Insurers Abandon Legacy Systems for SAP and Service-Oriented Architecture

LEIPZIG, Germany, June 10 /PRNewswire-FirstCall/ -- SAP AG (NYSE: SAP) today announced growing adoption among insurance companies of SAP's approach to service-oriented architecture (SOA). SAP customers, including The ATP Group, CLAL Insurance, Offentliche and Winterthur Group, are gaining operational efficiencies, faster time-to-market and improved customer service by running SAP software along with the business-driven blueprint of service-oriented architecture. The announcement was made at the SAP International Forum for Insurance, SAP's conference to address the challenges insurers face today, being held in Leipzig, Germany, June 10-11.

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Once struggling with aging information technology (IT) systems unable to keep pace with evolving customers demands, changing processes, and heated competition from traditional and non-traditional players entering the market, insurers around the world are now embracing business software from SAP built on SOA. By detaching the essential building blocks from what traditionally has been "hard-wired" software, an SOA strategy enables companies to reuse pieces of functionality, coupling them with other applications to flexibly compose new or differentiating business processes.

SOA: Supporting Insurers' Many Business Challenges

Israel's leading insurance, pension and finance group, CLAL Insurance Company, faces the same challenges other insurers have in the industry. Unique to CLAL Insurance, however, is the need to comply with the rigorous government supervision of insurance companies in Israel that require insurers to closely monitor their claims.

"With SOA from SAP, CLAL now has higher flexibility and development speed to meet the business requirements and easier maintenance of streamlined processes," said Ruslan Torgovetsky, SAP Claims Management Implementation Manager, CLAL Insurance. "Our goal with SOA is that, where possible, every interface will be implemented as a web service."

As companies retire their outdated systems, many are finding ways to extend the value of in-house software developments and investments in legacy applications. With the SAP NetWeaver(R) technology platform, insurers can reuse data and functionality in their existing legacy systems.

For example, the ATP Group was selected to carry out Denmark's government-issued maternity leave program, which covers 100 percent of Danish workers not covered under a private maternity leave program -- approximately 800,000 people. With six months to meet this government requirement, ATP decided that the organization needed to automate and streamline its administrative processes to comply with the mandate.

"We had been building applications from scratch," said Marianne Aarslev-Jensen, chief project manager, ATP. "But we are transitioning out of a mainframe environment and wanted a standard application that we could deploy quickly, without much customization."

Based on the SAP NetWeaver technology platform, ATP decided to support its maternity leave administration processes with the SAP(R) Insurance Collections and Disbursement and the SAP(R) Claims Management applications. Because the SAP applications have web services built-in, ATP was live in six months. With SAP applications, ATP can handle the maternity leave program for 800,000 employees with only six caseworkers. In addition, ATP now provides employers an external web portal where they can take advantage of self-service options.

To maintain its competitive edge, the leading insurance company in Switzerland, Winterthur Group, knew it had to revamp its IT infrastructure.

"We were facing challenges resulting from our heterogeneous, sometimes outdated systems, and the fact that structures and responsibilities were decentralized and not standardized," said Rolf Bischofberger, IT program director, Winterthur Group. "SOA with SAP is a real business process enabler. It allows us to implement new processes, new ways of collecting information and new ways of monitoring processes, ensuring optimum quality, control and transparency."

With changing expectations among consumers, the insurance industry itself also faced changes. Offentliche, an insurer particularly focused on its customers, knew they needed a better IT infrastructure to support new demands, as well as flexibly and quickly adapt to future changes.

"To please our customers and stay competitive, we looked into our business and realized that our current operations were too manual and inefficient," said Dennis Lidzba, managing director IT, Offentliche Insurance (Versicherung Braunschweig). "With service-oriented architecture from SAP, our operations are integrated across the organization. Our new infrastructure also enabled us to build streamlined connections with our third-party partners."

With SAP software, the insurer has efficient integrated solutions with the realized benefits of the reduction of frauds, claims payments and administrative costs through out-tasked claims handling.

SAP's Commitment to the Insurance Industry

With the myriad of new possibilities that using SAP software on this business-driven IT architecture provides, insurers are abandoning legacy systems and automating diverse core processes that were once performed manually. SAP software is helping growing numbers of insurance companies streamline and unify their IT systems and business processes in order to improve operational efficiencies, reduce costs and better manage transaction volumes and large claims. By reusing or combining the functions of SAP applications, new processes can be added more flexibly and quickly to suit the specific demands of companies' service lines, business networks and customers.

"In offering integrated solutions that serve as flexible business process platforms for insurance IT, SAP marks another milestone in its long-standing commitment to insurance carriers worldwide," said Leo Schneider, senior vice president, IBU Insurance, SAP AG. "With SAP solutions, insurers are able to build their platforms on a stable core of enterprise management solutions as well as insurance-specific applications."

About SAP(R) for Insurance

SAP(R) for Insurance is an industry-tailored set of solutions designed to help insurance companies control costs and seize new opportunities while strengthening customer loyalty with applications that can be implemented in stages according to the company's strategic business goals, priorities and available resources. Serving approximately 560 customers in 60 countries, SAP for Insurance seamlessly links core insurance processes with customer-facing functions and back-office operations-from first customer contact through policy and product management, collections, disbursement, and claims management. (Additional information at http://www.sap.com/insurance/)

About SAP

SAP is the world's leading provider of business software(*), offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 47,800 customers (excludes customers from the acquisition of Business Objects) in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol "SAP." (For more information, visit http://www.sap.com)

       (*) SAP defines business software as comprising enterprise resource          planning and related applications. 

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