ISM EMPOWERS INSURANCE INDUSTRY WITH SAS^®

Rare is it to find an organization that shares the same objectives as Insurance Services Malaysia Berhad (ISM). Besides its emulated entity model, Insurance Services Organization (ISO), ISM acts as an information and services support center for its respective insurance community. 

ISM is a non-profit organization set with the vision of advancing the Malaysian insurance industry to a higher state of competitiveness, efficiency and stability. 

This is via the provisioning of information services to its members, which consist of the majority of insurance and Takaful (Islamic principals-based insurance business) operators in the country. 

“Our business is to provide actuarial, statistical, information technology, anti-fraud, and research and development (R&D) related services to the market,” explains Carl Rajendram, Chief Executive Officer of ISM. 

This is by developing and maintaining credible and secure database repositories that are periodically fed by a set of insurance claims and premium data submitted by all of ISM members and affiliates. 

To date, ISM databases consist of more than 100 million data records that reside on three main systems: ISM Knowledge Management Services (ISM-KMS), ISM Fraud Management Services (ISM-FMS), and the ISM Electronic Exchange System (ISM-EES). 

No doubt that the company’s greatest assets and value lie in its vast industry databases – which form the basis for the delivery of information services to support the business decisions of ISM members. 

While the efficient and timely delivery of this information services to its members is crucial, the competitive edge for the insurance operators is not gained by just accessing industry information, but rather in the ability to gain insight on that information which is then leveraged in an effective manner. 

The SAS factors
SAS Enterprise BI Server was chosen over other competing brands for three key factors. “We were impressed by the technological breath, depth and maturity of SAS solution for this niche vertical. This includes having practical tools for predictive modeling and risk scoring, intelligence to analyze operational trends, and a variety of insurance industry solutions that we can leverage immediately,” Rajendram says. 

Secondly, as ISM has been a SAS user since 2000, it already owns in-house SAS programming skill sets. Hence a solution upgrade naturally meant a shorter learning curve and implementation process for ISM. 

Finally, SAS’ strong local presence in Malaysia assured ISM of a software partner that also offered strong professional service and valuable local education capabilities. 

(from left to right): Shirley Tan, Data Support; Shyamala Devi, Data Support; Carl Rajendram, CEO; Safiah bt Jamil, Data Support

As the ISM knowledge-management services system is infused with SAS analytical capabilities and additional functionalities, the self-servicing experience (to information and intelligence) is enhanced for the users. 

Insurance companies can now design specific industry reports to benchmark and review their own business experience with that of the industry. The insights gained from these customized reports assist them to strategize for more competitive insurance product pricing.

“With SAS, we are giving our members a greater ‘power to know’ by increasing the relevance and value of the information that they can derive from the databases. This way, they can better strategize their business towards the most profitable product in their respective insurance profile,” says Rajendram. 

SAS directly supports ISM in driving the entire insurance industry to a higher level of competitiveness by equipping the market players with the essential insights to help prepare them for the imminent pricing liberalization environment. 

Strategic advantages
ISM has also improved its operational efficiencies by reducing its data management and reporting process that involved three different applications down to a single platform. “End-to-end information management has become much efficient, freeing up scarce resources for more advantageous business activities,” says Rajendram. 

One such activity is advocating the use of technology within the industry. “We are actually promoting greater levels of IT usage and expertise in the local insurance market via ISM online access to a rich share pool of insurance-related information,” he adds. 

The other significant strategic advantage from partnering with SAS is its proven expertise in BI solutions and deep domain knowledge in the core areas of insurance services. 

An example is how SAS is contributing to ISM’s setting up of a world-class fraud management and detection system by introducing the concept of fraud scoring that is based on specific data mining techniques. “By bringing in the best practices and methodologies used by other international markets, we believe SAS is capable of shortening the learning curve for the local insurance market in many ways,” Rajendram says. 

Narrowing the knowledge gap
As a Multimedia Super Corridor (MSC) status company in Malaysia, ISM makes conscious efforts to meet the government’s strategic objective of developing the MSC as a regional center for knowledge management and knowledge workers. 

However, employing and retaining quality human resources is a key challenge for ISM as it is not easy to bridge the knowledge gap between a young expert team and the legacy of the local insurance and Takaful industry. 

ISM intends to counter this challenge by storing the accumulation of insurance industry methodologies and local characteristics in its databases for easy reference. “Via our SAS-powered knowledge management portal, we are narrowing the knowledge gap between the new workforce and the legacy of industry best practices in order for this breed of knowledge workers to make good, informed decisions,” Rajendram says. 

Summary
Overall, SAS has boosted ISM’s knowledge management service to offer greater value to all of its corporate members and affiliates.

“ISM is convinced that SAS Enterprise BI Server is the answer to its current and future business intelligence requirements. We look forward to deliver speedy, consistent and accurate information that can help our members to them advance in their business,” concludes Rajendram.

ISM in brief

• ISM is a company limited by guarantee with 34 insurers and 7 Takaful operators as its members. Its members are all composite, general and Takaful companies in Malaysia and nine affiliates (i.e. four reinsurance and five life insurance companies).
• When ISM was conceptualized in 1998 by the General Insurance Association of Malaysia (PIAM) under the Malaysian Insurance Rating Organisation (MIRO) project, its key aim was to build the necessary databases to support the development of insurance pricing and reserving policies in a liberalized industry.
• Today, ISM is positioning itself as the premium insurance and Takaful shared services provider in the region. One of its key focuses is to develop unique expertise in the area of Takaful, aligning to the government’s aspiration to make Malaysia a center for Islamic Finance in the region.
• Since the commencement of its operations on 1 April 2005, ISM’s revenues are generated from a mix of membership and service-based fees.
• In November 2006, ISM became the first Malaysian entity to attain international information security standard ISO27001 certification for the entire operations of the company.

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