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February 2001
Three Insurers Lead with Speed
by Maria Medina
Speedy service makes for happy customers. That's why so many
insurance providers are using advanced automation and collaboration
technology to more efficiently manage workflow, resolve conflicts and
share information with service partners and customers.
As fast as the technology can be, futurists envision even faster
service with purely Web-based insurance processes. By employing XML,
policy applications and claims will be captured and exchanged with
business partners online, with support for any platform and a range of
devices, including telephones and handheld computers.
"We are still far away from seeing everything completely digital, but
these are the kinds of things we should expect in the next two to five
years," says Eric Stevens, vice president of technology evangelism for
e-process automation vendor JetForm.
Today's solutions often address hybrid environments in which
paper-based transactions predominate, but in the three examples below,
workflow and collaboration technology is helping insurers to build the
e-business processes of the future.
Safeco Issues Bonds In Real Time
There's no time like the present. That's why Seattle-based Safeco
developed a real-time solution that lets independent agents apply for
and get approval for surety bonds instantly online.
A surety bond is a type of insurance that is commonly secured by
service organizations working on a contractual basis. For instance, if a
construction company plans to perform roadwork for a government agency,
the company typically writes a proposal and applies for a surety bond.
Safeco sells surety bonds exclusively through independent agents, and
it is making the whole process faster and easier for them by putting it
online. Agents can now get approval for a bond within a few minutes
simply by accessing Safeco's Surety Plaza Web site.
The foundation of Surety Plaza is a customized application built on
the e-process framework from JetForm, Ottawa, Ontario. This system walks
the agent through the entire application process, collecting data and
matching it against business rules on the back end. If the application
meets approval criteria, Safeco can issue the bond immediately during
the same online session, sending it to the agent electronically in PDF
format.
"In the past, the agent would have had to call a local service office
and play back-and-forth telephone tag to get approval," says Greg
Davenport, Safeco's assistant vice president and director of surety
operations. "Then the information would be passed to an underwriter and
a clerk would type it up."
The old procedure took anywhere from a few days to a week or more.
Aside from its delays and redundant data entry costs, the old
paper-intensive process demanded substantial mailing and handling costs.
JetForm's e-process framework is an XML-based application that
presents a series of electronic forms that can be filled-in, edited and
processed through internal systems instantly so that bonds can be
approved and issued while the agent is still online.
Safeco is supporting online bond sales in only four states thus far,
but the company expects its approach to ultimately increase bond
issuance by 400 percent without requiring additional employees.
Aircraft Insurer Taps Enlightened Automation
The Aircraft Owners and Pilots Association (AOPA) Insurance Agency is
discovering new ways to manage policies and improve customer service.
The agency is building a Web-enabled collaboration and automation
platform that will ease communications with carrier partners and ensure
long-term success.
Located in Wichita, KS, the AOPA Insurance Agency is an independent
broker serving the general aviation market. Like other insurance
providers, the agency retains all documents (applications, policies,
invoices, correspondence, etc.) pertaining to its customers for at least
10 years. These archiving requirements aren't likely to change with the
move toward electronic records, but the agency is trying to gain
efficiencies by moving away from paper documents.
"Instead of receiving paper, we are working with our [carrier]
business partners and telling them to send [records] electronically,"
says Scott Doberer, the AOPA Insurance Agency's administrator.
Doberer says the agency is establishing dedicated lines to its
carriers, which enables them to download work securely, directly and
purely electronically. As for legacy records that originated on paper,
the agency is now scanning in boxes of these policies and records every
week so they can be managed electronically.
The AOPA Insurance Agency is using Acorde, from Optika, Colorado
Springs, CO, to eliminate paper-based processes and replace them with
collaborative electronic processes. Acorde is a content management
system with three components: Context, Process and Resolve. Context is
the core content repository, managing storage and retrieval of document
images, electronic documents, emails and other content in an
Internet-based architecture. Users do not have to worry about where
information is stored; they can obtain secure access to the system from
anywhere through an ordinary Web browser.
Acorde Process is a workflow module with a graphical interface that
allows users to design work processes and apply rules for routing
information and work tasks throughout an organization. The system
notifies users when work is ready for their attention, and it monitors
the speed and volume of work processed as it is seen through to
completion.
The third component, Acorde Resolve, is a collaboration tool that
allows users to review electronic work documents and supporting
information (such as images of original policies) with the help of
Internet-enabled tools such as email, instant messaging and online
discussion threads. If users want to make a change in the accounts
payable system, for instance, they could use Resolve to collaborate with
an accounting administrator about a policy payment or a claims
discrepancy.
The AOPA Insurance Agency is embracing new approaches, and Doberer
says the agency's business partners are following suit. "As their
technology changes, they are more open to these ideas," he says. Doberer
doubts this type of collaboration will be enabled by all of AOPA's
carriers, but if the larger players are open to electronic transactions,
he says the agency will have a real opportunity to improve service.
Internally, Acorde's report management capabilities have enabled the
agency's accounting department to dramatically increase productivity.
Instead of waiting for printed green bar reports, the department
receives crucial data electronically, and the books can be balanced
within two days instead of a week.
"That was a big win for us," says Doberer.
The next step will be building a self-service Web site with the help
of the agency's carrier partners, says Doberer. The site will offer
up-to-date account information, and it will give customers the
flexibility to track the progress of claims and view their vital records
online.
"New technologies allow flexibility, and being flexible has been
vital to our success," Doberer concludes.
Canadian Direct Speeds Claims Approval
Canadian Direct, a direct writer of property and casualty insurance,
is improving customer service by speeding claims processing. According
to Vince Muto, vice president of claims operations, this has a ripple
effect throughout the insurance service supply chain.
When a customer reports an auto collision claim, for instance, the
insurer directs the customer to one of the body shops in its network and
makes arrangements to have the car repaired.
"The approval process is important to these business partners," says
Muto, adding that getting a decision within 24 hours, instead of a
couple of days, makes a difference in more than just time. "The more we
treat our business partners to speedy service, the better they are going
to be with our customers as well."
Canadian Direct had originally deployed a less robust automation
system, but with more than 86,000 policyholders and its customer base
growing by 2,500 monthly, the company recognized it needed a more
sophisticated workflow solution. The company chose Enterprise Imaging
and Workflow, from Eastman Software, Billerica, MA.
Enterprise Imaging captures paper-based information as images,
ensuring quick, easy retrieval and enabling electronic collaboration.
Enterprise Workflow coordinates business processes with links to
supporting images, legacy data and line-of-business applications. The
system ensures that service agents detail their actions and keep
customer account information up to date. For example, each time a
policyholder contacts an agent, the details of the call are documented.
When decisions are made regarding customer claims or correspondence, the
system stores the details of the decision electronically so these notes
can be called up in an instant whenever the customer calls in for more
information.
"We launched this [project] so we could gain efficiency," says Muto.
He says the company has netted a 15 percent to 20 percent gain in
productivity by eliminating paper-based claims processing.
Canadian Direct is using Enterprise Imaging and Workflow within the
claims department because it was so paper intensive, but the company
plans to extend it to other departments as needed.
Canadian Direct recently launched a Web site that provides general
company information and comparison quotes, but it has yet to be linked
to the customer information systems.
"What we would like to do in the future is offer [customer service]
online," says Muto. "We recognize the need for online services and
empowering the customer."
While there are no definitive plans to enable policyholders to renew
policies, look up account information and make payments online, Muto
says he would like to offer these services by the year's end. When
Canadian Direct is ready, the Eastman Imaging and Workflow systems will
be ready and able to plug into the Internet architecture with
appropriate provisions for security.
While many insurers are heading toward online customer service, Muto
cautions that the insurance industry shouldn't expect too much from
customers. "We have to be cautious when giving the customer what they
want," he says. "We can't assume that they all want to be a part of
workflow."
Nine Tips for Developing an E-Strategy
by Brian Rowatt
Are you unsure how to Web-enable your insurance business? Be careful
not to lose sight of the impact your Web presence will have on your
corporate identity, core value proposition and future success. Consider
the following when reengineering your business for the Internet.
Add customer value. Many carriers feel they are losing customers
because they do not have a Web presence, so management is pushing for an
immediate migration to the Web. Unfortunately, some carriers are just
putting a Web front end on old systems, but this doesn't do much for the
customer. You must create a relationship with your customers on the Web
by augmenting what's already available from back-end systems. Proceed
cautiously and focus on building value. Don't just duplicate what the
customer can get with a phone call.
Consider the branding. In essence, the brand is the relationship. It
is a way of creating a relationship and delivering on the promise of the
relationship. As carriers change the way they interact with their
customers, they need to determine the impact of their Web-branding
strategy on those customers. Everything else flows from this.
Assess product distribution. As carriers lose control of their
distribution channels, they lose control of customer service offerings
and, ultimately, the relationship. This is particularly true of carriers
partnering with consolidators who may offer competitive products.
Carriers should explore the impact of these channels on their brand.
Examine the marketplace. Can you successfully answer the following
questions: Does your Internet technical team understand emerging Web
technologies and standards? What are your competitors doing and why? How
can you work with consolidators and at the same time protect your brand?
How might emerging legislation impact your success?
Understand process limitations. It's impossible to develop a Web
strategy without understanding your current process limitations.
Existing back-end systems have transactional limitations. You have to
augment the system with appropriate business rules.
For instance, if you have two back-end systems - one legacy system
and another you are migrating to - you should be able to make a change
in both systems. Also, you have to understand where information is
maintained; it might be in a separate system. The biggest challenge is
taking the time to understand the rules and how things are done in each
system.
Set clear business objectives. Web strategies without solid,
predetermined business outcomes cannot be successful. How will you
measure the success of this project? Everyone involved should be aware
of expectations and the effects of a missing deliverable.
Web projects do not seem to go through the same rigor as traditional
business ventures. There should be a projection of missed revenue or the
impact of a customer loss. Web implementations should focus on a
sequence of short-term deliverables (from three to six months) that open
up to a broader vision and corporate objective.
Create detailed specifications. Once you finalize the Web strategy
and agree on the business objectives, it's time to develop detailed
specifications. This is essentially the blueprint for the solution. What
is the technology going to accomplish? Are there architectural
limitations?
If you haven't determined who your technology partner will be, these
specifications can form a part of a request for proposal (RFP) document.
If you include information about the business situation, objectives and
deliverables in the RFP, technology `vendors are more likely to respond.
Consider the "build vs. buy" question. Why build a home-grown
solution if an off-the-shelf application is available? Often, you hear
explanations such as "our business requirements are unique" or "the
application is too costly." However, carriers should consider their
approach to information technology. What is the real cost of developing
internally? Who will support this on an ongoing basis? What is the
upgrade strategy?
Web initiatives require rapid tactical implementations that progress
toward a total infrastructure. Are internal initiatives grounded in a
long-range strategic vision?
Consider third-party support. Most carriers don't have the internal
resources to effectively manage the above steps. Even if they have the
skills, winning and maintaining commitment to the project is often
impossible. External partners can be critical to your team and can
provide independent thought, free from internal bias.
Brian Rowatt is director of insurance industry marketing for
InSystems Technologies, Markham, Ontario. Call 905-513-1400 or visit
www.insystems.com.
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