By taking a service-oriented architecture (SOA) approach to its IT, Aviva appears to be well on its way to achieving its goal of at least halving the number of its legacy systems.
The insurance giant has so far switched off around 45 percent (650) of its legacy systems, which total approximately 1,450 across its UK General Insurance (GI) and Life divisions.
Aviva has been working on a cost-cutting simplification project in the UK, which involved the outsourcing of 500 IT roles to third-party suppliers, since September 2006. This started just over a year before the global ‘One Aviva’ cost-cutting plan was launched.
The figure officially quoted by Aviva in its annual results is a reduction of 300 of 550 legacy systems in its Life (savings and investments) business.
However, Ian Butterworth, Aviva’s UK technology director, told Computerworld UK that a similar number has also been turned off in the company’s GI business, and he hopes to consolidate even further.
“Aviva GI had about 900 applications, and out of that about 350 have been turned off,” he said.
“There are plans to push that down further. For both businesses, we would hope to reduce the legacy estate by at least half. The aim is to get more responsive, and to work faster.”
As well as continuing the consolidation, the company is looking at how to get the most value from its remaining IT. This is where SOA and automation software from IBM called WebSphere come into play.
SOA refers to a software design approach were systems are composed of various and sometimes shared “services”. The aim is better interoperability and the ability to save time and money through the reuse of code.
“We’ve been pursuing a SOA approach that allows us to extract the nuggets from the legacy platform that are most valuable. This can be as simple as looking up a postcode, or retrieving policy details for the customer,” Butterworth said.
“If you then combine that with IBM WebSphere, which handles the electronic interaction from the portal through to the back end, it automates the processes.”
Despite the system consolidation, Butterworth insisted that the “size of the army hasn’t changed”, thanks to a commitment to retraining IT employees. Currently around 2,500 IT staff are employed at the company across the UK.
“We’ve been releasing people from legacy systems and retraining them in modern tools,” he said.
However, it is no secret that a large chunk of of Aviva’s IT and processes have been offshored. In May 2009, only 46 percent of the UK life operations were run in-house, compared to 98 percent in 2005, with 18 percent of businesses processes offshored to WNS and 36 percent of policy processing outsourced to insurers including Swiss Re and Scottish Friendly.
Migrating the policies to Swiss Re’s IT platform in 2007, enabled Norwich Union Life to decommission 220 of its 550 product systems.
More recently, the company has been working on a range of IT projects from developing Apple iPhone apps to digitising its documents.
Insurance companies traditionally rely heavily on paper, which Aviva is trying to move away from by putting more of its documents in an electronic format.
Butterworth wants to do this “as far and as fast” as possible, with many documents going online this year.
“In the latest development for the Life business, about 70 percent of what advisors want to do can be done electronically,” said Butterworth. “There’s stuff that you can never do online, but quite a lot of what advisors do routinely is online now, for example looking for quotations and valuations.”
Meanwhile, Aviva last year released a number of iPhone apps, including one called MyClaims that enables customers to record claims information directly from their phone.
Using the app, the phone’s GPS can register where an incident takes place, and users can take a photo of the incident and capture witness statements from their handset.
“It speeds up the process of capturing claims information. We’ve been quite pleased with that,” said Butterworth.
Another successful app, available for the iPhone and Android, is RAC’s traffic app, from Aviva’s motoring division. The app highlights areas of congestion on a Google Map, and according to Butterworth has had around three-quarters of a million downloads since it was launched in January last year.
While Aviva has been keeping on top of mobile trends, it is yet to make headway in social media – though Butterworth said the company was looking into it.
“Clearly it [social media] does engage people. It is an interesting avenue,” he said.
“We need to think about how our customers going forward would prefer to transact business with us, and how do we accommodate that.”