BA Insurance Systems, better known as BAIS, still has curiosity and problem-solving in its DNA. And a touch of serendipity

By Miranda Maxwell

In 1993 the Nobel Peace Prize was awarded to Nelson Mandela, Nirvana’s “Smells Like Teen Spirit” was up for a Grammy, and chartered accountant Jim Armstrong was at the start of a journey that would culminate in leading insurance platform iBAIS 2.0.

Today, the iBAIS system handles $3.5 billion in premium, processing 1.4 million transactions a year for a million policies. It supports organisations across Australia, New Zealand, PNG, Singapore, Indonesia, Philippines, Thailand and Mauritius.

Mr Armstrong, who remains a director, began his “very interesting ride” when he was convinced by a friend in the early 1990s to help create the Broker’s Advantage system to support Lowndes Lambert Group. He later purchased the system, and the broker remained its major client until it was taken over by Marsh.

“Thirty years ago they bought some code and they didn’t really know what they had,” says Sydney-based BAIS Chief Executive David Hampton. “They had one customer and, brick by brick, just acquired new customers. It’s just like most things in life, he just stumbled on it and had a crack.”

Mr Hampton, who was formerly the chief executive of strata underwriting agency CHU, has held many senior corporate roles, working offshore for two decades in India, Japan, Hong Kong and Malaysia. He took over the top role at BAIS in September 2020.

“The joke is that Jim handed over to a much younger man,” Mr Hampton tells Insurance News. “He even ordered the milk and watered the plants, and now he’s playing a lot of golf. I’m very pleased he’s been able to take a step back to reflect on where he took the company.”

Sydney-based Mr Hampton, a “business guy, not a tech guy,” says the outlook for technology in insurance is robust, and emphasises the industry has complex needs.

“We’re bullish on it,” he tells Insurance News. “We’re a little bit more confident than we were a few years ago.

“General insurance is not easy. I think it’s one of the most complex financial services. It needs systems with a strong backbone that are robust and handle heavy data with ease.”

While Mr Hampton describes himself as a “former bean counter,” he also believes that at its core, insurance is still primarily about trust accounting. But competitors are sometimes reluctant to acknowledge it, and rival developers tout apps as ideal for underwriting agencies without ticking that fundamental box.

He says some competitors don’t invest in their technology and have “built things that just don’t work”, adding Australia has a “knowledge deficiency where technology and insurance intersect from the customer side, and from some of the vendors as well”.

Insurance is a contract that’s been around for 300 years, he says, and the fundamentals don’t change.

“You mention the word bordereau, and they look at you and say, ‘What’s that?’. [For the uninitiated, bordereau translated from the French means a slip of paper – in insurance it’s used to describe a detailed list of insurance losses].

“It’s a detailed report your underwriter wants to see every day – you can’t just send out a rubbish bordereau; it has to be subject to the debits equalling the credits.

“An app can make some heroic assumptions, but at the end of the day the sum insured X the rate equals the premium. There’s a precise algorithm. I haven’t seen anything clever in artificial intelligence that underwrites things very well.

“A lot of money is just burned, a lot spent in the last few years. We’ve had customers who left us and then want to come back again, because iBAIS works.

“We do reinsurance, we can do offshore – multiple states, situations, insurance, currencies and languages. We can bundle it all together and it all works at the back end, [including] withholding taxes and currencies.”

After a celebratory barbecue to kick things off, the 30th anniversary theme of “thirty and thriving” is being honoured year-long by the BAIS team of around 35.

When it launched in 2006, the flagship iBAIS platform was the first fully browser-based insurance system in the world, and after years of incremental updates, iBAIS 2.0 was launched at the end of 2021. It supports brokers, underwriting agencies (“our sweet spot, that’s a growth area for us”) and insurers, all the way from quote and bind solutions to secure back-office admin and accounting.

“Having the technology and the data and being able to extract it in a meaningful way is pretty important. The devil’s in the detail with general insurance.”

The cloud-based insurance system is built using the advanced DesignBAIS, and utilises the Rocket database and Pick Operating System, a robust and stable “sort of bulletproof technology” favoured by banks and governments.

More than $40 million has been invested, with an upgrade going through to the platform every few days. Mr Hampton says an “agile and committed attitude” has helped BAIS stay the course over the decades.

He says the company often agrees to work on projects others “baulk at. It is in our DNA to be curious about problems and building solutions, even if it isn’t easy.” As a result BAIS has developed some unique niches, including dominating the PNG general insurance software market.

“Serendipity is the word you’d use. Look where other people don’t look. Sometimes you can find opportunities.”

BAIS also maintains data integrity for clients by never deleting a transaction, which helps with long-tail liability claims.

“Per policy, you’ve got quite a big buttress of data accumulated over a long period of time. People sometimes overlook the importance of keeping the record.”

Insurance has become significantly more data-intensive, Mr Hampton says, with the tariff book of the 1960s and its government guides for premiums long gone.

“So the data set is expanding quite rapidly. That’s good for underwriting because you can be more precise and selective, as long as you’re getting good quality data in. If it’s just a lazy keyboard entry, or there’s no edit controls you can get things terribly wrong.

“Having the technology and the data and being able to extract it in a meaningful way is pretty important. The devil’s in the detail with general insurance.”

BAIS generally offers a fixed-price delivery model on projects, and Mr Hampton says the company was so busy late last year that it had to put new business on hold. Now, he says, the company is ready to follow through again on its mantra that “there is always a better and smarter way to do things”.

“We’ve opened up the gates again and our client base continues to increase,” Mr Hampton said. “We’re still here, we’re growing, we’re investing in the system. We can’t wait to see how things will develop over the next 30 years.”