The Professional Provident Society (PPS), a leading South African provider of specialized insurance services for professionals, needed to respond to changing customer demands and stiffening competition. 

PPS implemented a first-in-market, end-to-end, service-oriented architecture that has allowed it to leap far ahead of its competition with an unprecedented rate of new product introductions.

The Professional Provident Society provides insurance products to a highly-specialized market: graduate professionals such as doctors and lawyers. 

The company is a leader in its field, but increasing competition has been putting pressure on PPS to innovate and introduce new products into the marketplace. The inherent nature of its legacy systems made application and product development complex, costly and fraught with risk. As a result, it took years to introduce new products into the marketplace. In fact, PPS had only introduced one new insurance product in three years.

In order to overcome their infrastructure obstacles, PPS had to change the way they played the game on a fundamental level—making incremental advances in capability would not be enough. PPS knew that its competitors faced similar development challenges, so the company decided to make the bold move to completely replace its systems and reinvent the business.

PPS knew up front what it needed to make the transformation happen. Their strength was in knowing what an insurance company needed in order to run efficiently. They just needed the technical expertise to make it happen. PPS found that expertise with IBM Business Partner Silvermoon Business Systems, a company that specializes in modular, service-oriented applications that rigorously follow the Insurance Application Architecture model.

The heart of the infrastructure is built on IBM MQ and IBM WebSphere Business Integration Server, which handle the interactions between Silvermoon’s modular, service-oriented application components. IBM Rational Rose® tools are used to develop new products, the infrastructure is run on IBM System xTM servers, and a storage area network based on IBM Data Storage is used to house the data. IBM Global Business Services also played a role, providing training to PPS.

In an industry as conservative and risk-averse as insurance, the willingness to undertake such a dramatic change was remarkable and unheard of in the local market. But the move paid off, and the results have been astonishing. In less than a year, PPS introduced nine new products into the marketplace, and they took their competitors by surprise in the process.

Not only has PPS been able to introduce new products at an unprecedented rate, but the modular nature of the infrastructure makes modifying those products very simple. “Our competition responded to one of our new product introductions with an offering of their own,” says Stephan Clark, Head of Business Applications, “but within a matter of only a few weeks we were able to modify our offering in reply. Our newfound agility has allowed us to catch our competitors completely off guard.”

The reinventing of business operations at PPS resulted in a number of benefits beyond the immediate goal of improving the company’s speed to market. An important advantage of adopting the IBM Insurance Application Architecture (IAA) is that it provides a comprehensive, validated structure for the entire business, which helps PPS comply with regulatory audits. As is the case in most of the world, the insurance industry in South Africa is very tightly regulated, and companies are routinely checked for compliance. By embracing IAA principles, PPS reduced its audit findings—items requiring remedial action—by 80%. The new applications are also producing improved business results, with significant improvements in controls for collecting premiums.

According to David Gnodde, Chief Operating Officer, it took considerable courage to let go of the past and use technology to innovate. “Doing what we’ve done—fully embracing a proven architecture and deploying a service-oriented architecture based on it—is in a sense straightforward, but in the context of this industry and this market, a fundamental change like we’ve made, amounts to a whole new way of doing business. Our competitors are so focused on the perceived value of their existing processes, systems and offerings that they’re unwilling to break free of them or even see that those legacy assets are in fact hampering them.”

PPS changed the game by focusing on the core of the business and thinking about how to make those core functions work better. As Gnodde said, “Our end-to-end implementation of IAA gave us that solid core, and we’ve been able to build on it and leap far ahead of the competition.”

Since its founding in 1941, Professional Provident Society (PPS) (link resides outside of ibm.com) has been the only mutual financial services company in South Africa to focus exclusively on graduate professionals. It provides tailor-made insurance, investment and healthcare solutions to its members, their families and associates, to create wealth, peace of mind and security during their working lives and in retirement.