The quandary for newly merged insurance company IAG is that the company effectively taken over, NZI, is said to have the more stable and broader-ranging IT systems.
The other party, the former NRMA business, trading in New Zealand as State Insurance, is still in the midst of a total re-engineering of its IT and business processes, known as Project Endeavour. The reputed $34 million project was flagged by the company to complete “phase one”, “but the gossip says it might be as late as the middle of next year”, says an industry source who does not wish to be named.
The IT side of Endeavour is centred on a UK-sourced application called Sirius, from a company of the same name. This requires major modification to fit the New Zealand market. But CIO Catherine Rusby said in September at a recent industry event that any new functionality needed would be developed by Sirius.
Following the merger announcement, however, Rusby declined to comment on the way forward, saying the companies are just in the process of establishing an integration team.
State/NRMA specialises in the consumer side of the insurance market, while NZI extends into the commercial market. This suggests strongly that some components of NZI’s Polisy applications suite will have to be incorporated into the post-merger IT system.
“It’s a choice of pouring more money into Sirius or looking at what Polisy has to offer,” says the industry source, and the most likely outcome will be a combination of both. “I can’t see why Catherine Rusby couldn’t have told the media that.”
A risk-averse company, which would include most sizeable companies are in the current economic climate, would lean even more towards the adoption of a stable system, like Polisy, as against one still under development, the source suggests.
The NZI side of the operation is staying as quiet as the former NRMA. Operations manager David Fletcher says it is not his expertise and passes the query to business capability director John Williams. Williams, like Rusby, says he cannot comment because the deal has not yet been finalised.