Gone are the days when underwriters met in coffee shops and their word of honor was enough to anchor a claim. Modern imaging technology makes insurance claim processing less colorful, more efficient and more accurate.
The insurance industry has been around for centuries and in some ways it hasn't changed. It's always been a business of trying to predict the likelihood of catastrophe and how much it's worth to promise to fix things that go wrong. But the volume of insurance policies that big companies write has multiplied. When they need to check an item on a policy, adjust a claim or approve coverage, insurance companies can't wait to find pieces of paper and physically move them around.
That's why many insurance companies have invested in imaging systems to help them process policies and claims and archive documents. These are solutions four insurance companies have found to their document challenges.
Tides Change At DP Mann
In the late 1600s, ship owners, ship masters and wealthy merchants gathered at Edward Lloyd's coffee house in Lime Street, London, to smoke and swap sea stories. In those days, when a ship needed to be insured, a broker (then called an insurance office keeper) would take a policy around to several rich men who would back it personally. Each one willing to take on a portion of the risk wrote the amount and signed his name to the policy. Lloyd's coffee shop was a good place to find these men and sign contracts.
Although the coffee shop has been replaced by a huge office building with its own shopping mall, some things haven't changed at Lloyd's of London. Brokers bring their policies around to many underwriters (usually syndicates of underwriters). Several of them take on a portion of the risk. Each one writes the amount and signs their name on a slip of paper.
But at least one group working at Lloyd's has undergone a technological sea change. DP Mann, Lloyd's second largest syndicate, reinsures many types of insurance, including workers compensation, legal liability, legal associations, international business, property and catastrophe. Two-thirds of their business is in the US. DP Mann is using imaging to bring their business into the 20th century.
For example, the slip of paper with the list of underwriters tends to be unreadable, with messy scribbles all over it. "Imaging improves the readability of the slip because you can magnify it on your screen," says Paul Fitzpatrick, DP Mann's user systems manager.
In April, DP Mann installed Lava 4.4 from Lava Systems (Mississauga, CN 905-625-5924) in their small political risks area, which provides 5% of their income. This division, with 86 employees, covers contracts in foreign countries against a religious or political overthrow of the government that might interrupt the project.
The group concentrates on Eastern Europe but steers clear of highly unstable countries like Libya and Iraq. They do a lot of business in Russia. They might insure a construction project in Kazakhstan. If, in the aftermath of a political coup, materials were not paid for, DP Mann would have to provide coverage. In the future, they would like to cover political risks in the US. They're talking to a New York underwriter that would protect contracts against changes to state laws.
Luckily for the company, in the two years they've covered political risks, nobody's ever filed a claim.
To write and process the 1,500 yearly contracts in case political unrest topples an Eastern European government, DP Mann needs the best technology. Documentation is voluminous. The underwriter has to pull up information quickly when negotiating with a broker.
Typically, a broker comes up with an outline of insurance coverage. He produces the slip with all the underwriters' signatures. Someone at DP Mann photocopies and scans that slip and the supporting documentation into the Lava system (using a Pentium 133 PC workstation). An underwriter comes up with a quote and gets that back to the broker, who sees if he can get a better deal. If the broker accepts, an underwriter stamps the slip and an assistant scans any other documents, such as binding authorities or declarations to the contract. Assistants type in a risk number, the date, and the document type to index it in Lava.
The documents are stored on a Compaq multiprocessor and an AS/400 that act as file servers. Eventually, the company will invest in optical disc storage. The corporate database sits on an IBM RS/6000. A megastream line and a local area network connects the 25 underwriters in the Lloyds of London building with the rest of the group, in another building 200 yards away.
To keep up with the governments whose fortunes they rely on, the political risks division subscribes online to Reuters Insurance Briefing and Political Risks Information Service in New York. DP Mann also consults sources on the Internet, through a company that surfs the net for them.
DP Mann spent ý38,000 (US$61,000) to buy their first scanning workstations and 10 seats of Lava software. They plan to buy more this year.
Its openness was one reason DP Mann chose Lava. "We looked at other solutions and they were very proprietary," says Fitzpatrick. "We wanted an open system that could be integrated easily with our existing Sybase database as well as our risks application. Also, Lava is very fast."
Speed is a virtue here, in more ways than one. It helps keep the brokers honest. "Recently," says Fitzpatrick, "a broker came up to an underwriter and said, ýI've come back to you on your contract. I got the information you required. Here's the contract. Will you sign it?' The underwriter thought the premium was different from what he'd put on the original contract and asked if it had been changed. The broker said no, it hadn't. The underwriter pulled it up on Lava and saw that it had indeed been changed."
That broker no longer has that job.
If the underwriter had had to look for the original document, he would never have been able to say anything on the spot and would probably have let it go.
"Another benefit to Lava is it forces sensible filing practices within the department. We save 2-3 days a month that used to be spent filing documents. The paper documents are still saved, but we just dump them in a big box with the month written on it."
The Lava installation was problematic at first because DP Mann was using Windows 3.11.
"We had terrible trouble with the video drivers. The system kept crashing," says Fitzpatrick. "Lava was very helpful in solving the problem. Now we're using Windows 95
Low-Cost System Appeals to Frugal New Englanders
so we don't have the problem any more." The backfile conversion went smoothly, with just one assistant scanning and indexing the old political risk contracts.
Eventually, Fitzpatrick says, DP Mann would like to put Lava in the hands of every broker. Accounting could put their invoices on it. The marketing people could put the piles of marketing bulletins they get from Lloyd's on it.
"If I had to do it over again, I'd do more training up front," says Fitzpatrick. "Our pilot was a live project and, for this application, it wasn't dangerous to do that. People were up and running it as they learned."
DP Mann and Lava gave about two days of training initially, but "there's a lot to Lava," he says.
Ever since the Puritans brought their austere, self-denying habits to Jamestown, New Englanders have been known for their ability to economize.
The New England, a Boston-based insurance and investment company, is no exception. When they decided to upgrade reports from paper and microfiche to electronic formats, they passed up the chance to indulge in a traditional imaging system that would let them pass live, changable documents around. They chose a view-only system costing half as much.
"Our interest is bringing together computer-generated outputs with external outputs and displaying them online in a common interface with a common index," says Gemma Burns, The New England systems consultant.
The company chose Mobius' (New Rochelle, NY 914-637-7200) Infopac-RDS system. This report software captures, stores, manages, migrates and lets people view computer-generated reports. Later, The New England might take on a full-blown imaging system so they can scan, optically read and print documents.
The viewing system lets people easily show specific information to groups of other people. "We have a payroll document, a single report that's indexed by division and department," says Burns. "Traditionally, with a paper archive, an administrative assistant breaks it down by division and redistributes it, maybe printing out 30 copies. The manager for area A sees the report for his area, but doesn't see area B. Online, we archive the report to Infopac-RDS. Then viewer A can only view the portion they need to see, and viewer B sees their portion."
The "business partners" -- other departments in The New England -- asked the data center to provide a tool that worked well in a client/server environment and let a document produced on any platform be viewed on any terminal.
Documents are generated by different incompatible software programs all over the company. Most still come from legacy mainframe applications.
They go to all kinds of workstations, some of them primitive. Departments are charged for the equipment if they want to upgrade their systems, and many don't want that expense. "We're not in business to make our partners go and buy new stuff," says Burns.
Five hundred people are connected to the system with an IBM Token Ring. The server is running Windows NT. They use equipment that runs the gamut from dumb terminals to high-speed processors. The dumb terminals are fine to view electronic files but not for images. A companion software product from Mobius called DocumentDirect puts a graphical user interface on these terminals. Users see files in metacode, AFP and TIFF formats. Any file can be seen on any screen.
Data distribution is a strength of this system -- it's as easy to send a report to five people as to 300. About 4,000 reports are regularly sent out and archived with this system.
Usually, The New Englanders can't alter the archived documents they view. That's the limitation of a viewing system. However, using DDE (Dynamic Data Exchange -- a method of moving information from one Windows application to another), DocumentDirect can migrate data from a report into other applications like Word, Excel, PowerBuilder or Access.
Columbus Leaves Old World of Fiche for New World of Imaging
With a little extra effort, the process can be refined and made more sophisticated. When a user is in their favorite application, they click on an icon to launch DocumentDirect, pull the target report, extract information, kick off another application to do a calculation and turn it into an e-mail message.
Another plus to Infopac-RDS is a forthcoming software component, Infopac-RDS for Net. This will let the company easily put archived documents on the Internet and an intranet the company plans to build. When they've sorted out firewall and other security issues, they plan to put policyholder information on the Internet and internal notes on the intranet.
All documents are stored on the IBM mainframe for as long as the writer wants. This varies from three days to 20 years. When that time is up, the document is transferred to a magnetic cartridge. Even then, access time only increases from a few seconds to about a minute.
Burns won't get specific about what she paid for the system or her return on investment. "It costs less to set up an online view environment than it does to buy a high-speed laser printer," she says.
Columbus Life Insurance is a highly respected name in Columbus, OH. Their system for managing policy records was long-established and reliable. Sadly, that system, based on jacketed microfiche, was also unwieldy. This caused slow response times.
When Western-Southern Life (the parent company) decided to relocate Columbus Life to Cincinnati, OH (their headquarters), the need for change became clear. As Patrick Walsh, Western-Southern Life's Advanced Technology Group manager explained, moving huge quantities of jacketed fiche from Columbus to Cincinnati was not practical. (Jacketed fiche consists of strips of film or individual frames placed inside rows of transparent pocket strips.)
Could the microfiche make the voyage to electronic images, expediting the move and the company's future policyholder service?
Yes, but the conversion task was enormous. Life insurance is a paper-intensive business with lots of old but active policy records that require periodic updating. In the case of Columbus Life, these records included some 400,000 jacketed microfiche, each jacket with up to 50 images -- 20 million potential images to convert.
Columbus Life and Western-Southern demonstrated their commitment to the future by choosing to set sail technologically as well as physically. This meant advancing from desktop terminals, microfiche readers and typewriters to PCs, imaging and workflow.
Roughly 160 PC workstations were equipped with the latest hardware and software for high-speed document image processing and retrieval to accommodate the new system.
But the problem of converting the jacketed microfiche to electronic images remained. "When we started this project, we didn't really know what could and couldn't be done," says Walsh.
"It's been a learning experience, with lots of changes along the way. At the beginning, we planned to get a service bureau to scan the jacketed fiche, but they wanted 10 cents an image. The price seemed very high. That alone would have eaten up two-thirds of the total budget.
"Also, there were more problems and potential expense. The fiche was our only record. Should we copy it before releasing it to a service bureau, and if so, should we send the original or the copy?"
Sending out the originals involved risk. Insurance companies like to avoid risks. The records would also be inaccessible for a period of time.
Nobody knew which record would be needed when, although fate would typically have it that the one required is the one that's unavailable. So they decided to do their scanning inhouse.
Wayne Sandberg, president of Amitech, the Washington, DC-based VAR that sold the system to Columbus Life, points out that jacketed fiche are very different from ordinary step-and-repeat microfiche. "Jacketed fiche are a great way to convert continuous film into easily indexed and filable entities. They've been ideal for policy filing because they can be updated at different times."
But this flexibility can cause problems when you're scanning the fiche.
The frames are not necessarily straight. There are different size gaps between different strips or frames. Resolution density can vary as different parts of the fiche are created at different times. Extraneous dirt, hairs and so on can get introduced into the jacket if the working environment is not clean.
Amitech made two high-speed scanners for jacketed fiche available to Columbus Life for evaluation. Rita Roeper, Western-Southern's project manager, Patrick Walsh, and a team of programmers evaluated the scanners.
"We chose SunRise Imaging (Fremont, CA 510-657-6250) because their RowScan product gives us much faster throughput," says Walsh.
"RowScan scans the entire jacket into one image," he says. "But you can still locate, segment and extract the individual pages later. It scans a row in 11 seconds. It has a blank row detect, which stops the scanner from scanning when it detects that there are blank images.
"This speeds up scanning because many jackets are only half full. Some of the partially filled jackets can be scanned in as little as 20 seconds."
"We even held up our production so that we could get an additional feature SunRise offers, their IDC (Image Density Compensation)," says Roeper.
"Western-Southern was one of the first companies to use it," she says. "We started microfilming in the '70s, so there are lots of variations in quality of film. Because the quality of our fiche varied so much, we needed IDC to make up for the differences and produce better-quality images."
The original idea was to run two SunRise scanners -- one for archived records and the other to scan active policies as they were requested. It soon became apparent that both scanners should be used for active policies.
"It took us a while to realize, but only about half our records are now being accessed," Roeper says. "By scanning on request, we could build our image database while eliminating the need to make a separate copy for each person who requests the file.
"Scanned jackets are marked and refiled at the front of the drawer. We have one operator running both scanners. That person creates about 20,000 images a day -- 400-500 jackets. So far, we've scanned about one-sixth of our total jackets."
RowScan needs to be set up with the correct settings. This is difficult, because the jacket may have large variations in density within it. One of the programmers at SunRise helped Columbus Life with this, and the company has also learned through its scanning experiences.
Now, the person who feeds the jackets into the scanner knows which ones will scan well. Questionable jackets are set aside for separate scanning later, when the scanner is reset to do the "really bad" jackets. About 2% of the scanned images have to be reworked, which is done manually using ScreenScan (Novi, MI 810-380-6400).
Indices are keyed, although it's tedious and time-consuming work. Since Columbus is only doing it once, they
Iroquois Clears A Pathway Through
wanted to do it right the first time.
Each image has a policy number associated with it, which is the primary index. RowScan works by scanning the complete fiche into one image and passing that image over the LAN to a workstation, which locates and "segments" or separates each individual frame electronically. It then extracts each frame as a separate TIFF image.
In the case of Columbus Life, after the image goes through the segmentor and extractor, a Visual Basic program imports the policy number index into an Oracle database. The image is then available to a team of indexers, who recognize and key in the secondary index fields, which happen to be the document names.
The secondary index field was drawn up after Roeper and her team looked through 300 different Columbus Life forms and grouped them into document name levels. Now they use an average of three keystrokes per index. They have about 40 secondary indices.
This was another area where they made changes as the system evolved. At the beginning Roeper's team had 100 secondary indices, but this was too cumbersome. As they prepared the training manuals, they realized how long it would take to train temporary help to do all that indexing.
So the pendulum swung to the other extreme, with 10 secondary indices. This gave faster indexing, but retrieval took longer, because fewer categories meant users had to screen through images. The existence of forty categories gave Columbus a compromise between fast indexing and retrieval times.
So far, Columbus Life and Western-Southern have converted about 3.5 million images. The process has been slower than using a service bureau, but it's been more economical because the company used their own staff.
Lesley Hill is a consultant at Harvey Spencer Associates, (East Northport, NY
516-368-8393).
Longfellow wrote in his poem, The Song of Hiawatha, about the life of the great Iroquois chief. Of his bond with his two best friends, he said, "Straight between them ran the pathway, never grew the grass upon it."
The Iroquois Group, a wholesale insurance firm in Olean, NY, has adopted some Iroquois philosophy as well as their name. No proverbial grass grows on the channels of communication at Iroquois since they began using imaging two years ago.
Iroquois offers property and casualty insurance to 800 insurance agencies in 19 states. People at Iroquois share document images in marketing, accounting and commissions.
Iroquois bought File Magic Plus from Westbrook (Branford CT 203-483-6666) about two years ago. Databranch, an integrator also based in Olean (716-373-4467), installed a scanning station that includes a Fujitsu (San Jose, CA 408-432-6333) 3039 duplex scanner scanning 25-30 ppm and a 486/66 workstation with a 17" monitor.
The marketing department used it first because they have the most paperwork. They often look up documents like contracts and licenses. Their paperwork was the easiest to image because it's mostly 8 1/2" by 11" paper. (Accounting and commissions use odd paper shapes.)
The marketing people scan profiles on agencies, copies of insurance licenses, copies of errors and omissions policies, company appointment requests and termination sites.
Accounting started using the system about six months ago. Two months ago, the company introduced the commissions department to the system.
The Iroquois Group has 60,000 documents stored on the system, including copies of checks and bills. All the documents are stored on the 8 GB hard drive of the application server, which is a Compaq 1500 Proliant Pentium 100.
"We were storing them on an optical disc jukebox," says Valerie Slocum, MIS manager. "Performance was an issue when you needed to retrieve files. When hard drive prices dropped, it made sense to transfer from optical to hard drive." This way, instead of waiting for software to tell a jukebox arm where to get a file, they just ask the hard drive, which remembers where the file is and pulls it up.
Iroquois backs up all their images on tape. They'll eventually use hierarchical storage management (HSM), which bumps seldom-used documents from the hard drive to an optical disc.
In all three departments, people go to one of the shared scanning stations to scan their documents to an electronic in-basket. Then they go back to their desks to index the documents. Indexing takes more time than scanning.
The network backbone is Novell NetWare 4.1. The application server is a Hewlett-Packard (Santa Clara, CA 408-246-4300) NetServer 486/66. It has e-mail, word processing, Excel and other office software.
Soon, Iroquois hopes to let employees work on File Magic from home. "We have a lot of working mothers here," says Tina Wedge, marketing manager. "When their kids are sick, they'll be able to sit at home and file documents they've scanned."
Iroquois is installing a communications card to feed document images to employees at home without tying up the company system.
