Lumera was founded on the insight that Life and Pensions is not like any other industry when it comes to change. It is uniquely obligated to its past. Pension policies were underwritten decades ago and lifelong disbursements need to be administrated in a cost-effective and future-proof way, while respecting regulatory safeguards that minimize risk for all involved parties. The Prudent Revolution is Lumera’s roadmap for enabling change, or more specifically, digital transformation, given all these complexities.
We believe that the Life and Pensions industry needs a new transformation model, where digital transformation and innovation accommodate the past instead of disrupting it, a transformation that’s pragmatic, accountable and grounded in decades of experience and domain expertise. Enter the Prudent Revolution.
Lumera helps our customers continuously transform traditional business models, legacy product portfolios and policies, by migrating to a modern platform designed for digital customer interactions and cost-efficient administration, one that is also easy to adapt to further change.
The cornerstone of the Prudent Revolution is a unified policy administration environment capable of supporting both the traditional integrated value chain and new, digital-driven business models. The single-platform approach and the ability to retire legacy applications while maintaining their functionality is vital, as any initiative for digitalization and modernization would otherwise just add to IT complexity and costs.
Critical drivers for business transformation
The European life insurance industry is undergoing a massive transformation – automating processes and reducing dependency on critical personal skills, while adapting operations for compliance with new legislation.
The fundamental forces driving business transformation in the insurance industry are the same as for the rest of society. Suppliers are replacing product-centric offerings with customer-centric subscription services.
On top of the broad digitalization trends, there are also industry-specific and regional drivers for transformation in Life and Pensions, and for moving away from multiple bespoke systems. Such trends include:
- Decreasing replacement rates for national pension throughout the Nordics and Europe. This is met by an increased focus on the role of occupational pension and incentivized private pension savings programs. In addition, this has accelerated the systematic shift from defined benefit products to more resilient premium-based defined contribution pension schemes.
- Cost pressure. In many regions, service provider fees for occupational pensions have been reduced, driven by continuous collective procurements.
- Demand for digital. Occupational pension plans provided by tied agents in personal meetings are replaced with digital offerings that are easy to customize during meetings, using digital payroll upload, and acceptance with digital signatures. Incumbent occupational pension providers relying on the traditional distribution model will have cost issues and face usability challenges from benefit managers expecting “Netflix experience”.
- Pension reforms empowering the individual freedom. To give an example, in Norway the EPK reform was implemented in February 2021, empowering 1.5 million private sector employees to choose their asset manager for their aggregated pension. Pension liabilities for NOK 360 billion are now on the table and increased competitive pressure will accelerate migration from legacy systems to more flexible and cost-effective policy administration solutions.
The Prudent Revolution in action – powered by Lumera
For more than a decade, Lumera has helped customers migrate legacy policy management systems, with a 100% success rate that sets us apart in the industry. We propel insurers in their transformation from multiple, and many times siloed, systems to a unified, scalable platform capable of supporting the entire enterprise in a future-proof and cost-efficient way. Lumera has a unique industry track record of enabling this.
In 2020, despite the Covid-19 pandemic and the limitations of remote work, we continued assisting our customers to consolidate on the Lumera platform, helping them migrate over 650,000 policies.
Since 2008, Lumera has performed over 50 migration projects across a wide variety of life insurance and pension product types. The total number of policies managed using Lumera’s platform is now over 12 million. Four Lumera implementations cover more than one million policies each.
These figures reveal that transformational programs involving migration from legacy systems are not isolated events, but indicators of an industry trend. They also testify to our customers having trust in Lumera’s experienced staff and proven migration capabilities.
Putting it in another way, the Prudent Revolution is happening now. And it’s powered by Lumera.