Client NFU Mutual Challenge Meeting the UK government’s introduction of stakeholder pensions presented NFU Mutual with a major challenge. Stakeholder pensions are designed to offer a very simple, cost-effective scheme. But with annual charges of less than one per cent, it is low-margin business that demands efficiency if providers are to succeed. Solution Based on object-oriented technology, GraphTalk A.I.A carries out NFU Mutual’s policy administration for all pensions annuities and stakeholder pensions, ensuring that processes can be executed as quickly and efficiently as possible, and keeping administrative costs at a minimum. 3r Evolution manages NFU Mutual’s relationships with its annuity and stakeholder pension customers. Both GraphTalk A.I.A and 3r Evolution have been fully integrated with the existing workflow engine. Results Enhanced competitive position Systems integrated with workflow Ability to grow high-volume, low-margin business Ability to migrate other business on to more cost-effective system Redesigned enterprise operating model Skills transfer across various staff levels Strong staff buy-in for new systems For more information: To learn more about CSC's offerings, contact us.

Convergence, consolidation and growing competition are placing greater demands on the financial services industry. But technology is also playing a key part in determining which companies will stay one step ahead. Meeting the UK government’s introduction of stakeholder pensions has presented the latest challenge. Stakeholder pensions are designed to offer a very simple, cost-effective scheme. But with annual charges of less than one per cent, it is low-margin business that demands efficiency if providers are to succeed.

NFU Mutual has embraced the new pension scheme wholeheartedly. As one of the UK’s largest mutual insurers, NFU Mutual is committed to maintaining its position at the forefront of the market. It regards investment in its IT infrastructure as a cost-effective business enabler which enhances its reputation and its share of the pensions market. By optimising the efficiency of its operation, NFU Mutual can gain cost benefits which it can pass back to both existing and new customers.

In mid-1999, NFU Mutual was looking to grow into new markets and expand its range of customer contact channels. After evaluating a number of potential suppliers, it called on CSC’s expertise. As a leading provider in the insurance marketplace, CSC was a natural choice for NFU Mutual and together they forged a successful working relationship.

“The stakeholder pension was announced while we were evaluating our existing technology. We knew we had to make drastic changes to our core systems in order to provide a stakeholder pension solution that could support increased volumes without impacting customer service or increasing costs. We asked CSC to design a solution that would allow us to operate efficiently in what is a potentially massive market for us,” says William Schouten, General Manager of NFU Mutual’s Life Division.

Immovable Deadlines
Because the stakeholder pension brought with it an immovable deadline, CSC and NFU Mutual were faced with the challenge of designing and implementing an operating model within a rigid timeframe.

“We already had a development project in place to support stakeholder providers, based on GraphTalk® A.I.A, our insurance administration application,” says CSC Account Director, Andy Watts. “It was a question of threading NFU Mutual’s requirements into the process so that the system could meet their needs exactly.”

“We also had to ensure that the system we designed would be able to accommodate future requirements. Government legislation has already changed in Australia and Chile and, if we see the same in the UK, we need to be prepared. There were many factors to consider.”

CSC had already carried out an in-depth study of market trends across Europe. The findings were fed into a newly developed major employee benefits programme, which incorporated flexibility between individual and group processing and paypoint processing, catering for all sizes of infrastructure. A full alignment of business vision and technology was achieved.

The initial 8-week study was broken down into four stages: defining business vision and industry drivers, business objectives, critical success factors and developing associated projects. NFU Mutual and CSC worked closely to define and develop a business strategy, against which a number of measurable business objectives leading up to 2003 were identified.

True Partnership Approach
The programme to design the future enterprise operating model covered business processes, organisational change, systems design and an overall implementation plan. One of the ways that CSC and NFU Mutual worked closely together was to involve a cross section of staff from NFU Mutual in the design project, collaborating with the CSC development team responsible for building the generic functionality of the base system.

William Schouten says: “Because CSC included some of our team in the actual development of the project, a skills transfer was able to take place across all levels of our staff. This not only ensured that the new system met our specific requirements, but also facilitated NFU Mutual staff ’s buy-in to the new system. It was a true partnership approach built on high levels of openness, trust and collaboration.”

“The system that has been designed for NFU Mutual comprises two key components,” says Andy Watts. “GraphTalk A.I.A handles administration, while 3r Evolution™ is a customer interaction tool designed for complex multichannel distribution environments.”

Based on object-oriented technology, GraphTalk A.I.A carries out NFU Mutual’s policy administration for all pensions annuities and stakeholder pensions, ensuring that processes can be executed as quickly and efficiently as possible, and keeping administrative costs at a minimum. 3r Evolution manages NFU Mutual’s relationships with its annuity and stakeholder pension customers. Both GraphTalk A.I.A and 3r Evolution have been fully integrated with the existing workflow engine.

CSC has also played an important part in ensuring that NFU Mutual staff embrace the cultural change positively.

“It is recognised that when new technology is implemented, employee resistance to change can cause major problems which in some cases can lead to failure,” says Jim McLeman, NFU Mutual’s IT Manager. “CSC’s approach was to involve NFU Mutual users at every possible step, overcoming this problem by ensuring that people felt it was a jointly-owned project. User feedback also enabled us to develop an end product that fully met our requirements.”

Total Support Capabilities
While CSC’s products and technical expertise were a fundamental part of the successful implementation of the solution, its specialist market knowledge and understanding of NFU Mutual’s business as a whole also played a critical part. The project successfully demonstrates CSC’s total support capabilities across business expertise and systems integration.

With stakeholder pensions predicted to make up a significant proportion of the total life and pensions market, it is a key area for NFU Mutual to establish itself as a major player.

“Stakeholder pensions are a potentially important market for NFU Mutual,” says William Schouten. “CSC’s ability to design and implement this system in such challenging timescales will enable us to grow our business significantly.”

Andy Watts says: “While we have tailored this solution to meet NFU Mutual’s needs, the core product is designed to meet the generic requirements of all insurance companies. We have worked hard to develop a solution that helps companies to profit from the challenging stakeholder pension market as rapidly as possible, and thanks to the partnership with NFU Mutual we now have a great product.”