Keep track of what’s happening in one of the world's largest insurance communities. Sign up for our newsletter and get news, knowledge & inspiration.
Poor IT Consumes Pension Savings – Customers Pay
One of the hottest topics in the Danish business media today is cost-efficiency of pension companies and pension funds.
One of the hottest topics in the Danish business media today is cost-efficiency of pension companies and pension funds. “Poor IT consumes pension savings – customers pay”, writes Berlingske Business.
Usage of outdated non-standard IT systems doesn’t only aggravate operation and impediment processing efficiency but also sends up the cost dramatically. As reflected in the recent research carried out by advisory firm, Sejer og Svendsen, and published in a Danish newspaper, Berlingske Business, the operational cost in pension companies divided by the number of customers fluctuates from €45 to €400. The research reveals that the high cost is largely affected by outdated IT, and concludes that companies with good IT systems are better in keeping the cost down – for the benefit of their clients.
The reported high administrative cost with pension companies caused an immediate reaction from the Danish Financial Service Authority (Finanstilsynet) that expressed the intention to monitor Danish pension even closer to secure interests of the clients and ensure the best possible returns unaffected by companies’ administration cost.
These recent developments in the Danish pension market set a new priority for the companies to upgrade their IT system to a newer, cost-efficient and customer-centric solution. TIA is very optimistic about this trend as it directly supports the business case offered by TIA to the insurance companies since its establishment and throughout all years of operation. In the regulated business environment and under tough pressure for bringing the administrative cost down, TIA’s Life and Pension solution offers these concrete benefits:
- True standard solution – in contrast to heavily customized internally maintained legacy systems.
- Compliance – with regulations in the local market.
- Process-orientation – providing operational efficiency.
- Customer-centricity – giving a comprehensive overview of a customer’s portfolio including all insurance products from different lines of business providing opportunity for x/up sales.
- Simple and transparent product setup – supporting an emerging trend of opening pension products up and giving an insight into the product structure instead of having the customers make “blind choices”.
- Flexibility and configurability – re-use of pre-configured integration points to local authorities and financial institutions; possibility for expansion of functional capacity with a range of add-ons; leveraging benefits of SOA based architectural framework.
- Proven business model – with a wide range of implementation partners with different profiles (global leaders and local industry specialists) providing services at the right price through off- and near-shoring.
- Transparent pricing scheme – “pay per member per year”.
So, while pension companies speculate how to reduce TCO on their IT systems, TIA has the answer and the solution for bringing administrative cost down and keeping it low.
Further Reading (in Danish)