Fresh question marks have been raised over the IT strategy of Zurich Financial Services in the UK after further delays and u-turns on a major project at the insurance giant.
A new claims system, which was supposed to have been implemented by the end of last year and deliver more than £60m a year in cost savings, has yet to be implemented. Zurich said an announcement about the implementation of the project will be made within days.
However, Computer Weekly has discovered that the project has been scaled back significantly, diluting its likely benefits. It represents the latest in series of troubled IT projects at the insurance company that Computer Weekly has uncovered over the past 18 months.
The new claims system, from specialist supplier New Planet Solutions, was originally intended for use by the whole of Zurich UK's general business. However, Computer Weekly has learned that Zurich's commercial business does not plan to use the new system and is in discussions with other suppliers.
The main justification for developing and rolling out a new claims system was that it would be a single platform for claims processing used by the various insurance businesses, such as Eagle Star Direct, that comprise Zurich Financial Services in the UK.
A common platform for processing claims across Zurich's businesses would give it greater flexibility when handling claims by linking all offices and staff to the same system. It would also help Zurich meet surges in demand for certain policies, for instance flood claims, by sharing out the workload of processing claims across its businesses.
Union leaders warned that a failure to use a common platform across the business could hamper Zurich's efforts to squeeze further cost savings out of its operation in response to demands from its Swiss headquarters.
Last year Zurich UK axed more than 1,000 jobs, including 70 IT staff in its Zurich Life and Region business.
"[If the new claims system is not fully implemented] I think we have a serious problem," said Alan Wood, general secretary at the Union of Finance Staff.
"The company is under severe pressure from its superiors in Switzerland to make massive savings in 2003. The implementation of the new claims system platform would allow it to make instant savings and must be an important part of the drive to cut costs."
Zurich refused to comment on whether the new claims system would be used by the whole of the business. "The reasons why we begun our new claims project still stand today," a spokeswoman said. "[It is] to ensure that we operate as efficiently and effectively as we can for all out customers and partners."
Zurich's IT troubles
December 2001: a proposed outsourcing deal with IBM, estimated to be worth £400m, collapses at the 11th hour. Nearly 200 IT staff are laid off in the next few months
2002: new claims systems misses key January deadline for its roll-out in two offices
2002: new system for Zurich Insurance Building Guarantee's business deferred indefinitely after work had begun
2002: abrupt departure of Zurich's CIO Ian Marshall. Staff attack "cronyism" of broker system set up by Marshall.