Major UK Insurance Group

Major UK Insurance Group Case Study

This major insurance services group completed a number of acquisitions between 2015 and 2019, to emerge as the UK’s largest long-term savings and retirement business, with $324 billion AuM and 13,000 customers. 

Recognizing the need to consolidate these acquisitions, and meet the operating cost ratios of their peers in the industry, the Group undertook a range of transformation projects.

One of these was the creation of a Data Office in the asset management arm of the business. In 2020, a data strategy began to evolve, which included a recognition and desire to focus on market data governance, control and cost optimization; in other words, they were spending too much, the market data spend was on an upward trajectory, and the newly formed office had no insight or control of the business’s consumption. They were also anxious to ensure they were not, inadvertently, in breach of any of their data vendor contracts.

Whilst contracting an external consultant to define the strategy, on his recommendation, they approached Kalaxis. A mutual  understanding soon developed between Kalaxis and the Head of Data Management, and a project was commissioned in the Spring of 2021.

The audit of the insurance group’s market data contracts established a fragmented set of contracts and services, especially with their primary data vendor, which represented an annual spend of $1.6m per year.

The results of the Rationalization Review were enlightening, and produced spectacular results. Amongst the recommendations were: (I) Optimising Historical requests, (II) Changing one product for a similar but less expensive one, (III) Avoiding minimum fees on some of the accounts. The one that delivered the largest impact was: (IV) Licensing a Credit Risk overnight file, in place of ad hoc requests that were being made from across the operational units.

The total identified savings were in excess of $914,000 per annum, representing a massive 56% of annual spend.

The Head of Data Management and Governance commented afterwards: “Kalaxis came highly recommended, and they didn’t disappoint. They were thorough and identified areas of savings we would never have identified if we had undertaken the work in-house. Furthermore, they completed the Review substantially quicker than we could have done, when you consider we only have a small market data team on board. It freed us up to focus on business facing work, which was invaluable. We already have plans to use Kalaxis on further assignments, including the market data governance aspects of the Data Office strategy.

Commenting on the assignment, Michael Walford-Grant, Commercial Director, Kalaxis said: “It’s very satisfying to undertake projects like this, demonstrating the value we can deliver based on the years of investment and on-going refinement in our Rationalization Review methodology. We fully expect many more assignments like this going forward, as financial institutions continue to tackle the on-going challenges of market data cost control.”