M o d e r n i z a t i o n o f N T U C I n c o m e CASE STUDY

M o d e r n i z a t i o n o f N T U C I n c o m e CASE STUDY

N TUC Income (“Income”), one of

Singapore’s largest insurers, has over 1.8

million policy holders with total assets of

S$21.3 billion. The insurer employs about

3,400 insurance advisors and 1,200 office staff, with

the majority located across an eight-branch network.

On June 1, 2003, Income succeeded in the migra-

tion of its legacy insurance systems to a digital web-

based system. The Herculean task required not only

the upgrading of hardware and applications, it also

required Income to streamline its decade-old busi-

ness processes and IT practices.

Until a few years ago, Income’s insurance pro-

cesses were very tedious and paper-based. The entire

insurance process started with customers meeting

an agent, filling in forms and submitting documents.

The agent would then submit the forms at branches,

from where they were sent by couriers to the Office

Services department. The collection schedule could

introduce delays of two to three days. Office Services

would log documents, sort them, and then send

them to departments for underwriting. Proposals

were allocated to underwriting staff, mostly at

random. Accepted proposals were sent for print-

ing at the Computer Services department and then

redistributed. For storage, all original documents

were packed and sent to warehouses where, over

two to three days, a total of seven staff would log and

store the documents. In all, paper policies compris-

ing 45 million documents were stored in over 16,000

cartons at three warehouses. Whenever a document

needed to be retrieved, it would take about two days

to locate and ship it by courier. Refiling would again

take about two days.

In 2002, despite periodic investments to upgrade

the HP 3000 mainframe that hosted the core insur-

ance applications as well as the accounting and

management information systems, it still frequently

broke down. When a system breakdown did occur,

work had to be stopped while data was restored.

Additionally, the HP 3000 backup system could only

restore the data to the version from the previous day.

This meant that backups had to be performed at the

end of every day in a costly and tedious process, or

the company would risk losing important data. In

one of the hardware crashes, it took several months

to recover the lost data. In all, the HP 3000 system

experienced a total of three major hardware failures,

resulting in a total of six days of complete downtime.

That was not enough. The COBOL programs that

were developed in the early 1980s and maintained by

Income’s in-house IT team also broke multiple times,

halted the systems, and caused temporary interrup-

tions. In addition, the IT team found developing new

products in COBOL to be quite cumbersome and the

time taken to launch new products ranged from a

few weeks to months.

At the same time, transaction processing for

policy underwriting was still a batch process and

information was not available to agents and advisors

in real-time. As a result, when staff processed a new

customer application for motor insurance, they did

not know if the applicant was an existing customer

of Income, which led to the loss of opportunities for

cross-product sales, as staff had to pass physical doc-

uments between each other and there was no means

of viewing an up-to-date report on a customer’s his-

tory on demand. Furthermore, compatibility issues

between the HP 3000 and employees’ notebooks

caused ongoing problems, especially with a rise in

telecommuting.

All this changed in June 2003, when Income

switched to the Java based eBao LifeSystem from

eBao Technology. The software comprised three sub-

systems – Policy Administration, Sales Management

and Supplementary Resources — and fulfilled many

of the company’s requirements, from customer-

orientated design to barcode technology capabili-

ties, and the ability to support changes in business

processes.

Implementation work started in September 2002

and the project was completed in nine months. By

May 2003, all the customization, data migration of

Income’s individual and group life insurance busi-

nesses and training were completed.

The new system was immediately operational

on a high-availability platform. All applications

resided on two or more servers, each connected by

two or more communication lines, all of which were

“load balanced.” This robust architecture minimized

downtime occurrence due to hardware or operating

system failures.

As part of eBao implementation, Income decided

to replace its entire IT infrastructure with a more

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robust, scalable architecture. For example, all servic-

ing branches were equipped with scanners; moni-

tors were changed to 20 inches; PC RAM size was

upgraded to 128 MB; and new hardware and soft-

ware for application servers, database servers, web

servers, and disk storage systems were installed.

Furthermore, the LAN cables were replaced with

faster cables, a fiber-optic backbone, and wireless

capability.

In addition, Income also revamped its business

continuity and disaster-recovery plans. A real-time

hot backup disaster-recovery center was imple-

mented, where the machines were always running

and fully operational. Data was transmitted immedi-

ately on the fly from the primary datacenter to the

backup machines’ data storage. In the event of the

datacenter site becoming unavailable, the operations

could be switched quickly to the disasterrecovery

site without the need to rely on restoration of previ-

ous day data.

Moving to a paperless environment, however,

was not easy. Income had to throw away all paper

records, including legal paper documents. Under the

new system, all documents were scanned and stored

on “trusted” storage devices – secured, reliable digital

vaults that enabled strict compliance with stringent

statutory requirements. Income had to train employ-

ees who had been accustomed to working with paper

to use the eBao system and change the way they

worked.

As a result of adopting eBao Life System, about

500 office staff and 3,400 insurance advisors could

access the system anytime, anywhere. Staff members

who would telecommute enjoyed faster access to

information, almost as fast as those who accessed the

information in the office.

This allowed Income to view a summary of each

customer over different products and business areas.

As a result, cross-selling became easier, and cus-

tomer service could be improved. Simplified work-

flows cut policy processing time and cost by half,

and greatly reduced the time required to design and

launch new products from months to days.

Additionally, the systems allowed for online sup-

port of customers, agents and brokers.

Sources: Melanie Liew, Computerworld, July 2004; “NTUC

Income of Singapore Successfully Implemented eBaoTech

Lifesystem,” ebaotech.com, accessed November 2008; Neerja

Sethi & D G Allampallai, “NTUC Income of Singapore (A):

Re-architecting Legacy Systems,” asiacase.com, October 2005.

CASE STUDY QUESTIONS

1. What were the problems faced by Income in this

case? How were the problems resolved by the new

digital system?

2. What types of information systems and business

processes were used by Income before migrating

to the fully digital system?

3. Describe the Information systems and IT infra-

structure at Income after migrating to the fully

digital system?

4. What benefits did Income reap from the new sys-

tem?

5. How well is Income prepared for the future? Are

the problems described in the case likely to be

repeated?

Case contributed by Neerja Sethi and Vijay Sethi,

Nanyang Technological University.

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