IBM and global insurer ERGO Group agree on new platform service
Cloud-based IBM Insurance Platform delivers faster, flexible, affordable APIs
With more than 40 million customers and operating in more than 30 countries, ERGO is one of the largest insurance groups in Europe. IBM has teamed with ERGO Group to jointly develop a system to manage any closed books of traditional life business in the German market on the IBM Insurance Platform.
The term “closed life book” refers to life insurance policies that are in runoff—those that are no longer being sold on the market but still are administered by the insurer. These books of business can present challenges to insurers because the policies often reside in legacy systems that can be hampered by siloed, inflexible and expensive-to-maintain technology.
“We want to migrate our book of business to a modern IT platform,” said Clemens Muth, ERGO’s executive board member responsible for life and health insurance, on the announcement of the agreement. “This new platform from ERGO and IBM will also provide the opportunity for the professional management of traditional life books for third parties after implementation.”
A platform to manage all aspects of an insurer’s policy administration and claims for closed books delivers distinct cost savings and efficiency to the insurer. State-of-the-art platforms, as opposed to traditional policy management systems, provide the efficiency needed to make consolidation of closed book systems economically viable. ERGO plans to migrate 6 million policies to this new IT platform. The system is designed to also accept closed traditional life books from other German life insurers.
The IBM Insurance Platform offers a vertically integrated set of insurtech capabilities offered as a service on the IBM Cloud. The platform’s first applications were unveiled in late 2017 to address the needs of the North American group-benefits market. The work between ERGO—which is owned by insurance market leader Munich Re— and IBM will extend the platform to administer closed-book life policies for Germany.
Sandip Patel, Global Insurance Managing Director for IBM, sees broad potential for the industry in moving to a platform-based approach.
“The IBM Insurance Platform offers insurers a way to drive expenses down to new levels of flexibility and savings, while giving them the tools and capabilities to analyze and manage policyholders in this important new market,” Patel said.
The closed book life application will offer the same features to participants that other IBM Insurance Platform clients receive, including service-based pricing, IBM Cloud security and scalability, and connections to APIs from IBM and third-party participants on the IBM Cloud for Financial Services.