A large UK life insurer moves to the Cloud for Lower Costs and Sky-high Performance
With headquarters in the U.K., our client is one of the world’s largest insurance and investment management companies, and one of the U.K.'s major providers of individual life protection policies and group protection. The company as a whole is highly focused on efficiency, relying on its digital capabilities to underwrite more than 80 percent of applications at the point of sale.
For more than 20 years, they have relied on FIS’ Prophet solutions to meet the actuarial modeling requirements of its life insurance business. Most recently the firm has been running our enterprise risk management application from a third party’s data centre, which housed all of the supporting hardware and infrastructure. The data centre, however, was now reaching the end of its life – and in its place, they were keen to implement a more flexible and agile compute environment to support increasingly sophisticated models, but at a lower total cost of ownership.
Analysis showed that, on average over the year, they used less than 15 percent of its data centre’s maximum capacity, with peaks in usage for month-end and, especially, year-end calculations. With so much downtime in between, the firm needed an environment that could scale up and down to requirements throughout the business cycle - making a managed cloud service an ideal and innovative solution.
As well as a highly scalable environment for actuarial modeling, the client was looking for better service to support it. With one party providing the hardware and another the software, it had previously taken time to identify the source of – and responsibility for – any operational issues. This was a key reason for the firm’s decision to deploy FIS’ own cloud-based managed service: a single technology solution for both infrastructure and application, governed by one contract and set of service level agreements (SLAs).
FIS proposed to run Prophet Enterprise, plus elements of the client's own actuarial control framework, through the Prophet Managed Cloud Service (PMCS). This instance, run in partnership with Amazon Web Services (AWS), which provides the flexible IT stack, PMCS provides firms with a private network within a public cloud, configured, optimized and managed by FIS as a one-stop service for Prophet clients. For ultimate scalability, clients only pay for what they use - never “wasting” capacity.
To demonstrate the efficiency and effectiveness of its cloud service, FIS ran a proof of concept (POC) that migrated a cross-section of the models to the PMCS environment and tested them within it. Thanks to the healthy levels of performance shown from the start, the POC was brought to an end earlier than expected – proving the business case for full implementation. Not only was the POC judged a success, but the configurations built for it could be re-used in production.
Before full implementation, FIS worked closely with the client to make sure that PMCS met all of the firm’s compliance requirements, including personal data protection, service level agreements, environment security and policy compliance.
Managed by FIS, the switch from the third-party data centre to PMCS happened smoothly, in two planned phases within just three months – providing a powerful new environment for the most sophisticated actuarial modeling.
To keep on top of changing modeling requirements, FIS carries out regular reviews of its clients’ usage and the infrastructure at their disposal under PMCS – and modifies the environment accordingly. What’s more, the resulting changes take only hours not weeks.
Since implementation, the client has increased its potential capacity from over one thousand to nearly five thousand cores to support new stochastic calculations and the adoption of new data management solutions. In parallel it has decreased its cost of ownership. To date, in fact, PMCS has helped them realize cost savings of nearly 50 percent, as the firm only pays for the capacity it needs at any one time, with no capital outlay. Further savings are anticipated as the business users adapt to the new “pay as you go” way of working.
- Support more sophisticated actuarial models
- Eliminate wasted hardware capacity
- Lower total cost of ownership for actuarial modeling technology
- Modeling hardware, software and control framework provided and managed as a single service
- Operating costs versus capital expenditure – pay for usage not ownership
- Regular reviews of models and, if necessary, rapid changes to infrastructure
- Cost savings of 40 to 50 percent