Back in the prehistoric 1990s, The Hartford Financial Services Group applied technology the old-fashioned way. It used a vertically oriented approach to solve problems in discreet business silos.Today, the $15-billion investment and insurance company is taking an enterprisewide viewpoint when it applies information technology. This new approach ties together disparate information technology offerings, simplifies some of the complexity of e-business and makes it easier for distributors to sell and service The Hartford's insurance products.

In 2002, The Hartford launched two major e-initiatives to provide the kind of service customers have come to expect in the digital age. The programs-broadly called eSales and eService-make it easier, faster and simpler for distributors, brokers and agents to execute electronic business procedures with the Hartford, Conn.-based insurance carrier.

"Our customers expect-and rightly so-that technology should make doing business with us easier," says Jim Devoe, director, strategy, P&C e-business unit. "As a result, we place a high priority on 'ease of doing business.'"

The Hartford reaps substantial business rewards when it successfully dovetails its technology offerings with the operations and needs of its distributors. "For us, 'ease of doing business' translates into a broad range of benefits including efficiency, quality, consistency, predictability, flexibility, integration and speed," Devoe says.

Supporting the Hartford viewpoint is a recent AUGIE survey, conducted by ACORD, Pearl River, N.Y. The report says that 80% of respondents would be more likely to place business with a carrier that allowed pre-fill from the agency management system to the company's proprietary Web site, even if the product cost is not the lowest.

To that end, The Hartford began its eSales program in January 2002 with a single business unit and has now expanded it to cover most of its property/casualty lines. As part of the initiative, the company recently introduced Quote-to-Issue (QTI) for homeowners insurance and bridged it to its also recently introduced QTI for auto insurance.

Based on ACORD XML standards, the bridge enables users of AMS Services' AfW and AfW Online agency management systems, or AMS rating products, to transfer data directly to The Hartford's QTI Internet-based rating systems. Additional bridges will be rolled out throughout this year.

"Agents don't have to re-enter all of that information. We are able to grab it out of their native system and prepopulate our system-so they just have to fill in a few blanks to complete the process," explains Devoe.

QTI makes auto and home insurance processing easier for agents and their customers. It is accessed through The Hartford's Electronic Business Center (EBC), a secure Web extranet used by 36,000 producers and customer service representatives at independent agencies throughout the country.

The Hartford's eSales initiative also uses ACORD XML large commercial standards to eliminate the need to rekey large amounts of property, auto and workers compensation data as part of the application and rating process for middle-market business. It's aimed at improving the speed and ease of doing business by addressing the complexities of middle-market policy applications.

The second broad initiative launched in 2002 was The Hartford's eService program. It runs in parallel with the eSales program and delivers billing inquiry, direct-bill commission statement download, first notice of loss, and policy inquiry, among other services, to agents-either through their own system or through The Hartford's EBC.

Based On XML

The eSales program enables agents to access billing records directly from their Applied Systems' agency management system through the IVANS Transformation Station. First notice of loss and policy inquiry will be added this year.

These enhancements enable agents to instantly respond to policyholder inquiries without a disruption to their workflow. The system enables agents to accept both personal and commercial line records.

Historically, paper listings of all policies paid to the carrier during the month had to be reconciled manually. With its new functionality, The Hartford sends the information electronically to the Applied agency system, and it automatically updates and reconciles the files.

This can save a typical agency 10 to 15 hours per month, and it enables agencies to pay producers on a more timely basis. The policy inquiry feature for new business, renewals and endorsements makes a PDF format of the policy available directly from the Applied agency system using Transformation Station.

The technology foundation of eSales and eService is industry-standard J2EE application server technologies that use both service and message-oriented architecture. The technology employs ACORD standard XML that reuses past investments in The Hartford's core policy administration, claims and billing systems.

"These two programs take core business processes that directly impact our agents and turn them inside-out-looking for improvements that can be tied together but delivered over time," says Devoe.

"We are no longer using information technology just to solve the needs of vertical business silos; now we are looking to solve IT problems at the enterprise level," he says. "More than ever, we want to make sure the pieces fit together and make sense as a group."

Strategy first

Business strategy-not information technology-comes first at The Hartford. "When we undertake large information technology projects, we make sure the technology tail doesn't wag the business dog," Devoe says.

"The dot-com bust took some of the mania away, but human beings still have a tendency to look at technology for technology's sake-to see an exciting solution and then go searching for the problem. Instead, we focus on the business needs first, and then we look to technology to support the business," he says.

How does the insurer keep technology from wagging the business? "You keep asking key questions," says Devoe. "How does this help us achieve our business goals? We do let the technology tail 'tickle' our interest, but we don't let it dictate our business strategy or business investment."

To that end, technology initiatives such as those launched in The Hartford's eSales and eService programs (see "A bevy of eService and eSales initiatives," above) must pass through rigorous internal hurdles before they're implemented.

Those hurdles include four broad strategic objectives for IT spending: profitable growth, ease of doing business, speed to market, and building a positive relationship with distributors.

In addition, no major capital expenditure of any kind moves forward without a formal business case that articulates the benefits, the cost, the time line, and the impact it will have in the marketplace. "We always start with: What is the business objective and how does it fit with our business strategy?" says Devoe. "What change do we want and what's the current state? We talk about payback and business cases with a rate of return that must add up to a favorable market return (for our investments)," he says.

Between the eService and the eSales programs, The Hartford has a lot of opportunity for improvement in the hopper. "It's an evolutionary process and there is no foreseeable end to it," says Devoe. "We will continue to make strategic investments in IT to enhance eSales and eService in 2003."

Together, these two broad initiatives will account for roughly one-third of the carrier's projected P&C IT spending in 2003. "This (spending) is a testament to the importance we place on externally facing, ease-of-doing-business solutions for our distributors," says Devoe.

"We're constantly turning and twisting the industry's Rubik's cube, looking at different combinations of technology that complement and tie The Hartford together with the marketplace. We're proud of the progress we've made, and we're excited about what we can (and will) do next," he says.

Brian S. Moskal is a business and financial writer based in Chicago.

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