North America’s second-largest life insurer is hoping to ease the integration of Maritime Life into its operations by applying some of the best practices gained through a pair of internal IT projects.

Manulife Financial, Canada’s No. 2 life insurer by assets, became a much bigger

player in the market following its $14.8-billion acquisition of John Hancock Financial Services in September of last year. Though primarily intended to boost Manulife’s presence in the U.S., the deal also included Maritime Life, a John Hancock subsidiary.

Consolidation in the life insurance industry has brought IT challenges to many well-known firms, but executives at Manulife believe they have paved the way for future growth by improving operations in its Canadian Pensions Operations division and enhancing the services it provides to agents and brokers.

Last year, for example, Manulife went into full production on a server migration project two years in the making. The project involved replacing an aging Sybase database and its accompanying Unix infrastructure with a system running Microsoft SQL Server 2000 on Intel machines. The database supports an internal system used by more than 4,000 pension plan managers and 300,000 members.

Bill Laskey, Manulife’s director of operations, said the company wanted to be more competitive and saw its IT infrastructure as a major cost-cutting target. The two Unix servers, for example, cost about $1 million each and using the database to handle month-end processing of various pension plans stretched to 22 hours.

Microsoft made the business case for its server software by running the Manulife processing application on an eight-way Compaq server, Laskey said.

Basically, it ran the same work in 22 hours, he said. “”So I’ve got a million-dollar machine in production, well-tuned, running 22 hours, and I’ve got this out-of-the-box, Microsoft SQL Server platform running at the same time. And I said, ‘I can make that one go faster.’””

Manulife installed the first piece of hardware in 2001 and went into full production last April. It has since reduced the month-end processing time from 22 hours to 10 and right now is running at less than six. “”(It’s the) same physical hardware and more business on the box,”” he said, adding the insurer will likely move up to Windows Server 2004 in the fall. “”We also looked at Oracle, but Oracle was expensive,”” he said. “”I’ve got a bit of background in working with Oracle, and sometimes they’re not the friendliest people to work with.””

The server migration is expected to save about $4 million over a five-year period, Laskey said, but it will also help with the Maritime Life integration.

“”They’re about 10 per cent of our size from the pension side,”” he said. “”They said, ‘Can you handle that workload?’ and I said, ‘Bring it on.’ They’ll just move right on to our platform.””

Manulife chose Microsoft Windows Server System to run Field Administration Support and Tracking (FASAT) from DSPA software, replacing a legacy mainframe to manage the way it compensates its producer channel.

Doug Powers, Manulife’s assistant VP of distribution systems, said the 30-year-old legacy system was originally designed for independent agent channels, but is now used to manage general agencies that have relationships with smaller assistant general agents and its own brokers.

It used to take six staff about five days to manually reverse-engineer the compensation payouts from the old system, Powers said, but the company is now delivering weekly, fully automated payouts. Manulife had FASAT running the managing general agent channel in about seven months. The same software has since been rolled out to the company’s national accounts channel. The John Hancock operations, including Maritime Life, is next.

Raj Joshi, insurance industry solutions executive with Microsoft Canada’s financial services group, said clients like Manulife can reap the same benefits from early projects as they acquire other firms.

“”If they can do it the first time in seven months, they can do subsequent scale-ups in a similar time frame,”” he said. “”They’ve figured out the process.””

Powers agreed Maritime Life shouldn’t be a huge challenge.

DSPA senior sales executive Don Campbell in Toronto said FASAT was designed to help two organizations act more like one.

“”From Manulife’s perspective, all the producers become just producers,”” he said. “”They’re not Maritime or Manulife.””

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