CONVERSION
Legacy Freedom

Adding a new administration system didnt make sense unless theold systems somehow could go away. Conversion technology made thatpossible.

Saddled with three different mainframe legacy systems toadminister its annuity division, MONY Life Insurance realized itneeded a new administration system that would make the insurer moreflexible and allow it to get to market faster with new products.E.P. Rogers, senior vice president and CIO of The MONY Group,recognized simply adding another administration system on top ofthe others would not solve the long-term needs of the division.

The fact there were three systems created one set ofcomplexities, and the fact they were all older platforms and not asflexible as we would like was another [problem], says Rogers.

MONY settled on an administration system, purchasing fromAdminServer the AdminLife&Annuity System. Rogers says thecompany was aware it could not go forward with four legacy systems,though. To make the economics work, we needed to get everything onone system, he says.

The idea of converting several hundred thousand policies off ofold legacy platforms onto something new was daunting, notes Rogers.After purchasing the administration system, MONY went looking forconversion technology, and Universal Conversion Technologies (UCT)was what it found. [UCT] had more than 25 years of experience inthe insurance industry, and it had developed a repeatable processand metrics that allow for accurate estimating, says Rogers.

The return on investment for the conversion piece of the projectappeared to indicate it would afford a quick payback, adds CarolMacaluso, vice president and CFO of the annuities division for MONYLife. The cost of doing the conversion, relative to the ongoingmaintenance savings, could generate a two-year payback, shesays.

The first step in the process was to get the new administrationsystem up and running. Its a rules-based engine, says Rogers. Thegood news is its extremely flexible, and you can define the rulesto be pretty much anything you want. The bad news is you arebuilding a lot of the base functionality from the ground up.
After the new system was set up, MONY began converting its firstproductflexible premium variable annuityto AdminServer using theUCT tools, including Data Conversion Engineer, Data Con-versionArchitect, and Data Analysis & Reporting Tool. It wentextremely well with relatively few problems, says Rogers. At theend of the day, we had a new system that was highly flexible,allowed us to get products to the market much faster, and allowedus to serve our customers better.

One conversion is complete, Macaluso says, and the secondconversion currently is under way. This is the big one for MONY, asit involves roughly half of the companys block of annuities.
From the IT perspective, the reduction in maintenance costs is animportant aspect of the deal, but there are other benefits, aswell. The complexity of the environment also is reduced, saysRogers. We are going to have all the policy data in one place. Inaddition, the company was able to take what Rogers called a cleansheet of paper approach toward process reengineering. We could lookat the ideal way of doing this work, he says. One example was thatone of our business processes used to be a manual effort that tookmore than 60 steps to complete. We put that functionality into thenew system, and its now a two-step process.

Macaluso is pleased the division was able to develop a newproduct it would not have been able to produce in the past. Whathas been a plus for the actuaries is theyre not constrained intheir product design by systems constraints, she says. We are ableto realize the benefit of the product design flexibilityimmediately. The big benefit in the back office is the encoding ofthe business rules that were in peoples heads, in documents, or inmanuals, and we put them into the system and let the system do thechecking and reviewing. Such freedom can be intoxicating, accordingto Macaluso. The biggest challenge we faced was the cultural changeassociated with a more flexible target system in terms ofcontrolling our own destiny, she says. People were used to beingcontrolled, so to speak, by systems constraints. ROBERT REGISHYLE

THE PROBLEM
Carrier needed to get all its data from three legacy systems intoone system.

THE COMPANY
The MONY Group
Assets Under Management: $55 billion

THE SOLUTION
Data Conversion Engineer, Data Conversion Architect, and DataAnalysis & Reporting Tool from Universal ConversionTechnologies
Web Site: www.uctcorp.com