Share this post:
IBM has agreed with ERGO Group to jointly develop on the IBM Insurance Platform a system to manage closed books of traditional German life business. With over 40 million customers and operating in over 30 countries, ERGO is one of the largest insurance groups in Europe and owned by one of the global market leaders, Munich Re. ERGO plans to migrate 6M policies to this state-of-the-art IT platform, which is designed to also accept closed traditional life books from other German life insurers.
Clemens Muth, Executive Board member of ERGO Group and responsible for life and health insurance, said on the announcement of the agreement:
“We want to migrate our book of business to a modern IT platform. This new platform from ERGO and IBM will also provide the opportunity for professional management of traditional life books for third parties after implementation.”
The term closed life book refers to life insurance policies that are in run off and 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 which can be hampered by siloed, inflexible and expensive to maintain technology. 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.
The IBM Insurance Platform announced the first application in Q4 of 2017, serving the North American group benefits market. The platform offers a vertically integrated set of insurtech capabilities offered as-a-service on the IBM Cloud. The work with ERGO and IBM will extend the platform to administrate closed-book life policies for Germany. Sandip Patel, Global Insurance Managing Director for IBM, agrees that there is market potential. “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 to policyholders in this important new market,” Mr. Patel explains.
The closed book life application will offer the same features to participants that other IBM Insurance Platform clients receive, including as-a-service pricing, IBM Cloud security and scalability, and connections to APIs from IBM and from third-party participants on the IBM Cloud for Financial Services.
Platforms deliver an economic advantage by leveraging common capabilities across a wide range of markets and customers, spreading costs across the ecosystem to lower expenses and build capabilities for all participants. Synergies across the IBM Insurance Platform, including development tools developed with the Insurance Service Hub in Germany, cloud provisioning, and API interfaces across markets will bring advantage to these industry first movers.
Learn more about the IBM Insurance platform here.