TABLE OF CONTENTS

Content Page Number

Summary and Background 2

Key Business Units 4

Proposal Guidelines 5

Project Purpose and Description 6

Transforming Insurance Value Chain 7

Project Scope and Requirements 8

Bidder Qualifications and Instruction 11

Budget Breakdown 13

Timeline 14

Proposal Evaluation Criteria 15

Confidentiality 17

References 18

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SUMMARY AND BACKGROUND
COMPANY OVERVIEW
Gothaer Insurance Company is currently welcoming proposals to develop, design, and
implement a new individual software system supported by applicable external software to
automate processes and calculations effectively. Gothaer has determined that a new
platform with adequate software support can meet the company objectives at present,
which is to effectively standardize the products and processes owned by the organization
and adjust the customer distribution towards more commerce customers. The new and
potentially more straightforward interface will streamline business processes and help
achieve more winning results.

With over 4.1 million members and a premium income of 4.42 billion euros, the Gothaer
Group is one of Germany's major insurance groups and the country's largest mutual
insurance associations1(Gothaer Group, 2017). Gothaer Insurance, currently headquartered
in Cologne, Germany, has a customer base currently comprised of private clients and small
and medium-sized businesses.

Gothaer currently serves all three common insurance sectors: life insurance, private health
insurance, property, and accident insurance. The company has a complex framework with
multiple subsidiaries.

Figure 2: Organizational structure of Gothaer

BIRTH OF GOBEST
GoBest was initiated at Berlin-Kolnische Versicherung in 1966 to expand to a new policy
system within Gothaer's damage and accident sector to optimize GoBest's features. The
development also included the need for an increased level of automation. The current
strategy framework, heavily dependent on centralized servers, emerged because of its
reliability and stable operation without longer timeouts.

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WHY THE RFP?
The purpose of this RFP is to gather proposals from various software suppliers, carry out a
fair and broad evaluation based on the company's specific criteria and select the most
strategically aligned candidate that best represents the direction Gothaer Insurance
Company aspires to go. The project to be undertaken is funded by GoSys, which maintains
all IT infrastructure within Gothaer.

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KEY BUSINESS UNITS
In 1996, the management board of Gothaer and Berlin-Kolnische Vercherungen decided to
merge their companies. The merger was completed in 2001, which created a new company
under the brand name Gothaer. In the years of the merger, the company sold shares to its
reinsurer outside of its primary business. It started its growth journey in eastern Europe by
purchasing existing insurance company shares in Poland and Romania.

Gothaer is managed by a mutual insurance association that goes by the name of Gothaer
Versicherungsbank VVaG. A 100% subsidiary manages the financials of the groups within
the group known as the Gothaer Finanzholding AG. All other subsidiaries within the group
are monitored and maintained by this asset. Gothaer Allgemeine Versicherung AG(GA) is a
significant risk-bearing entity for property and casualty insurance within Gothaer.
Germany's most prominent property insurance companies offer their products to both
private and commercial clients. Also, GA is an expert in providing combined insurance
concepts and multiple-risk products. The company's forte is its strong sales force providing
high expertise in customized insurance products. Within a stagnating German insurance
market, GA offers insurances within industries characterized by higher than average
growth rates – such as on-shore wind engines.

The whole IT infrastructure, which includes data centres, networks and installations, is
supervised by Gothaer Systems GmbH(GoSys). GoSys delivers highly advanced knowledge
regarding both the development of customized applications and the integration of
standardized applications. Subsequently, GoSys has shifted focus from making and
developing software to integration and maintenance.

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PROPOSAL GUIDELINES
This request for proposal represents the requirements for an open and competitive
process. Proposals related to the task at hand will be welcomed and accepted until 5 pm
September 14th 2018. Proposals received after the due date will be returned to their
respective vendors. All proposals must be signed by an authorized official or
representative of the company submitting the proposal.

If the vendor submitting the proposal is required to outsource or contract any part of their
work to meet the requirements contained here, this must be clearly and separately stated
in the proposal. Additionally, all costs mentioned in the proposal must include all
outsourced/contracted work. The company holding any contract or outsourcing work must
be included in the proposal via their name and appropriate description.

All costs must be broken down to incorporate an explanation of all fees applied.

Contract terms and conditions are to be negotiated upon completion of the selection of the
winning bidder for the RFP. All contractual terms and conditions will be subject to review
by the Gothaer legal department. They will take into consideration scope, budget, schedule
and other necessary items relevant to this project.

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PROJECT PURPOSE AND DESCRIPTION
THE PURPOSE OF THE PROJECT
Even though GoBest earned valuable points for its reliability and efficiency, the change of
the existing policy system was motivated by incrementing process costs. The high process
costs were caused by a high degree of manual task processing and, simultaneously, many
different permutations of manual task processing product configurations. As the tool grew
and new functions were implemented, but not effectively making it inapplicable for
productive operations. Furthermore, the system was very complex and had a large number
of interdependencies. Gothaer wanted to solve this problem by incorporating a fitting and
well-built IT system with an improved degree of automation. The objective is to replace the
old policy system with a new high-end system integrated with maximum functionality.

PROJECT DESCRIPTION
Gothaer is seeking for a software solution provider to utilize the latest technologies to
derive a new system that is user friendly, automates tasks and maximizes the efficiency of
processes.

The new system should enable the sales force team to select a predefined contract in
collaboration with the customer efficiently and to enter this contract directly into the
database.

Now that investment management activities could not reimburse the company, the system
should generate automated calculations of optimized premiums in the commercial sector
to reduce process costs.

Additionally, the new system needs to be aware of different insurance tariffs and
parameters present within a contract to ensure that the premiums are computed rather
than estimated to minimize complexity and ensure organization.

Also, the new system must have the ability to gather and map more information about a
client to initiate an automated and consistent premium calculation process. An 80%-20%
model should be favoured where 80% of essential requirements should be implemented
primarily while 20% of the excellent features should be postponed for later development
stages.

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TRANSFORMING INSURANCE VALUE CHAIN
The commercial brokerage market has experienced continued consolidation, with the top
ten brokers generating 2.5 times more revenue than the following 90 brokers in the
market3(PWC, 2018, page 3).

The current operating model needs to undergo reassessment as insurance buyers are
demanding change. They are interested more in the diversity of available choices and the
flexibility when collaborating with insurance brokers. As a result, it has become necessary
to transform the insurance value chain, including:

RISK MANAGEMENT
Efficiently tracking the transport of high valued goods.

POLICY VALIDATION
Enabling policy validation in real-time to reduce coverage validation and enhancing
recovery potential by developing insurer to insurer communication.

COLLABORATING WITH REINSURANCE

Effectively supervising complex and multi-layered reinsurance contracts enabling
consumers to trace and manage estimated premiums and losses through a computerized
system.

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PROJECT SCOPE AND REQUIREMENTS
PROJECT SCOPE
The scope comprises all the design, development, programming, licensing, and software
support of the new system. All resources will be provided to the winning bidder by GoSys
for inclusion in the new platform's design.

The selected provider will be fully responsible for planning and performing a detailed
market research registry with assistance from the marketing team of GA. This registry will
analyze all present contracts and develop target demographics for future and potential
clients.

The following specifications must be satisfied to achieve project success:

• Development and operation of the Smart Solution must be streamlined.

• The supplier should adopt a lean and agile programming approach to incorporate
necessary changes when needed.

• User-friendly, simple environment derived from the latest technology that promotes
ease of use.

• The supplier should create prototypes before final products to brush up on

individual elements and functionalities of the system.

• The final solution must be incorporated into all GoBEST's databases.

• The Smart Solution should comply with Gothaer's brand policies.

• Supplier should provide necessary resources that accompany the system with
support for future improvement/updates.

• The supplier will be responsible for providing adequate documentation paired with
the complete system. These documentations will include configuration papers, installation
manuals, standard operating procedures and training regimes to ensure users find the
system and its environment relevant to their day to day tasks.

• Upon full acknowledgement, the supplier, shall hand over programming source
code, relocate the framework if needed and exchange all client rights to Gothaer's
insurance.

• Supplier shall be responsible for providing a guarantee on the intelligent solution

and providing administration-level access to make personalized changes if needed.

• The project must be completed within the deadline discussed in the RFP project
guideline.

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REQUIREMENT
This technical specification document has been created to serve as a base for an IT
infrastructure that will successfully incorporate the consultancy and license purchase
required to minimize costs and enable automation to optimize services. The implementation
of the system, external software, required hardware, training and consultancy needed for
the complete solution shall be arranged by the provider company. The main objectives of
the company are listed in the following Requirement Trace Matrix.

Seq Objective Functional Technical Requirement Deliverable

Requirement
1 Standardize Automate processes to Calculate premiums A user-friendly interface
Products and their maximum extent. based on customer data. enables custom contract
Processes. generation based on
customer data and can be
easily stored in predefined
data centres.
Enable selection of Generate
predefined contracts electronic contracts or
and entry of digital select from a set of
contracts predefined options.
in GoBest's Database.
Minimize process costs Automate the calculation
maximize efficiency. of optimized premiums
and reduce staff
intervention.
Define three customer Generate contracts with
groups: Private, possible costs based on
Commerce and customer group.
Industry.
Insurance tariffs and Map and capture these
parameters must be values in a
recorded. separate database and
link them to customer
data.
2 Shift Carry out customer Facilitate complex Separate interface for
customer segmentation to enable calculations to generate commerce customers with
distribution the sales team to contracts that are more practical segmentation
towards more generate customized suited to commerce algorithms to generate
commerce policies that will cater customers. organized and fitting
customers. to customer's needs, contracts
both private and with optimized premium
commercial. calculation.
3 Successful Enable platform to Incorporate packages Multipurpose Packaged
integration of collaborate with capable of carrying out software solutions
externally assisting software different types of tasks.
purchased effectively.
software.

PROVIDER COMPETENCY CHECKLIST

GoBest requires the winning bidder to be competent based on the following specifications:

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• The solution is supplied by an external program supplier with no involvement from
internal IT staff at Gothaer.

• Effectively build a new IT system under the management of GoSys that will align
with the new business goals of Gothaer.

• The supplier will be a public or private IT organization with satisfactory proficiency

in providing solutions.

• The supplier must have a proven track record in providing solutions to financial and
insurance companies.

• Any other previous affiliations with GoBest or any international organization must
be clearly outlined during the development phase.

• Workers dedicated to this project must operate on a full-time basis.

• The new framework must seamlessly integrate with externally purchased packages
rather than periodic improvements in the future.

GA will sort the bidders' list via an assessment system to generate a list of selected
bidders, including software providers proposing relevant software and system integrators
helping implement purchased solutions.

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BIDDER QUALIFICATIONS AND INSTRUCTIONS
QUALIFICATIONS
Bidders should provide the following modules as a section in their proposal for
consideration:

• Description of experience in planning, developing and installing solutions.

• Listing of full-time, part-time and contractor staff currently working in your

company.

• Examples of 5 or more solutions delivered by your organization relevant to this

project.

• Testimonials from previous clients on intellectual solution development and

implementation.

• Resources that will be used in this project, including the total number of staff, their
title, and respective role and experience.

• Properly structured and organized test plans.

• Complete timeframe highlighting individual milestones leading to eventual

completion.

• Project management techniques utilized.

INSTRUCTION FOR BIDDERS

We are inviting companies who can understand our business needs and provide adaptable
staffing arrangements for effective sourcing. The target is to replace the existing
framework with a more modern framework, incorporated with maximum usefulness and
functionality. The new framework should enable the business to choose a predefined
contract via successful collaboration with clients and input this agreement specifically into
the database. The framework will mainly deal with three types of clients: private,
commercial and industrial. Various clients will possess various needs, and hence, they will
require different products and terms that will cater to these needs.

DEVELOPING A COMPETITIVE ADVANTAGE

A meaningful competitive advantage can be achieved via designing and applying digital
platforms that can handle disruptions and bring about positive changes to the overall cost
structure of the organization. It will be necessary to develop scalable systems with the
potential to cater for niche offerings. Furthermore, focusing on delivering an end to end
customer experience and bringing about changes to the business model to nurture a test
and learn environment helps improve approaches to enter the market. These changes will
enable the company to adapt quickly to changes in the industry and constantly grow to
become the market leader.

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With a robust and flexible framework in place, companies will be able to re-focus time and
money into revenue-driving capabilities like external partnerships. Companies will invest in
data-driven digital capabilities to improve customer value and build backend processes to
support platform scalability4(PWC, 2018, page 6).

BUILDING THE RIGHT PLATFORM

Designing a futuristic platform is going to benefit the company in the long term. Following
generation architectures will likely be capable of:

• Enabling more granular services.

• Providing elasticity when dealing with traditional demands and reflex to disruptive
emergency products.

• Assisting business models and technology beyond their core capabilities, e.g. policy,
billing and claim systems.

• Promoting client-centred architecture built on core principles of atomic

components.

• Enabling reusability across processes.

• Grouping best of breed technologies, capabilities and services.

Future profitability and return on investment depend on being very responsive to business
and market conditions and digitizing business processes. Digitally enabled operation
models having a low-cost profile with increased automation and efficiency and customer
experience will drive innovation in the future insurance market.

SUPPLIER BENCHMARKING
The competition in the insurance market is immense, and it cannot be easy to collect the
usable market intelligence required to drive firm business decisions. It is essential to know
how the pricing and terms provided by our company compares to the rivals. Access to this
information can be the difference between excess spending and good saving opportunities.
An effective way of receiving actionable recommendations, long-term sourcing and
procurement strategies can enable the company to achieve and hold a competitive
advantage and makes the company aware of their status in the current market. More
systematic use of benchmarking can help insurers spot excellent and bad cost
performance and react accordingly. And data-mining techniques can help predict the risks
and costs of new claims, enabling the insurer to segment high and low-risk exposures,
devoting more resources to the former5 (Paul Francis & Sarah Butler, 2010, page 23).

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BUDGET BREAKDOWN
All proposals must incorporate proposed costs to accomplish the tasks described in the
project scope and requirements highlighted in the requirement trace matrix. Costs should
be structured as a one-time or non-recurring, or monthly recurring cost. Pricing should be
listed for each of the following deliverables and must follow the structure provided below:

Project Initiation and Planning: NRC/MRC

Market research: NRC/MRC

Database Development: NRC/MRC

Database Testing: NRC/MRC

Database Delivery: NRC/MRC

Deliverable 1: User Interface for generating customized contracts: NRC/MRC

Deliverable 2: Commerce customer-focused interface: NRC/MRC

Instalment of packaged software: NRC

…...........................................................

Other costs: NRC/MRC

Important Note: All costs and fees must be mentioned in each proposal.

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TIMELINE
PROPOSAL TIMELINE
All proposals in response to this RFP are due by 5 pm September 14th 2018. Evaluation of
proposals will be conducted from September 15th, 2018, until September 30th, 2018. If any
additional information or discussions are needed with any bidders, the bidder(s) will be
informed.

The selection of the winning bidder will be finalized no later than October 1st, 2018. Upon
selection, the winning bidder will be notified immediately, and contract negotiation will
commence promptly. Contract negotiations will be completed by October 15th, 2018.

Bidders who have not been selected will be notified by October 7th, 2018.

PROJECT TIMELINE
Project Commencement must be completed by November 15th, 2018.

The project planning phase must be completed by December 30th, 2018. The project
planning phase will determine the schedule for the remaining phases of the project.

The following diagram provides a brief overview of the timeline:

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PROPOSAL EVALUATION CRITERIA

EVALUATION CRITERIA
GA will examine all proposals based on the following criteria. To be considered for this
Request for Proposal, the bidder must ensure a completed proposal that needs to satisfy
all the following specifications:

• Proposal Suitability: Proposed solution(s) needs to satisfy the scope and meet the
requirements included in the RFP and needs to be presented in clear language and
organized structure.

• Experience: Bidders will be evaluated based on their experience in related field

projects as it applies to the project's scope.

• Previous contributions: Bidders will be ranked based on the samples of their work
relevant to digital solutions as well as client testimonials and references.

• Value provided and overall cost: Bidders will be judged on the cost of their proposed
solution(s), based on the tasks to be performed under the project's scope.

• Technical proficiency and experience: Adequate documentation with descriptions

about the technical expertise of the staff involved with the project needs to be forwarded to
the evaluation team.

EVALUATION PROCEDURE
Once GA has released the RFP and retrieved responses in the form of proposals, the next
step is to examine those responses, selecting the most appropriate provider and solution
that most closely meets the company's requirements and stays within its project's scope.
The evaluation steps taken to decide the winner of the whole process is presented below:

• Step 1: The team will assess the responses and generates a shortlist of providers. It
will do so by ensuring that the mandatory requirements are met. Furthermore, the critical
and friendly to have requirements will be reviewed and recorded in a spreadsheet model.
The scores from each spreadsheet will be added up to derive an overall initial ranking. The
decision will be made based on the gap between the scores of each provider and non-
short-listed teams.

• Step 2: The team will arrange individual vendor presentations to demonstrate their
solutions to the project team. The presentation stage aims to confirm the use of the system
and make sure the vendors' functionalities are present. The team will come up with a fact-
based evaluation and a scoring spreadsheet to judge individual vendor presentations.
Results of the demos are documented.

• Step 3: Reference check is an important step that will be conducted through a set of
questionnaires to differentiate between marketing hype and reality effectively. After the
reference check has been completed, a meeting will be arranged to review results and
score individual vendors.

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• Step 4: As presented in the earlier step, vendors will now have to provide a live
standard demo of their solutions to showcase their capabilities. The project team will
provide no feedback.

• Step 5: A meeting will be conducted following the live demonstration of the demo to
review the performances and rank them accordingly. The main objective is to shorten the
number of applicable vendors and synthesize solutions that come most close to the
required solution.

• Step 6: The project team will consult the customers using the solution or a solution
that comes very close to the proposed one. The extended reference check will focus mainly
on the implementation, problems, and end-user acknowledgement. The results will be
documented accordingly.

• Step 7: The shortlisted vendors will be provided with company data and asked to
present customized demos based on the company data. The purpose of the step is to
observe if the proposed solution delivers the required output by processing the given input.
The team will also score the ease of functionality of the system when carrying out the
evaluation. After the customized demos have been concluded, the project team will review
and rank each vendor's performance again.

• Step 8: A functional gap assessment will be conducted to enable the project team
to effectively locate any gap between the requirements established by the team in the RFP
and the proposed solution's functionality. The difficulty of bridging this gap will be
examined. The results will be forwarded to the senior management team as a green light to
proceed with contract negotiation with the finalists.

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CONFIDENTIALITY
All facts and information extracted by the bidders and their representatives in the RFP
procedure, including reports, references, specifications and data, will be conserved by the
bidders and their representative as secretive. The bidders and their representatives must
not disclose or transfer this data to any third party for use in advertising, marketing, or any
other purpose unless a written agreement is acquired from GA. All the tenders and all the
records consisting of financial information forwarded by a bidder to GA is confidential and
shall not be released to other parties. Where the secrecy of such information must be
maintained, the party revealing any information shall issue prior notice to the other party.
This disclosure shall be carried out through a legal passage. For preventing ambiguity, it is
now indicated that these obligations shall remain in continuity. This confidentiality
agreement is drafted and intended for utilization during the proposal processing or pre-
contract stage. The agreement is developed in the format of a short letter. It focuses on
ensuring that the confidential information shared at this project stage is guarded against
potential disclosure. The model presumes that data flows in a single direction, from the
employer to the prospective bidder and is written to favour the disclosing group.

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REFERENCES
1. Gothaer Group Extract from the Annual Report 2017
https://www.gothaer.de/media/ueber_uns_1/investors/annual_reports/2017_2/gothaer_konz
ern_2017_gb_englisch.pdf page 02

2. https://universitytasmania-
my.sharepoint.com/personal/cauahmed_utas_edu_au/Documents/RFP%20assignment%20c
ase%20study.pdf

3. The three cs of commercial insurance 2018

https://www.pwc.com/us/en/insurance/assets/pwc-insurance-top-issues-2018-3-cs-of-
commercial-insurance.pdf

4. A new take on digital PWC 2018 https://www.pwc.com/us/en/insurance/assets/pwc-

insurance-top-issues-2018-digital.pdf

5. Cutting the cost of insurance claims; Taking control of the process 2010
https://www.strategyand.pwc.com/media/file/Strategyand_Cutting-the-cost-of-insurance-
claims.pdf

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