There is nothing energizing or healthy about the paper chase in the property/casualty insurance industry. The insurance business arguably is the most paper-reliant and, as a result, paper-laden. Of course, managing all that thin white stuff can take its toll--on productivity, customer satisfaction and the bottom line.
While today's emerging Web-based technologies will never eliminate paper altogether, in many cases they are making life much easier and saving serious dollars when it comes to managing all sorts of insurance-related documents--forms, reports, memos, e-mails, faxes and policies--that in an earlier life required paper to exist.
Riko Metzroth, vice president, e-business, at the Farmers Group of Insurance Cos. in Los Angeles, will attest to the Web's new power in document management, especially on the printing, mailing and access front.
"It's a very exciting time here. We're Web-ifying everything," Metzroth says, adding that the company is using technology from Mobius Management Systems Inc., the Rye, N.Y.-based content-management provider.
At Farmers, which operates in 41 states and serves more than 15 million customers, personal and commercial, managing paper through the latest technology began way back in 2000. Its technology evolution has culminated with the company's Agency Dashboard, an online site where the agents can look up, download and print out anything they need, such as bulletins, underwriting rules and sales campaigns.
"Most of all, we don't want them to worry about technology, but we want to make sure they have easy access to all the documents we used to have to mail to them," Metzroth says.
Along with Agency Dashboard, Farmers made several moves to execute a paradigm shift that has resulted in less paper, and is making the company, its brokers and its customers much happier in the process. There are also the aforementioned dollar savings. In terms of document management, Farmers has eliminated 3,500 reports that previously had been printed at a cost of almost $525,000 a year in printing and related distribution costs.
"We were spending a lot of money, but the worst part is that the agents were lucky to get critical reports within three weeks," he says. "You can't act quickly on old data.
"We're not only saving about $525,000 a year, but we've also greatly increased the speed in which we can get the information out there," he adds.
Farmers 15,000 agents were used to seeing their sales reports in a specific printed format, but now they see exactly the same data online, even in the same format, but with the added flexibility of instant search.
On the regulatory front, Farmers no longer prints out reports. If an insurance department needs one report or another, staff just log on, print it out and send it to the appropriate person.
"Managing documents electronically cuts across the entire industry," Metzroth says. "But you can't do it quickly. You have to be patient. Most of all, you have to be willing to invest in the technology."
Neil Weiss, director of insurance solutions at Mobius, says carriers are spending significant amounts of money printing and mailing simple insurance documents out to customers--such forms as declaration sheets--and it's simply not necessary any longer.
"We talk to a lot of carriers, and the main thing we ask them is if they present content to agents and policyholders online," he says. "The distinction is data rather than documents. The big challenge is: Can we present the actual document on the Web in printable form? As a policyholder, there is no way to shut the paper off unless I can get the same document online."
Harrisburg, Pa.-based Penn National Insurance, which provides property/casualty insurance and surety bonds to businesses and individuals through a network of more than 700 independent agencies in nine eastern and mid-Atlantic states, has deployed a single, comprehensive infrastructure for its batch and real-time document applications.
According to Tom Caskey, senior systems analyst at Penn National, this technology-fueled approach improves time-to-market and creates a more automated yet personalized touch through its critical customer documents.
"Our commercial business comes from many small businesses, and to provide them with the best service, we believed strongly that automating as much of the process as possible--and minimizing human intervention with the policies--would take the burden off the underwriters and support staff," says Caskey. That gives them more time to spend supporting customers.
Penn National uses Exstream's Dialogue software, which was implemented at Penn National in just six weeks. Today, documents are constructed by pulling data from Penn National's Phoenix policy administration system, which is stored on a Microsoft SQL Server database and then sent to Dialogue for document production. The new process allows Penn National to create policy worksheets and other client-specific documents in real time and present them online for underwriter approval and agent review in a matter of minutes.
Underwriters then remotely drive the real-time production process by authorizing the policy to be printed only after it has been approved.
Before, underwriters' computers would be tied up for several minutes while a document was printing and, the more vehicles that were covered on the policy, the longer the printing took.
"We are extremely impressed with the speed in designing documents and how fast the production engine creates the finished product," Caskey says.
Recently, Penn National added explanations of benefits, or EOBs, and checks for vendor payment in one print stream, so they can be mailed in a single envelope, eliminating the need to manually match the EOB with the check and providing additional postage savings.
"Our TPA has been in production with this system for two months, and we are saving $40,000 a year in postage alone, plus eliminating the manual effort," Caskey adds.
According to Michael Charest, group vice president, insurance solutions, at Exstream in Lexington, Ky., the middle and large P/C carriers typically spend too much time looking at overall processes, and not at adopting new technologies fast enough.
"It's an ongoing battle, and sometimes they can't get out of their own way," he says. "The Penn Nationals and the SMB market work in a totally different way."
Charest adds that not all large carriers are slow, as Exstream recently completed a project with Great American that focused on a new product for horse racing.
"They want to be able to write policies in real time, right on the spot when people are buying thoroughbred horses," he says. "Penn National is the same way; they desire that speed time to market. SMBs just don't have the 'legacy luggage' that large carriers have."
At OneBeacon Insurance Group, a Boston-based carrier for personal, commercial and specialty insurance, the pain of printing, mailing and storing policies in archived files proved both cumbersome and costly. That is, until OneBeacon moved to a centralized electronic archive and delivery system in 2003. The system, from Docucorp, enables OneBeacon to store, retrieve and deliver archived policies through a Web browser.
According to Joseph Zuchowicz, OneBeacon's information-technology manager of enterprise business services, the company achieved a return on its investment in the first year, but it also has been implementing new features using the Web-based solution.
For example, OneBeacon produces certified copies of original policy documents, and has eliminated printing and mailing branch-office insurance policy copies. In fact, Zuchowicz says, OneBeacon stores all text, graphics and data related to policy transactions in one central archive. Other features include accurate reprinting of original policies and easy searches against stored policies. The Docucorp system also enables OneBeacon to display, present and view policies in electronic format.
"We used to have a conglomerate of systems to store forms," he says.
Zuchowicz says the reduction in producing and distributing paper policies resulted in an estimated savings of $650,000 from 2004 to 2005, with the bulk of it resulting from eliminating postage and not having to send out policy service copies to branch offices.
"We've also had savings internally with product development cycles," he says. "Before, when we had to print a policy, we had to physically look at it after printing. Now, using the new system, we can render the policy on the fly and output it in PDF format, so we can see instantly what the results are up front."
OneBeacon also saves on travel costs, as internal auditors work out of home offices and do their work online.
"We have a lot of interfaces into the archive from ancillary systems, mainly policy inquiries," he says. "Originally, it was just an archive search, but now we've expanded to allow other core systems to get access to the data."
OneBeacon is offering the system to agents, who also enjoy cost-savings benefits by reducing their print and postage costs. Producers can get weekly or daily registers of their policy transactions electronically the next business day.
OneBeacon also implemented an agent print "opt-out" program, so producers have the option of receiving their transactions electronically through the content management system or in paper reports.
"They can view it all online, with a search engine," Zuchowicz says, adding that later this year OneBeacon hopes to open the system up to insureds as well.
"It made a big difference in so many areas," he says. "But most of all, we can use it to serve our producers and insureds better by offering a state-of-the-art technology solution for immediate access to policy information."
lives in Philadelphia.
October 1, 2006
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