Life & Annuity/Pension breakout: OUTSIDE-IN DIGITAL FORCES, BEST PRACTICES & CSC'S STRATEGY

Transcription

1 Life & Annuity/Pension breakout: OUTSIDE-IN DIGITAL FORCES, BEST PRACTICES & CSC'S STRATEGY Michael W. Risley Industry General Manager

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3 Agenda I. Insurance Market View II. Digital Technology Forces III. CSC Industry Strategy 3

4 Insurance Market View 4

5 Life Insurers are in an OK Place Prolonged low interest Profitability of annuities, savings products, life new business still marginal Challenged for any reinvestment risk with a long liability timeframe Yields improving Equity markets improved Bond yields down with higher interest rates Global regulation changing the strategies of many companies Continued scrutiny on all aspects of costs 5

6 Growth is Challenging Adapting to Changing Customer Expectations Boosting Operational Efficiencies, Lowering Cost Structures Maintaining/ Gaining Competitive Advantage Anticipating New Regulatory Requirements 6

7 Property & Casualty Life & Annuities Market Forces Shaping Insurance Established Markets Growth Markets Increasing Longevity Legacy Technology Globalizing Operations Regulation Investment Returns Growing Middle Class Digital, data, mobile Transforming Claims Lower Tech Influence Higher Tech Influence Impact of Catastrophes 7

8 New Digital World will Change the Focus of the Entire Business Distribution Operations Applications Products & Markets Infrastructure 8

9 Products and Markets Realigning for Growth Organic growth and M&A Invest in new markets, products and LOBs Digital Business 9

10 Products and Markets 10

11 Distribution Changes 60% of the modernization projects in Life Insurance companies are focused on front-office (Gartner 2013) Hispanic/Ethnic population in North America; really understanding the marketplace Next-gen portals - with expanded functions, social collaboration capabilities, better design for mobile devices, improved user experience via more sophisticated dynamic user rules integration into multichannel networks Smaller software vendors exiting market or facing stability issues Refocus of many insurers on retirement/wealth management distribution 11

12 Health Exchanges: Impact To U.S. L&H Business The U.S. Affordable Care Act - profound impact on the manufacturing and distribution models of the U.S. benefit space lead to channel disintermediation Where companies are expanding, there is growth in the group and voluntary benefits markets The U.S. group and voluntary employee benefits space will see rapid change over the next months as business and social drivers reshape the medical benefit landscape and have corresponding impact on the benefit segment as a whole 12

13 Distribution Diversification and Ease of Use Improve service to traditional channels- embrace mobility Reach new markets faster Crack the code on analytics/data 13

14 Distribution Complexity Distributor Order Entry Clearing House Carrier Company Agents CSC Intelligent eapp For the independent Broker/Dealer channel CSC provides transaction support via Jets/Jets II for: Real-time inquiries Transfers Withdrawals Applications, incl.: CWA Payments 14

15 Operations Business Process Transformation Refocus innovation on consumer processes Robotics Expand service models (BPS/BPO) Configurable Products Full Service Standard Environment Full Integration 15

16 Applications Rationalize & Refactor Rationalize, integrate and extend portfolios Robotics New tools Squeeze more value from Apps Outsourcing 16

17 Infrastructure Next-gen Create next-gen workplace/byot Globalize and virtualize Enterprise orchestration and security 17

18 csc.com/digital_insurance 18

19 DATA changes role and structure of insurer and insurance Shift from loss event indemnifier to loss event avoider Multi-touch, positive customer engagement Transformation of consumer and corporate risk Reduces human brain as barrier to entry to insurance Machine learning Micro-risk, micro-premium framework policy redefines micro-insurance 19

20 DIGITAL changes seven insurance dynamics Back office to Front office Employee to Customer Fixed to Mobile On-premise to Any premise Local to Remote Human to Machine Capital expenditure to Pay by use 20

21 Insurance in an Outside-In World Sold by Agents Bought by Customers Transaction Product-Centricity Outside-In Relationship Customer Experience Paper Based Digital/Real Time Data Capture Indemnification Inside-Out Data Analytics Continuous Value Carrier Ecosystem 21

22 CSC Industry Strategy 22

23 Global Life Insurance Key IT Projects and Change in IT Spend Source: Ovum 23

24 Spending up to 80% of the budget on maintenance, with IT projects often having to be self-financed from savings 24

25 CSC Market Position in L&A/Pensions is Dramatically Increasing Software 33 new Integral licenses (3 Java) in last year 310 licenses installed in 46 countries Business Process Services Significant transactions Infrastructure Growing base as CSC emerges as global leader in FS infrastructure outsourcing Transformation Major transformational projects underway 25

26 Our Strategy Spine is our Insurance Software Insurance software Backbone of our ecosystem and differentiator Insurance software & BPS Infrastructure Applications New technologies Business Process Services Enables transformation for most Infrastructure Rapidly moves to as-a-service, and recognition orchestration is key Application services Modernization and conversion become more realizable with advances in technology Integration of next-generation technologies Big data, Cloud, Cyber, Mobile drive digital insurance 26

27 Our Strategy Geography Americas Europe Asia Pacific Geographically balanced business broadly reflects global insurance IT spend Size of Americas revenue reflects particular criticality of U.S. insurance software & business process services Asia, in particular, has seen significant growth for CSC with multinational insurers Balanced European business across UK, France, Germany and Central Europe, and Nordics 27

28 Our portfolio: Familiar solutions augmented with expanded strategic initiatives underway at CSC Activity Product Development Distribution Support New Business Underwriting Customer Service Strategic Technology Solutions PRODUCT ACCELERATOR VISUAL PRODUCT MODELING SYSTEM (VP/MS) PERFORMANCEPLUS Intelligent eapp nbaccelerator CUSTOMER SERVICE ACCELERATOR CYBERLIFE WEALTH MANAGEMENT ACCELERATOR NEXT GEN ADMIN Key CSC Strategic Initiatives AWD SaaS/ Cloud solution enablement Big Data Cybersecurity Mobility Full-Service BPO Functional BPO Life as a Service 28

29 Our Strategy Builds More Strongly on Partnerships, in Many Cases Competing and Partnering with our Strategy Defined by Orchestration Infrastructure Led Disruptive Players Consulting Led Compete on global scale, technology independence Partner around orchestration of increasing multisourced, as-a-service models Applications Led Partner and compete on deep insurance knowledge and knowledge of client s environment and ability to shape journey and integrate Regionally Focused Partner on ability to execute technology implementation Compete on specific insurance domain expertise from our IP heritage Partner around apps modernization in the cloud Compete and partner across the business process, applications and technology stack using our global reach and technology portfolio 29

30 Our Strategic Intent is to be the Services Partner for Globalizing Insurers and be a Differentiated Provider of Insurance Solutions Be the services partner for globalizing insurers: focusing on infrastructure differentiated by CSC Agility Platform and cloud, and with apps differentiated by our IP Differentiate with insurance solutions, showcased through our Business Process Services and integrated with our strategic offerings: integrating our apps services and our next-generation portfolio for 1,500+ software clients 1 Infrastructure: Enable insurers to move toward multi-provider as a service models, securely orchestrated and highly automated 3 Insurance solutions: Develop clear roadmaps to take our insurance software products forward, enable insurers to embrace digital technologies and use our software to support transformation of their operations 2 Applications: Help insurers modernize complex and often aging application estates and embrace new customer- and agent-facing technologies 4 Markets: Expand in Asia and in growth insurance domains where technology is transforming insurance, such as big data and analytics 30

31 As Part of an Overall Digital Strategy, Integrating Tactical Solutions into a Seamless Digital Experience Strategic Approach mobile sms Tactical Approach call centers apps api online web Remote collaboration and engagement Advanced risk and decisionmaking tools Distribution transformation & channel strategy Digital Insurance Organization Virtual servicing, automated provisioning Customer experience excellence Product and service innovation, partner ecosystem Attractive value propositions: Simpler products and services that meet specific client segments needs Competitive pricing on utility basis Differentiation through digital engagement Frictionless processes: Self-service 24x7 Front-to-back digitalized processes Paperless Authentic, efficient and friendly omni-channel experience 31

32 Our Infrastructure Strategy is to Orchestrate Insurers Ability to Implement and Manage with Agility Faster Moving Applications On premise 1 Virtualized 2 Private Cloud 3 Hybrid Cloud 4 IT aas 220 volt computing Apps designed for heterogeneous infrastructure Off premise Barriers to evolution diversity of in-house infrastructure design of apps standardization of infrastructure, homogeneity of applications 32

33 Our Application Strategy is to Enable Insurers to Modernize Appropriately and Deliver as a Service Customer, agent, broker increasingly Web- or mobile-based applications Admin. portals, call center, and process engines Core processing engines for the portfolio Finance, HR, and the systems of corporate management Modernize appropriately based on business value at each of four layers Modernize sufficiently to enable provision as a service (private, public, hybrid clouds) Coordinate through CSC Agility Platform to create enterprise App Store CSC SaaS-Based Industry Solutions Midrange Existing Applications Traditional Applications Mainframe CLOUDIFICATION THROUGH MODERNIZATION BUSINESS PROCESS MANAGEMENT SYSTEMS ENTERPRISE APPLICATION INTEGRATION MESH SaaS DEPLOYMENT SaaS-Based Vertical Apps SaaS-Based Horizontal Apps Consumer Applications DATA MESH SECURITY SERVICES 33

34 CSC Insurance Portfolio Strategy Next Generation Insurance Solutions CSC Portfolio pa nba Integral Exceed POINT IN SICS wma CyberLife 1 Roadmaps Taking 1,000+ insurers forward to realize future benefits of their investments 1.Transparency and clear view of leverage 2.Increased global portfolio leverage == increased value 3.Increased trajectory, quantity and speed of innovation 2 FuturEdge for Insurance Deploying CSC s nextgeneration portfolio for existing and new clients 1.Digital strategy & governance 2.Apps modernization 3.Omni-channel UX 4.Data & analytics 5.Digital claims 6.Cloud & as a Service 3 Digital Insurance Transforming insurance process across the value chain from: 1.Back office to front office 2.Employee to customer 3.Fixed to mobile 4.On-premises to any premise 5.Local to remote 6.Human to machine 7.Capex to pay as you go 8.Consumable applications 4 Business Process Business Process Services Running operations for insurers maximizing automation and enabling multi-sourcing CSC Partner Applications CSC CSC Apps services & 3rd party IP Infrastructure CSC 3rd party, e.g., IBM, Amazon orchestrated by CSC Agility Platform A.I.A LEAD REPORTING: Campaign id is 0514-EVM-CSCASPIRE2014 on SFDC 34

35 Summary of Life & Annuity/Pension Market 1 CSC s view is that the digital transformation is real, starting to happen among technology innovative insurers, and will become mainstream 2 Our challenge is to be at the forefront of this, as we were at the forefront of the automation of policy management 3 Our infrastructure strategy is about enabling evolution, our applications strategy about modernization, and these underpin our insurance software strategy 4 We will only be successful if we bring with us our large, global insurance software client base, which is the spine of our business: we are committed to our software 4 Increasingly, our focus must shift from feature function in the back office to unlocking process and data for use by third parties and consumers 35

36 Thank You 36