 million customers in over 130 countries.

For 2007, the Group reported net written premiums of UK £5.8 billion.

In early 2003, a new Group chief executive officer was appointed by the board with a goal to make RSA a stronger, higher performing business; one that customers and employees could again be proud of and one that delivered to shareholders. Following a comprehensive strategic review, a demanding set of objectives was drawn up aimed at turning the business around. These included strengthening the Group’s capital position, building a new management team, embedding a performance culture and transforming the operational performance of its ongoing business.

The operational transformation had two elements. The first was to restructure and de-risk the ongoing portfolio by focusing on general insurance, and by successfully exiting life and underperforming businesses. The second was a demanding operational improvement program. Two key targets were publicly announced: to cut the expenses of the Group’s ongoing businesses by UK £270 million and to achieve a combined operating ratio of better than 100 percent on average across the insurance cycle for the Group’s ongoing business (combined operating ratio is a measure of industry profitability).

A key component of the operational improvement program was a significant investment in the key segments in which RSA operates as well as enhancing the underwriting that underpinned pricing. Through multiple mergers and acquisitions the business had acquired several systems and a variety of manual processes. Many of the policies' details were stored on paper files and underwriting was often performed manually.

Accenture was appointed to work with RSA as the strategic partner to implement the transformation. This would exploit Accenture’s industry insights, transformation expertise, software assets and outsourcing capabilities. The two companies structured a contract with a risk and reward payment arrangement based on the delivery of the program benefits: within budget and on schedule. Both organizations were aligned to gain by delivering against the five-year plan to transform the insurer.

The comprehensive program included:

• Implementing Accenture Insurance Solution (AIS) across the majority of RSA’s Corporate and Small Business segments as well as its Broker and Affinity Personal Motor books. AIS supports the full life cycle from Quote and Buy, to Servicing, Single View of Customer, Billing, Agency and Agent Accounts, and Risk Aggregation. It is integrated with Accenture’s Claim Components to give full cycle claims support
  
  
• 22 strategic products have been developed to take forward new business for the equivalent of more than 80 legacy products. The legacy book of more than 500,000 policies is being migrated onto the new systems
  
  
• New risk appetite, supported by the automated underwriting facility within AIS, to select the best risks and to price them appropriately
  
  
• Commonality of operational processes that are consistent across products enabling cross-skilling. One thousand retrained underwriters and clerical staff. Operational efficiency driven by automated processes such as scanning, indexing, workflow, centralized print
  
  
• Automated controls and automated underwriting licences
  
  
• Call center capability for broker and direct to affinity customer channels and EDI capability for broker
  
  
• A new data warehouse to support MI for operations, and as a granular source of data for pricing decisions and portfolio analysis
  
  
• An integrated Product factory to give the business greater control over their products and their rating flows

RSA and Accenture staff have worked side by side in integrated teams to deliver the Sales and Servicing transformation. Accenture assembled a strong global team with extensive experience in large-scale program delivery and system integration.

AIS implementation has supported RSA in driving forward product and process rationalization. Many manual processes have been eliminated. More than one thousand staff members are using the AIS system to support their work. It gives RSA the system support to reduce underwriting leakage through optimized risk appetite, underwriting excellence and controls. Migration of the legacy book is under way.

RSA is meeting its promise to the analysts of being below 100% combined operating ratio for the cycle.

Further long-term success for RSA will depend on consistent delivery against strategic objectives. For instance, RSA is assessing extending the benefits of AIS to further books of business. For RSA and Accenture the partnership is about more than reducing costs—it is about positioning RSA for continued, sustained performance.