Life insurer Covision did not have to outlay capital expenditure for an administration system capable of handling in excess of 10 000 policies when it launched in 2007.
Instead the insurer has paid a monthly premium for the actual number of policies under administration because it runs on MIP’s Life administration system that operates under the provisions of a risk-based billing model.
“There is no up-front capital outlay for MIP's life administration systems and no hidden billing. Instead, we share the client’s risk while helping them to grow their business, and the predictable IT spend commensurate with the success of the business allows the client to drive off the economies of scale and not invest vast capital sums in technology at one of the most crucial points in the life of a business – the first three to five years,” says Naas Jordaan, divisional manager: MIP Personal Finance.
Gerhard Maree, deputy CEO of Covision Life, says: “As a veteran of many systems development projects in my life, I was particularly impressed with the ‘share the risk’ approach, the adaptability to change, the structured and easy-to-follow code and logic developed, and the willingness to do whatever it takes to ensure a successful project.”
Covision’s life administration business grew from a small, but highly successful funeral parlour business started by CEO Oupa Leboea in the Free State.
The business started with a select product offering, but has since grown to penetrate crucial market segments subsequently identified. It investigated a number of options for IT administration systems and chose MIP due to its risk-based billing model and the software-as-a-service (SaaS) architecture which meant that it could rapidly go to market.
“We customised the system for them as part of the standard fee and Covision has since launched a number of successful new products such as Prozpa,” says Jordaan.
MIP Life is an end-to-end solution that manages all administration, from new business through to claims. It also administers wealth management, assisting clients to obtain the best returns on their investments, and to resourcefully manage market and regulatory changes. It uses an advanced, rules-based, object-oriented architecture to ensure user-friendliness, openness, comprehensiveness and flexibility. It supports traditional life insurance products, including whole life, term, credit life and unit-linked or universal life policies. By using multi-tier, relational database management system technology, MIP Life provides a platform that facilitates fast and easy deployment, performance evaluation and management information.
Covision offers standard life insurance and a range of niche products that include funeral, commuter, travelling nurse and provisional cover as well as other value-added products. One of the insurer’s differentiators is using new technology to drive low-cost life insurance, with the ability to sell policies over the phone and perform medical underwriting online; issuing policies up to R2-million within 15 to 20 minutes without paperwork. The business offers up to R10-million cover with money-back guarantees and provisional cover up to three months, among others.
It gains the flexibility to do so on the back of MIP Life.
“Many clients, ranging from small to medium and very large, run MIP Life and Covision benefited from our experience deploying, customising, developing and operating the system at all of them while keeping it up to date and in line with changed regulations in the local market,” says Jordaan. “All of that is included in the fee based on the number of policies under administration so clients like Covision have a stable fiscal environment.”
Covision’s expansion has been rapid and significant for its market. Growth has occurred due to a number of reasons, one of which is the range of new products.
“When Covision brought its new products to market, such as Prozpa, the business had to ensure that it could deliver the personalised service for which it is known in the industry,” says Jordaan. “In order to do so they had to employ and train additional call centre operators to handle the increased volume of inquiries and sales. The fact that the business did not have to invest capital in technology systems up-front, and the fact that it could quickly scale the system by simply adding or upgrading hardware configurations, meant that not only was it possible to rapidly acquire additional employees, but it could more rapidly design and deliver new products to its market.
Covision can consider current business needs and meet them without having to look into a crystal ball and invest in infrastructure that may or may not be used in the near or distant future.”
Jordaan says MIP Life’s scalability is due in part to the technology on which it is designed.
“We use the same system to run businesses of 10 000 policies up to 1,6-million policies,” he says. “The software-as-a-service architecture also means that clients enjoy the full gamut of services to go with it, from maintenance to upgrades and new developments, and we don’t simply drop it in and then leave them to their own devices.”