Environmentalists should be happy about the new document scanning and imaging system at Prudential Group Insurance-because it's saving a lot of trees. The insurer's disability insurance customers should be pleased too-because it's enabling the company to process their claims more quickly.What had been a manual, paper-intensive process of receiving disability claim documents via fax machine or mail has been replaced by a nearly paperless operation.
Documents are now captured as images via a toll-free fax line, and routed automatically to the appropriate claim processing workstation. Mailed claim documents are now directed to a facility in Fort Washington, Pa., which scans them for several lines of business at Prudential Insurance Company of America, Newark, N.J., including disability.
Before implementing the system, the majority of disability claims came into the company into a centralized mail and fax room in Parsippany, N.J., and employees working in the mail room had to piece everything together, says John Barilla, vice president of disability management services at Prudential Group Insurance. The documents had to be sorted, stapled and distributed manually to claim handlers.
That was a huge task. Approximately 2,100 hours per month went into opening and sorting the 100,000 new disability claims that Prudential Group Insurance processed each year. The company-which manufactures and distributes group life, long-term and short-term group disability, long-term care and corporate- and trust-owned life insurance-generates more than 1.5 million documents annually.
"There was actually too much paper for the staff to handle," says Ed Minogue, senior vice president at the company.
In addition to the existing paper load, the company was projected to grow 40% in two years-so the situation could only get worse.
"Information wouldn't get out to the claims handlers quickly enough, or it would get delivered to the wrong person, or it would get lost," Barilla says. "The other challenge was finding the documents-knowing where they were, or if they came in or not."
With the company's expected growth and to control customer service problems associated with inefficient workflow, Prudential decided in November 2000 to implement the document scanning and imaging system and integrate it with the company's internally developed disability claims management system.
"We realized (this technology) would not only make people more productive, but we could also control the environment and provide a higher level of service," Minogue says.
MORE CONTROL
In March 2001, Prudential Group Insurance piloted the new technology, which includes scanners and scanning software for mail, fax imaging software for faxes, optical and image character recognition software, and document management and workflow technology.
After redesigning roughly 25 forms to be read more easily by the OCR software, the company fully implemented the system last July.
Not only does the technology create electronic images of the documents-thereby reducing paper-it also provides better workflow and management control, according to Barilla. For example, disability claim managers are alerted within the company's claim management system when a document comes in. "It comes up in their diary system in red lettering, so they know they have to act on it," he says.
Although most of the redesigned forms are automatically routed, some contain information that can't be deciphered by the software, requiring manual verification and indexing. In addition, some old forms and documents such as letters still come in and require manual intervention.
Management did not have the same level of control when paper claims came in through the centralized mailroom, Barilla says. With this technology, "everybody in management can view that we have 'x' number of documents in the viewer that need to be assigned. So we can actually see what we have to get done by the end of the day."
The company's expectations-for higher productivity, more process control and better customer service-have not been disappointed. After six months of using the system, Prudential Group Insurance had saved $500,000-by not having to increase staff to handle growing mail volume, by reducing the amount of mail that has to be processed, and by not having to retrieve misplaced documents or ask customers to resend them.
"In the majority of cases, our claims are (now) online within one day," Minogue says. "So we've taken a three- to five-day process and shortened it to one day."
Not only does the company capture claims more quickly, it is also able to process them more quickly. "We've established a goal to make decisions within five business days for 90% of the claims we receive," Barilla says. That's not an easy goal to meet, he admits. "But this technology has helped tremendously-because you know the document is here, you can view it, and the system is automatically populated (with data). You don't have to spend time doing that. You can spend time making the decision that needs to be made."
Despite the impressive results, Barilla admits there have been some growing pains associated with automating the disability claims process. Along with the implementation, Prudential Group Insurance initiated a mass mailing to its employer groups to provide them with the redesigned forms and an explanation of the benefits of using them.
NOT ALL EASY
But not all customers adopted them quickly. Prudential continues to encourage specific clients who are not using the appropriate forms to use them. And "we're constantly watching for new customers using the wrong forms," Barilla says. "We're making sure we address that immediately."
In addition, the 25 employees who worked in the Parsippany mailroom have been redeployed to a team that identifies documents requiring verification. Adjusting to new jobs and more management oversight has been a challenge for them, Barilla says.
"This is a group of people who were opening mail and distributing it every day and now they're spending time at terminals verifying documents and redirecting them if necessary," he says. "They've all risen to the task quite well."
Like most companies, Prudential Group Insurance is asking people to do more with less, and it's important that a company invests in technology solutions that will enable people to meet the higher expectations being placed on them, Barilla says. "This technology has demonstrated to people that we're serious and committed to working together to do more with less."
