Business Challenge
RAC Insurance saw an immediate need for upgrading its manual, spreadsheet-based financial planning and analytics processes with a more comprehensive, integrated and automated solution.
Transformation
Working with Cornerstone Performance Management, RAC Insurance leveraged the power of Cornerstone’s extensive expertise and IBM® Planning Analytics platform capabilities to build a robust financial performance management solution within six months and at scale.
“IBM Planning Analytics on Cloud helps us build flexible plans for both the immediate and the longer-term future, and to prepare for any contingency.”
Business Benefits Accelerates reporting
Unlocks new scenario planning and predictive modelling capabilities. 20% estimated increase in productivity by reducing budgeting work for the finance team. Improved accountability and decision-making, and enhanced reach to wider audience. Fewer redundancies Enhanced data quality. Boosts transparency and collaboration.
About RAC Insurance
RAC Insurance is the insurance arm of RAC WA, the Royal Automobile Club of Western Australia (RAC), a member-based organisation that serves over a million members with car, home, and travel insurance and related services. RAC also has a strong focus on sustainability, safety, advocacy and community engagement, reinvesting its profits to serve its members and stakeholders, as well as the wider Western Australian community
Focusing on Building
RAC Insurance is a trusted home and auto insurance provider for more than half of Western Australian households. Over a million members scattered across the vast state depend on RAC’s products and services. This is why focusing on the community and its people has been important to them.
Western Australia comprises a third of the total area of Australia – the same size as Alaska, Texas, and California combined – and is the second largest state in the world. Members, who require insurance and roadside assistance, are either located in or travel through remote corners. It takes a specialist to deliver results here.
Alex Houvardas, Chief Financial Officer for RAC Insurance, explains: “If your car breaks down in the outback, it could be hours or days before someone finds you. In some cases, it can literally be a matter of life and death. At RAC, we see it as our responsibility not only to provide first-class products and services, but also to invest in road safety and other important mobility initiatives that benefit both our members and the wider Western Australian community.
A large proportion of the funding for these initiatives comes from RAC’s insurance subsidiary – RAC Insurance. Run as a member based organisation, the company shares a deep commitment with its vibrant community and all its profits are reinvested in improving community programs and member services.
“As the only major insurer based in Western Australia, we’re one of the most trusted brands in the state, and we have seen strong growth over the past three years in a very competitive market. But we’re never content to rest on our laurels. We need to make our systems and processes as resilient and efficient as possible, to ensure that we can continue supporting our members and the community.”
Financial planning and analytics were a key area identified for improvement. Previously RAC Insurance’s main budgeting and forecasting processes had depended on a complex process involving more than a hundred linked spreadsheets, and a manual approach to data analysis.
“We wanted to reduce the amount of time and effort our actuarial team spent on budgeting and forecasting, while also making the process more transparent so that the rest of the business could participate. If we could automate parts of the process, we would be able to unlock much more powerful capabilities, such as rolling forecasts, scenario modelling, stress-testing, and predictive modelling.”
Laying the Cornerstone
The need to upgrade from a manual, spread-sheet based approach was compelling for RAC Insurance. The team created a strong business case for investing in a solution that would be powerful enough to handle every aspect of financial planning and analytics, from profit and loss statements and balance sheets to cash flow and capital calculations.
Within the limited solutions on offer RAC Insurance was looking at very specific criteria. “We looked at eight different products, and assessed them not only on technical grounds, but also on the availability of implementation partners with insurance experience. Perth is the most isolated major city on earth, and the other major insurers are based in either Sydney or Brisbane, which is a five-hour flight away, so local resources and expertise are scarce.”
Following a thorough evaluation, RAC Insurance chose Cornerstone, to deliver the IBM Planning Analytics solution on Cloud as its new platform.
“Cornerstone had a good track record of implementing financial planning and analytics solutions for insurance companies, and we were very confident in IBM Planning Analytics…” Alex Houvardas, CFO RAC Insurance.
“It was one of the few solutions we saw that could handle everything we wanted to do, and most of our finance team had worked with similar products like IBM Cognos® TM1® in the past.”
RAC Insurance made the right decision in choosing Cornerstone. Cornerstone’s extensive expertise and tool capabilities brought immense value to the project. Through strategic insight and creative foresight, the project was executed seamlessly. The ambitious multimodule, complex implementation required both deep planning analytics skills as well as an understanding of client processes. The intention was to bring 14 different Planning Analytics modules online in a single project. To raise the stakes even further, it would be the company’s first ever major cloud project, and one of the first deployments of the cloud version of the software in Australia.
The implementation style was unique, commencing with a collaborative design workshop that involved all stakeholders, an iterative build approach that ensured a robust build and close consultation with partners and stakeholders. Cornerstone leveraged onsite and remote models, choosing to work with experts within (or as close to) RAC’s time-zone in WA. The result was product delivered within six months which was exceptional as it was two months earlier than the original eight months’ timeline.
“Given the tight timeframe, we utilised onshore and offshore resources to ensure we could hit the project’s milestones. Not many organisations tackle a fully integrated P&L, balance sheet and cashflow solution in a single phase, but we knew we could meet RAC’s deadline and deliver an elegant solution by utilising Cornerstone’s Planning Insurance Blueprint. ”– Piers Wilson, Managing Director of Cornerstone Performance Management
“Cornerstone and IBM did an excellent job in delivering and supporting our project.” Alex Houvardas, CFO of RAC Insurance.
The Big Picture
Now that the project IBM Planning Analytics on Cloud is online, RAC Insurance has a single, comprehensive, and integrated platform for financial planning and analytics covering all its major business domains. From premiums and claims to expenses, cash flow, capital and operational expenditure and remuneration.
“Getting such a comprehensive solution online within just six months is a remarkable achievement. Planning Analytics on Cloud unlocks so many new possibilities for our finance team, from rolling forecasts to scenario modelling. We have barely scratched the surface of what we can achieve. ” States Alex Houvardas.
The first budget with the new solution is now underway, and RAC Insurance expects to see a significant reduction in the amount of time and effort its actuarial team needs to spend on the process – resulting in an estimated 20 percent boost to productivity.
“The solution should help us free up two or three of our actuaries, so they can focus on their core role instead of crunching numbers for the budget. Moving away from the spreadsheets is also going to save us countless hours on reporting and integration, as well as eliminating the huge risk of manual error. It also helps us avoid over-dependence on key people by spreading the knowledge and capability.”
“More importantly, though, the process itself is also much more transparent and collaborative. Each department will have much more input into their budgets, and we can drill down to the product level to calculate return on capital and other key business metrics. That’s really what this project is about: giving the business more insight and greater accountability in their decision-making”
Taking a big-picture view, the solution puts RAC Insurance in a strong position to identify, analyse, and overcome whatever challenges the future may hold.
“Whatever business you are in, disruption is always on the agenda. Planning Analytics on Cloud helps us build flexible plans for both the immediate and the longer-term future and analyse different scenarios to prepare for any contingency. By keeping our business healthy and competitive, we can continue to fund the vital community projects and advocacy that keep people safe on Western Australia’s roads.” Alex Houvardas concludes.
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