The extensive technology program required to generate annual savings of $235 million by 2013 for Suncorp-Metway's insurance business will be a continuation of the work recently finished on the integration of Promina, and be complete by next June, according to the newly promoted executive responsible for making it happen. Suncorp's chief information officer, Jeff Smith, was promoted in April to a newly created role as group executive of Suncorp business services, which now gives him direct control over procurement, real estate and human resources operations.
He says work is already under way on the program, announced on May 21 by chief executive Patrick Snowball.
This will involve the insurer aiming for at least a 3 per cent improvement in margin over the next two years from measures including a single pricing and claims engine.
The company will deploy a web-based claims system called Guidewire ClaimCenter right across its home and motor insurance brands.
Its workers' compensation and compulsory thirdparty (CTP) insurance products already have multi-brand technology systems.
"Home and motor insurance are the really big ones in insurance, so we are trying to make sure not to step on each other as we roll out the technology," Smith says.
"The home claims will initially be rolled out in Sun and GIO in the first quarter of this coming financial year, and then it will be rolled out in AAMI and Apia and the others in the third quarter.
"We are doing the opposite in motor insurance, where we will start with AAMI and Apia and do Sun and GIO last."
Smith says much of the technology work would follow similar plans as those recently accomplished in updating commercial insurance systems. He flags internal change management as potentially the most challenging aspect of the new project.
There is bound to be some internal resistance, he says, but he expects staff to understand the changes are necessary.
"We will be retraining thousands of people who are used to using systems that are 15 years old," Smith says. "So I think that is the single biggest risk. Some people are very open to change and others are a bit less so." He says the $235 million savings will not come from decreasing future technology spending, but will be driven by improved processes following the technology changes.
He says when the company works in one uniform claims environment, it will be possible to aggregate procurement and drive significant savings.
It will also prevent AAMI, GIO and Apia from competing for each other's customers and allow more accurate pricing for risk.
The systems integration will cost $120 million, but Smith says this will not be heading to the coffers of external suppliers, as the majority of the work will be done in-house.
He says all costs will be absorbed in business-as-usual budgets, so no separate integration or capital budget will be specially created.
Aside from the new claims and pricing systems, Suncorp will be moving the whole business on to an Oracle financial system, like that previously used by Promina.
The company has also just completed a project to migrate all of its staff from seven separate payroll systems to one.
Its payroll is now all based on a cloud-based PeopleSoft application.
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