Insurance Australia Group Limited (IAG) is the largest general insurance company in Australia and New Zealand. The Group’s businesses underwrite almost $12 billion of premium per annum, selling insurance under many leading brands. Poncho Insurance was developed in 2019 by IAG Satellite to help Australians
protect against the unexpected with an easier, simpler, and more flexible car insurance product. IAG Satellite was formed to serve fast-growing customer segments for IAG, both through an existing portfolio of brands and by creating a new accelerator model to fast-track scaled-up innovation.
Providing quality insurance requires strong teamwork, flexibility, and innovation from all partners and vendors. Most importantly, it requires the right technology to help foster customer-insurer relationships and simplify the insurance-buying experience. When IAG, Australia’s largest general insurer, decided that it was time to update and transform IAG Satellite’s business strategy, the company selected Socotra as the new model’s core technology platform.
IAG created IAG Satellite to drive profitable growth and fast-track innovative, customer centric insurance products. As an end-to-end business, IAG Satellite uses data and research to help customers make the best decisions for their insurance needs, putting customer experiences at the center of product design. To improve profitability, the next step was to accelerate IAG Satellite’s insurance model to meet the needs of the modern consumer—the updated concept was appropriately named the “Accelerator” model.
IAG Satellite began searching for a powerful insurance technology partner to build out the Accelerator model. The company conducted proofs of concepts across four core system platforms in two-week sprints to determine the best fit. The field was then narrowed down to two vendors to conduct a more thorough eight-week POC. Socotra’s agile platform with open APIs and easy configurability, made quick work of adjusting and deploying complex changes.
IAG Satellite decided to partner with Socotra and several other SaaS companies including, Salesforce, Mulesoft, and Earnix, to create a foundation for the Accelerator model. Socotra handled the underwriting, billing, platform security, and policy management while integrating with IAG Satellite’s other partners.
The new model’s SaaS-based, cloud-native technology and robust API layer support a plug-and-play architecture that can integrate with multiple policy and claims management systems. Because it’s configurable, the Accelerator model can take advantage of new data sources and services as the needs of IAG Satellite evolve.
Using a legacy core system, launching a new platform would have taken two years. But with Socotra, IAG Satellite was able to launch a new digital-first product, Poncho Insurance, in just ten months. In October 2019, Poncho Insurance was introduced as a digital auto insurance platform that offers a monthly policy and payment plan with no cancellation fees. Similar to a monthly subscription, Poncho Insurance now gives customers a simple and flexible insurance service for their changing needs. Policyholders can quickly update or cancel their coverage, on their own, through a user-friendly online interface.
IAG Satellite releases updates through a model of release sprints (two-week blocks of development, testing, and deployment) to improve Poncho Insurance’s product configuration and digital experience. Socotra’s open APIs are easy to understand and integrate into any code, making complex and frequent release changes like product alterations and self-service processes simple.
With Socotra, it’s no longer a struggle to create a repeatable, deployable platform that conforms to modern development practices. Since the product went live, the Poncho Insurance development team has made over 300 updates, which include a visual product disclosure statement (PDS) and online support for numerous endorsements.
IAG Satellite recently received the Celent 2020 Model Insurer award for Innovation Execution, the most prestigious recognition an insurer can receive. The accolade is reflective of IAG Satellite’s dedication to disrupting traditional insurance practices by delivering valuable, direct-to-consumer products through powerful insurance technology.
Looking forward, the Accelerator model will likely extend into various features and functions in the Australian insurance market. Later in 2020, IAG Satellite plans to expand Poncho Insurance to additional lines of business. Socotra is proud to have contributed to Poncho Insurance’s success and to IAG Satellite’s innovative insurance model that is bound to set industry standards.
• IAG won the Innovation Execution award—the most prestigious recognition an insurer can receive—at the 2020 Celent Model Insurer awards.
• IAG achieved improved profitability of portfolio by over $70 million and a 30-point reduction in loss ratio over 18 months.*
• IAG earned a 25-point improvement in customer NPS.*
• Socotra helped launch the modern Poncho Insurance brand and product in only ten months.
• Socotra’s platform is built for fast deployment. IAG Satellite reports that it can now make and deploy product changes in just minutes, instead of days or weeks.
• Socotra’s open, documented APIs allowed for easy integration with other partners in IAG Satellite’s Accelerator model.
• While traditional core platforms required an implementation team from the vendor of 15–20 people, Socotra needed only one or two.
• Socotra’s configurability made it easy to create a repeatable, deployable platform that conforms to modern development practices. Since the product went live, the Poncho Insurance development team has made over 300 updates.
