Less Pain, More Gain

CaseFile
The Problem: New system needed to accommodate new book of business.

THE COMPANY: Inviva
TOTAL REVENUE: $500 million
WEB SITE: www.inviva.com

THE SOLUTION: Payouts from Systems
Engineering Group, LLC
WEB SITE: www.segllc.com

Growing a business through acquisi- tion allows a company to make a big splash in the market, but sometimes that displacement of water reveals big problems underneath that need to be solved. Inviva found this out when it purchased the Conseco Variable Insurance Co. late last year. A block of that business was payments for single premium policies, and we didnt have a [policy management] system to accommodate those, says Chris Tosney, Invivas director of business solutions and operations.

Situations like this usually call for a quick resolution of the problem, and that was especially true in this case. Conseco is going through some pain right now, says Tosney. So the quicker we could get the business out of there, the more advantageous it was to us holding onto [the customer]. The pain Tosney is alluding to is the reorganization plan Conseco filed under Chapter 11 of the U.S. Bankruptcy Code, although the filing was not connected to Consecos insurance operations or the sale of the annuity business.

The policy administration system used at the time by Inviva could have been adapted to meet the timetable the insurer established for dealing with the fixed annuity products, but not the variable products, according to Tosney. He adds the old system was not as robust as what Systems Engineering Group (SEG) was able to offer with its Payouts product. The SEG system was for fixed and variable products, and our existing vendor was more geared to the fixed arena, he says. We needed both.

Tosney had met SEG representatives while at different conferences, and both sides kept in touch. We had them come in, we loved what they showed us, and they said they could meet our timeframe, he says. It was a quick decision, probably made within a month.

Inviva certainly didnt have much time. It closed the Conseco deal on Oct. 23, 2002, and set a Jan. 31 deadline for conversion of the fixed products and a Feb. 28 deadline for the variable products. [SEG] made both deadlines, and were very happy, says Tosney.

An extra benefit for Inviva with the SEG system was its ability to clean up some of the data provided by Conseco. SEGs business knowledge came in immensely [handy], says Tosney. It played a major role in getting this project done more cleanly. With any conversion, there is going to be pain, but Ive been through an awful lot of conversions over my career, and this one was a minor cut, if you will.

Payouts is an intuitive system, according to Tosney, and that has pleased the Inviva users. Weve caught several mistakes in the Conseco system that they should not have been paying out on particular policies, he says. The errors were caught as a result of the SEG system, so it is saving us some bucks there.

SEG suggested one improvement that has cut down on some of the errors, says Tosney. Inviva now runs the following days cycle of policies a day early on a less-than-production level to see whether there are any errors that are going to occur. This gives the company time to correct those errors. Weve had a few errors because of the conversion, he says. You know you are going to get some bad data. Were running into fewer errors now, though.

Technology is important for Inviva because it is one of the few carriers that customers can click on to buy either life insurance or an annuity over the Internet. Thats our niche in doing partnerships with other companies such as E*Trade and BISYS, says Tosney. Inviva was formed just three years ago, he notes, and the Conseco purchase was the second block of business acquired by the company. Were growing by leaps and bounds, and we rely heavily on technology for a competitive edge, he says.

Payouts is part of SEGs EDIT Solutions suite of products, and Inviva is so pleased with how things are working with Payouts that the carrier is going to examine the entire product line. There is a very strong chance we could go with a suite of SEGs products because of its past performance with us, says Tosney. We were that impressed.