MIP has enjoyed rapid takeup of its life assurance administration software market since its launch two years ago; in that time, the software has grown to represent 15% of its total revenues, and that figure is growing rapidly.
The software company entered the life assurance market after establishing itself in medical aid administration and pension fund administration.
"We did not port the other systems into the life assurance arena; although the focus here is also administration, there are fundamental differences," says Don Elliott, sales director at MIP. "Life assurance offers complex products based on different marketing philosophies and broker networks, and a major issue the industry faces is bringing new products to market quickly."
MIP developed a life assurance administration system from scratch. "Basil Reekie from QED Actuaries and Consultants consulted up-front as part of our philosophy to develop a product from an acturial spreadsheet with minimal programming to bring new life assurance products to market as quickly as possible," says Elliott.
Within 18 months MIP had a product ready for market. "Standard life assurance administration software would result in six- to eight-month product development cycles," says Elliottt, "while ours can do it in six weeks through some ingenious back-end programming."
The product is also based on the traditional MIP billing model, a shared risk model closely resembling the ASP market. It requires little capital outlay, particularly useful to smaller businesses, and is calculated per member per month. The fee covers the software licence, development, maintenance and support, and any new developments.
Elliott signed Alfinanz, its first client, within weeks of launching the product. The company is noteworthy as the first financial services administration factory in the country running all administration products, from individual and group life insurance to retirement benefits, healthcare and investments. The organisation`s primary client in South Africa is Channel Life, which has shown tremendous year on year growth in earnings.
Another client is m Cubed Holdings. "Their products are linked and run across life, employee benefits and unit trusts, and we have integrated the three into a single administration system so they can enhance their customer service," says Elliott. The business offers a range of employee benefit products complemented by risk-adjusted investment solutions as well as customised financial solutions and lending and treasury services. The m Cubed Holdings group has more than R43 billion in assets under management and over R60 billion in third-party assets under management.
"The secret to our success is that the product we developed is flexible and simple enough at an affordable price to handle a range of customers, from large to small, and we can use it to administer really complex investment products handling the intricacies and complexities of the product, or simpler, less complicated insurance products," says Elliott.
Other MIP clients include Safrican, which administers 1.7 million funeral policies across 3 500 member groups, SA Quantum Insurance, Futurum Financial Group, GoServ and Motorite Insurance Administrators.
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