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Chapter 2 Global E-business and Collaboration 105

Modernization of NTUC Income

CASE STUDY

N TUC Income (“Income”), one of experienced a total of three major hardware failures,

Singapore’s largest insurers, has over 1.8
resulting in a total of six days of complete downtime.
million policy holders with total assets of
That was not enough. The COBOL programs that
S$21.3 billion. The insurer employs about were developed in the early 1980s and maintained by
3,400 insurance advisors and 1,200 office staff, with Income’s in-house IT team also broke multiple times,
the majority located across an eight-branch network. halted the systems, and caused temporary interrup-
On June 1, 2003, Income succeeded in the migra- tions. In addition, the IT team found developing new
tion of its legacy insurance systems to a digital web- products in COBOL to be quite cumbersome and the
based system. The Herculean task required not only time taken to launch new products ranged from a
the upgrading of hardware and applications, it also few weeks to months.
required Income to streamline its decade-old busi- At the same time, transaction processing for
ness processes and IT practices. policy underwriting was still a batch process and
Until a few years ago, Income’s insurance pro- information was not available to agents and advisors
cesses were very tedious and paper-based. The entire in real-time. As a result, when staff processed a new
insurance process started with customers meeting customer application for motor insurance, they did
an agent, filling in forms and submitting documents. not know if the applicant was an existing customer
The agent would then submit the forms at branches, of Income, which led to the loss of opportunities for
from where they were sent by couriers to the Office cross-product sales, as staff had to pass physical doc-
Services department. The collection schedule could uments between each other and there was no means
introduce delays of two to three days. Office Services of viewing an up-to-date report on a customer’s his-
would log documents, sort them, and then send tory on demand. Furthermore, compatibility issues
them to departments for underwriting. Proposals between the HP 3000 and employees’ notebooks
were allocated to underwriting staff, mostly at caused ongoing problems, especially with a rise in
random. Accepted proposals were sent for print- telecommuting.
ing at the Computer Services department and then All this changed in June 2003, when Income
redistributed. For storage, all original documents switched to the Java based eBao LifeSystem from
were packed and sent to warehouses where, over eBao Technology. The software comprised three sub-
two to three days, a total of seven staff would log and systems - Policy Administration, Sales Management
store the documents. In all, paper policies compris- and Supplementary Resources — and fulfilled many
ing 45 million documents were stored in over 16,000 of the company’s requirements, from customer-
cartons at three warehouses. Whenever a document orientated design to barcode technology capabili-
needed to be retrieved, it would take about two days ties, and the ability to support changes in business
to locate and ship it by courier. Refiling would again processes.
take about two days. Implementation work started in September 2002
In 2002, despite periodic investments to upgrade and the project was completed in nine months. By
the HP 3000 mainframe that hosted the core insur- May 2003, all the customization, data migration of
ance applications as well as the accounting and Income’s individual and group life insurance busi-
management information systems, it still frequently nesses and training were completed.
broke down. When a system breakdown did occur, The new system was immediately operational
work had to be stopped while data was restored. on a high-availability platform. All applications
Additionally, the HP 3000 backup system could only resided on two or more servers, each connected by
restore the data to the version from the previous day. two or more communication lines, all of which were
This meant that backups had to be performed at the “load balanced.” This robust architecture minimized
end of every day in a costly and tedious process, or downtime occurrence due to hardware or operating
the company would risk losing important data. In system failures.
one of the hardware crashes, it took several months As part of eBao implementation, Income decided
to recover the lost data. In all, the HP 3000 system to replace its entire IT infrastructure with a more

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