Case Study

Digital Transformation and IT Modernization

The National Flood Insurance Program (NFIP), managed by the Department of Homeland Security (DHS) Federal Emergency Management Agency (FEMA), works cooperatively with Write Your Own (WYO) commercial Property and Casualty (P&C) insurance companies to provide flood insurance to homeowners, businesses, and renters across the United States. The NFIP was created to reduce the financial burden of flood-related damage and encourage communities to take measures to prevent flooding.

The WYO insurance companies are partnered with FEMA to offer and sell flood insurance policies under their own brand names (e.g., Prudential, USAA, etc.) and are authorized by FEMA to write flood insurance policies, process claims, and manage customer relationships on behalf of the NFIP. By 2012, the NFIP had endured multiple failed system modernization attempts and needed to replace its over 30-year-old mainframe-based systems. In 2016, FEMA initiated the NFIP Pivot System Agile modernization effort to transform the NFIP’s technology, enhance flood risk assessments, and streamline policy and claims processing. Given the vast array of public and private stakeholders and the sheer size of the program (the program processes billions of dollars in premiums and claims each year) and a lack of thorough documentation associated with the mainframe processes and data validations, the modernization initiative was a multi-year effort that culminated in Program winning “DHS Program of the Year” in 2020 for replacing the legacy system and achieving Full Operating Capability (FOC).

Key Challenges

Legacy Mainframe-based Technology (that lacked adaptability  and visibility)
Outdated and Inaccurate Policy and Claims Data
Inefficient Claim Processing and Delayed Payouts for Policyholders
Data Silos with Limited Ability to Analyze Comprehensive Flood Insurance Information
A Changing Flood Risk Landscape

Our Approach

To support the replacement of a 30+ year old mainframe-based system along with implementing major program reforms, Wilco Group supported the NFIP Pivot modernization effort for 8 years, working closely with WYO insurance companies and FEMA stakeholders. Our engagement included:

Stakeholder Engagement & Requirement Documentation: We met with WYO insurance companies, agents, and adjusters, documenting all technical and operational requirements.
Compliance and Systems Engineering Life Cycle (SELC) Support: We created SELC documents, ensured compliance with DHS SELC gates, and facilitated GAO oversight.
Product Roadmap Development: We developed long-term roadmaps for the Pivot system, ensuring a phased, strategic modernization approach.
Implementation and Testing Strategies: Wilco Group helped define testing strategies to validate system functionality and ensure seamless integration with insurance providers.
Agile Development Support: Our team worked alongside Agile development teams to drive iterative improvements and maintain alignment with FEMA’s evolving needs.
Performance Tracking and Optimization: We established key performance indicators (KPIs) to measure the success of the modernization effort and improve system efficiency.

Results

Faster Claims Processing: The Pivot system has significantly reduced the time required to process and pay out claims. Policyholders are now receiving payments faster, especially following major flood events.
Improved Accuracy: By incorporating advanced risk modeling and integrating real-time data, the new system allows for more accurate flood risk assessments and more appropriately priced policies.
Better Customer Experience: Policyholders report a higher level of satisfaction with the NFIP due to improved service delivery, self-service capabilities, and clearer communication.
Increased Efficiency: The streamlined claims process and data integration have led to greater operational efficiency, allowing FEMA and insurance providers to handle an increased volume of policies and claims with fewer resources..
Scalability: The cloud-based infrastructure allows the NFIP to scale its operations to meet growing demand and adapt to future challenges, such as the increasing impact of climate change.

Conclusion

The NFIP Pivot system modernization effort represents a significant leap forward in improving how flood insurance is managed. By leveraging modern technology, data analytics, and automation, FEMA has created a more resilient, efficient, and responsive system that is better equipped to handle the challenges associated with increased flood risk across  the nation.