Insurance company Tokio Marine HCC overhauls legacy systems

Speciality insurance company Tokio Marine HCC is working with digital integration solutions provider Incessant Technologies to overhaul its disparate legacy systems and build new products at pace.

TM HCC has more than 2,500 employees operating in the UK, the US, Ireland and Spain, and underwrites more than 100 classes of speciality insurance from account errors and omissions liability to court bonds and crops.

Formerly called HCC Insurance Holdings, the company was acquired by multinational insurance provider Tokio Marine in 2015 for $7.5bn, and owes the complexity of its legacy systems to a long history of mergers and natural organic growth.

“In growing the way we have, we inherited a lot of legacy systems, so there were nine legacy policy administration systems that we were connecting things through,” said Mick Gorham, head of application development and testing at TM HCC.

“The inefficiencies of having so many systems to maintain meant the business was starting to become at risk through the core underwriting platforms we were using.”

Gorham added that the age of the systems also presented maintenance risks, and that people who used to support them had subsequently left the company. “We decided it was time we consolidated these legacy systems and brought all of our lines of business together onto one platform to mitigate the risk,” he said.

To do this, TM HCC began collaborating with Incessant Technologies, an NIIT Technologies company, in 2015 to implement Pega, a business process automation (BPA) software.

“It’s widely used by many large enterprise organisations to transform customer engagement and to automate the back office, and HCC are using Pega as an enterprise transformation platform,” said Adrian Bignall, global head of sales and customer success at Incessant Technologies.

“Specifically, they’re using a strategic application called Pega underwriting for insurance [PUI], which is being rolled out across all lines of business.”

Bignall also said TM HCC is using the Pega solution on a much larger scale than most enterprises normally would.

“They’re doing a large, wholesale technology change. So they have Sightcore at the front end, Pega as the business orchestration and underwriting layer, BizTalk as the middleware, and Sequel Eclipse which is the policy admin system, and they’re implementing all of this technology at the same time.

“When you’ve got so much change from a technology perspective, the main challenge is managing the interdependency between each one of the constituent platforms. They’ve all got to talk together seamlessly – if one changes, then the other needs to react to it.”

To deal with the technological upheaval, HCC and Incessant have developed a piecemeal, “day-two” approach to the transformation process.

“Many organisations believe that once the products done its done, but that drives behaviours where they want absolutely everything in the first release,” said Bignall. “Because this business knows there’s a day two, they don’t have to cram everything into one release – there’s going to be subsequent, continual improvements.”

According to Gorham and Bignall, this has allowed both companies to meet deadlines and accept that there will be ongoing developments.

“We’re approaching it in an agile, iterative fashion,” said Gorham. “We’re talking about understanding our lines of business and delivering them one at a time. We’re not trying to field a complete big bang solution.”

So far, TM HCC has developed solutions for three lines of business and is set to do the same with its professional indemnity, surety bonds and liability lines this year.

Gorham added that building a strong foundation through Pega means the pace of product development will become increasingly shorter.

“If you can get a minimal product out, you can then enrich the functionality. The customer is then seeing the benefit, not only at the time of implementation, but through ongoing support and how quickly they can get products to the market,” he said.

One product developed by TM HCC is an online portal for its marine liabilities division, which will allow brokers to quote and bind risks online, therefore allowing the company to trade electronically with selected partners.

Gorham claims that it previously would have taken TM HCC four to six months to build a product or solution like this, whereas now it can be done in two.