Lockton Affinity reduces insurance program setup time
The insurance marketplace has become extremely competitive. If an insurance broker can’t respond to a potential client quickly enough with a competitive solution, the client will move on to the next broker who can. Trying to meet the individual needs of hundreds or thousands of similar businesses, by offering them each a tailored insurance program, while still producing a reasonable profit margin, further adds to the challenge.
Lockton Affinity, the affinity program management division of Lockton Companies, was started in 1987 to design insurance programs that meet the dynamic, specialized needs of affinity groups, franchises, professional organizations, and associations of all sizes. It focuses primarily on property and casualty lines, including general and professional liability, workers’ compensation, and property protection. Serving a diverse set of industries with custom-tailored products requires a significant amount of specialized industry knowledge and an agile business approach. “Regardless of the industry or the insurance products involved, if we’re unable to respond to a new opportunity quickly and competitively, we’re not going to be successful at winning a client’s trust or their business,” says Joseph Ziegler, Chief Operating Officer of Lockton Affinity.
To maintain a competitive edge while providing individualized, turnkey, web-based insurance programs for its diverse range of affinity group clients, the firm decided to look to the cloud to reduce its transaction and infrastructure costs. “Building software is very strategic for us. We don’t want to spend time on things that aren’t strategic for us, like managing servers and patching operating systems,” says Scott Martin, Chief Technology Officer and Senior Vice President of Lockton Affinity.
When they first started looking at cloud-based solutions in 2014, the Lockton Affinity IT staff had very little experience with cloud technologies. However, they did have a great deal of experience with Microsoft products. “We are a pretty practical organization; we do some research, look at alternatives, and then make a choice,” says Martin. “We didn’t want to spend years deciding which way to go, so we decided to test Microsoft Azure in a quick proof of concept. If it seemed promising, we would continue. If not, we would stop and try another solution.”
For the proof of concept (POC), the team chose its payment portal used by its affinity group members to pay invoices online. “We weren’t going to move that application from our existing production environment; we just chose it for the POC because our people knew that code base, so we could port it to Azure in a test environment and learn about the mechanics of using the cloud,” says Martin. “We needed to get experience in a situation where the code was familiar but the environment was new, so we could learn how to make it work before we tried to build anything from scratch on Azure.”
An internal group of developers and architects tested the POC, gaining a wealth of experience on how to work with Azure. “It was a good learning experience,” says Martin. “We stubbed our toe on some things, but that’s how you learn a game-changing technology like Azure.”
The POC was strictly for testing, so once Lockton Affinity developers and architects successfully proved its viability, they applied what they had learned to a new real-life project. They built a complete transaction insurance platform in Azure for a startup venture within the company where consumers could buy health insurance. It took just six months to create the portal, which was launched in time for healthcare open enrollment in November 2015. This venture proved successful and eventually Lockton Affinity spun that business off into a new organization.
Building a strong and agile foundation
After working through the POC, Lockton Affinity laid the groundwork for delivering better and faster property casualty solutions for both existing and new clients. “Our goal was to build an insurance platform on Azure so that we could stand up new ecommerce websites for our clients in four to six weeks compared to the four to six months it took before,” says Martin.
It took just five months to build the insurance platform before Lockton Affinity could start to create affinity program websites. “We built a service-enabled platform on Azure where the same set of services would be used for each program,” says Martin. Lockton planned to set up all new affinity insurance program websites on Azure and eventually move its existing program websites to Azure as well. In addition to consuming Azure compute services, the new Lockton Affinity platform also takes advantage of Azure Active Directory, Azure SQL Database, and Azure Web Apps.
Lockton Affinity relies on the Instec Policy platform to provide the technology backbone for many of its insurance capabilities, including the rating engine, policy issuance, and regulatory, statutory, and management reporting functionality. The fact that the Instec platform also runs on Azure makes that integration even easier. “The Instec Policy platform is very configurable, which allows us to quickly support many carriers and coverages,” says Martin. “Hosting it on Azure makes it easy for us to scale quickly to match our client needs. As we integrate with carriers, we’re able to exchange information with them in an encrypted way that doesn’t cause them any concern.”
Once it had a foundation built on Azure, Lockton Affinity started setting up its new cloud-based affinity insurance programs. First up was one for registered investment advisors, which launched in January 2017. That was followed about a month later by a program for an association of handyman contractors and another website for a handyman/consumer matching service. Clients can be either small enterprises or sole proprietors. “Building the program environment for each sponsoring group took a little bit of time to set up, but once we had it done, we could add a new affinity client in just a few weeks,” says Martin. “We create sponsor-specific content and branding to make each site look great and have a unique feel. Everything underneath, which powers the insurance transaction, is completely reusable so we can stand up new clients within each program very cost-effectively.”
Pushing the limits without a hitch
The websites for each of those first three groups had the potential of serving hundreds of members per month. Lockton Affinity then partnered with a large national association with a membership of about 5 million for the fourth site. Besides the huge potential volume of members, this site had some other unique requirements. “The association wanted to control the website experience completely,” says Martin. “To make that happen, we were able to expose our web services to the sponsor in a very secure way without a lot of extra effort. The association could then build its own member websites that call our web services for the insurance transactions. That would have been very difficult if we weren’t on Azure, because we would have had to navigate all the various perimeter controls that any large organization has. But in this case, both companies connected through Azure in a very secure way, and within a week our APIs were exchanging data.”
In the first three months after the fourth site was launched, the association sold more than 12,000 policies. An early test of the system’s scalability on Azure came when the association hosted a huge national convention, which drove a much-increased load to the site. “During the three-day event we were able to scale up in real time in Azure, by a factor of four, and then scale back when the conference was over,” says Martin. “The increased demand had literally no performance impact on the site. We did a lot of scale testing beforehand, pushing the platform to 3,000 transactions an hour, which is more than some programs sell in a year. But that gave us the ability to see where we needed to adjust so that we could scale up proactively.”
Covering all the bases with less effort
Security was another critical issue for Lockton Affinity and its clients. “As a small shop, we get industrial-level security from Azure that we would find very difficult to provide on our own,” says Martin. “Azure is already hardened for denial-of-service and man-in-the-middle type attacks. We also love the security dashboard, where we can see the status of all servers and get alerts if a server isn’t properly configured for a security feature.”
Above all, Martin sees Azure as freeing his staff from all the tedious, costly, and non-strategic chores associated with maintaining and managing hardware. Azure eliminates the need for server patching, swapping out faulty hard drives, and dealing with hardware lifecycle limitations. “Even if you’re using virtualization in your shop, you have to deal with all the aspects of standing up hardware, including hardware compatibility and availability issues, patching, driver maintenance, and so on. With Azure, we don’t have to deal with any of that. We can stand up any kind of technology we need to serve the business requirement without having to spend a lot of time jumping through hoops. If I need a server, I click a mouse button. If I need a WebJob to process something, I click a button.”
What this means to the business side of things is increased opportunities and reduced costs. “With Azure, we can get to more things faster, which gives us more opportunities to grow our business,” says Ziegler.
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