With a sudden divestment by NAB and snap acquisition by Japanese insurance giant Nippon Life, MLC Life Insurance was faced with an immediate – and potentially existential – question: what to do with the impending shutdown of their digital operations platform – the backbone of the insurer’s entire business?
 

After nearly two decades joined at the hip of one of Australia’s largest financial institutions, MLC Life remained wholly dependent on NAB’s digital infrastructure, fused in a ‘Gordian knot’ with the bank’s digital systems and data. Worse still, Nippon could offer no alternative.

“Our business was operating on NAB platforms in one beautiful big bowl of spaghetti,” declared David Hackett, MLC Life Insurance chief executive, speaking at the FST Insurance Summit in Sydney last week. “Nippon Life didn’t have a platform to bring us onto and NAB didn’t have a platform to give to Nippon Life,” Hackett said.  

“We’ve got this massive book of risk and we’ve been building it up for a long time. It takes a lot of capital support and sitting along lots of different systems, because of all the acquisitions and all the corporate history that we’ve had.”

“We essentially had two choices: to replicate what we had at NAB or build a new one.” For Hackett, newly appointed as chief executive just a few months into the re-platforming project and faced with the prospect of transplanting 132 years of legacy since the company’s founding, there was really only one option.

Hackett’s challenge was thus set: to build a modern, integrated operations platform from the ground-up. Simple enough.

As it turns out, they were the first insurer to ever attempt such a feat.

So spawned the $400 million re-platforming and technology transformation project, among which included one the world’s first fully integrated and comprehensive operations platforms developed by a life insurer. This extensive re-platforming also included the much-vaunted LifeView suite launched last year – a “comprehensive and integrated experience” for superannuation fund trustees, their administrators and members.”

In both ambition and scale, the platform is immense. “This is really one of corporate Australia’s largest technology transformations,” Hackett boasted.

Hackett, rather understatedly, listed the “few elements” that comprise the “comprehensive” digital suite, including customer and adviser relationship management tools, policy administration, claims management, reinsurance and actuarial capabilities, risk compliance, inbound communications management, outbound communications management, general accounting procurement, treasury and investment management, reporting and analytics, tax management, forward management, workplace laptops phones management, service management instrumentation and control, human capital management, travel management, records management, security, ICT infrastructure, networking, integration, engineering, internet, intranet and data centres – “all of which talks to each other,” he said. 

Yet it was not the immense content nor capability of the platform that most impressed Hackett, but rather that it offered “a completely clean slate” for MLC Life to re-fashion its digital operations and build out its technology capability.

“We’re going to have one of the only mature life insurance platforms on the planet that is completely legacy-free,” he said.

Indeed, while competitors are busy dipping their toes into newfangled technologies, including blockchain and AI, the re-platforming project embraces a simple no-frills development philosophy – for Hackett, it is all about hygiene.

“We’re really just building hygiene – modern hygiene. In the end, we’ll be able to put cool stuff into the system, including machine learning, AI, voice recognition – we can weave all this on what we’re building now; but, for now, we’re really just building the basics.

“Our aim [with this project] has always been to be more agile, faster to market, build a better customer experience, drive inner cost out of the product, and to steal market share off you [our competitors].”

Conceived and nurtured in-house

Despite the enormous pressure on MLC chiefs to finance the project and delineate ROI for shareholders, Hackett was adamant the only way to deliver such an immense project was “to do it yourself.”

Taking direct reins on a project of this scale meant keeping things local. To do so, MLC executives created a new “services orchestrator” role – sitting directly above the systems integrators – to ensure the project, and its significant corps of developers, could be effectively coordinated in-house.

“We’ve had to hire hundreds of people, many of them contractors – it’s a massive team and that’s deliberate,” Hackett said.

Two years in, with potentially two more years to go, and despite doubling the project’s original estimated budget, Hackett believes the re-platforming project has already paid dividends for Nippon and MLC Life.

“We’re now live in production in a fully integrated fashion for group new business and we have two group schemes on the new platform, so we’ve just got to get the rest over now – that’ll take another 18 months or so.”

“For last 14 months, we’ve had our best claims outcomes ever as measured by ‘return to health, return to work’ rates,” Hackett said. “Sixty per cent of our claims staff are our upheld professionals, and we’re very focused on rehabilitation and return to health and supporting our customers. That’s been a great success and that comes through in our financials too.”

What is more, MLC’s new underwriting platform is delivering 50 per cent straight through acceptance of claims, up from just seven per cent before the re-platforming.

While stripping 20 years of NAB legacy and data remains an ongoing challenge for the insurer, Hackett said they will continue their existing approach of utilising local production to build out the platform.

“What’s dawning on us now – and I mean after the terror of these last two years – is that we’re getting ourselves out and in control is how really great this is going to be.

“We’re going to have one of the only mature life insurance platforms on the planet that is completely legacy free. You can imagine how powerful that’s going to be.”