Bermudian-based Fortitude Re and IBM have entered into a $450 million, ten-year agreement to transform Fortitude Re’s life insurance policy servicing operations.

The transformation will be effected with the implementation of AI technology and other automation tools designed to deliver a best-in-class customer experience for policyholders and insurers, the companies said.

They said Fortitude Re selected IBM’s subsidiary, IBM Insurance Solutions Inc, to leverage IBM’s global capabilities to provide insurance third-party administration services on its behalf for more than four million policyholders.

IBM will design and manage a custom, streamlined solution for administering life and annuity insurance policies that will help Fortitude Re to bolster its third-party administration operations and further enhance its commitment to customer-centric service for policyholders and insurer clients, while helping to capture operational expense reductions.

The parties said Fortitude Re’s collaboration with IBM reinforces its commitment to providing policy administration services as a valuable option in its reinsurance offerings, underscoring Fortitude Re’s unique ability to provide holistic reinsurance solutions, inclusive of policy administration and related operational capabilities.

They said IBM will support Fortitude Re in delivering end-to-end process optimisation of their insurance customer service operations, providing flexibility and scalability to capitalise on new business growth opportunities with an open ecosystem approach. IBM Consulting will lead these efforts, which will include AI for automation, hybrid cloud and main-frame-as-a-service technology.

“Combining Fortitude Re’s deep industry expertise with IBM’s technology leadership will enable us to deliver effective and efficient administration solutions as part of our bespoke solution design for our life & annuity customers,” said Sean Coyle, Fortitude Re chief operating officer.

“By partnering with IBM, Fortitude Re will be able to leverage AI technology, automation, and the latest in advanced data analytics to help continue delivering a high-quality service experience for the millions of insurance customers we service, all while reducing operational risk, improving efficiencies, and increasing our analytic capabilities.”

Vijay Vijayasankar, managing partner, financial services, at IBM Consulting, said: “We are excited about our latest collaboration with Fortitude Re to provide third-party administration for insurance and annuity policies. The insurance industry continues to be an important focus for IBM with significant opportunity to apply our industry expertise and technologies to solve complex challenges facing insurers.

“We are committed to working hand-in-hand with Fortitude Re to enhance security and customer experience while also pursuing growth and efficiency.”