The insurance industry, long saddled with paperwork-intensive processes, has become prime turf for enterprise content management (ECM) solutions. ECM is the catchall phrase for what was originally a plethora of solutions, ranging from imaging systems to records management.To carriers seeking to expand their business lines and speed up processing at as little additional cost as possible, content management may be more than some glitzy new technology; it may fundamentally change the nature of the insurance business.
But this change will likely only happen one business process at a time.
Such competitive pressures have been behind Anchor General Agency Inc.'s latest drive to increase the automation of its forms processing.
Anchor General, a San Diego full-service insurance agency providing products in the non-standard automobile insurance market in Arizona and California, seeks to expand to new states.
The decade-old company, which currently writes about $90 million in premiums a year, turned to ECM to facilitate this new opportunity by improving the speed with which it underwrites and approves applications.
Because paperwork still afflicts many organizations, analysts agree that the ECM market is a booming one.
"The ECM market is a muddy mix of players and a muddy mix of terms," says Cynthia Saccocia, analyst with TowerGroup, Needham, Mass.
"Often insurance companies buy applications on a silo-by-silo basis. They'll lack integration across processes or even similar systems. But we're now seeing the development of business process management philosophies or managing entire processes. That requires technologies to deal with the content that affects decisions along the process," adds Saccocia.
Fueling a spending surge
According to a study by Forrester Research Inc., Cambridge, Mass., growing compliance and governance requirements are fueling a spending surge in ECM, leading to a 19% compounded annual growth rate that will outpace the overall software market through 2008.
Anchor General had been running a content management system from Costa Mesa, Calif.-based FileNet Corp. since 1999, which provided a partial degree of automation, explains John Amat, vice president of Anchor General.
The agency plans to bring the vendor's latest release into production by February to expedite the movement of documents between its network of independent agents and the carrier's underwriting systems.
"We wanted to offer a service to our agents, so they can issue the policy right on the spot, and the insured walks away with all the information they need at that point," says Amat.
"Once the policy is issued at point of sale, we want to expedite the file and get it processed through our operation a lot quicker."
The challenge is to streamline Anchor's document management and workflow process-especially as it moves through underwriting, says Amat. "As of today, once that policy comes to our door, it is touched up to 47 times," he explains.
Anchor is working with an implementation service, ICI Solutions, Chandler, Ariz., to implement the FileNet P8 content management system. The project is geared "to help us realize faster processing time by reducing the number of times insurance underwriting is handled," Amat says.
This will take much of the existing paper-based processing out of the workflow. Anchor "processed the paper, and at the end of the process, they captured it for follow-on retrieval," says Walter Bitaut, vice president of operations for ICI. "Customer service had some efficiencies and capabilities with that approach, but the process that went through underwriting, claims and endorsements was still paper driven. Filing, tracking and accessing documents were all part of those same problems they had with paper."
This drastically reduces, or even eliminates, the number of times a document gets touched as it moves through the organization. "Once a policy gets submitted, we'll underwrite that policy and return it back to the agent, so it's already been underwritten, and we don't need to touch it once it comes here," Amat relates.
A business rules engine will automatically move most applications to approval. "Underwriting doesn't need to touch it once they retrieve their policy in our office," he says. "Once the application has been approved, all they have to do is fax their signature pages to us, so we can just marry them up and process them accordingly."
ICI's Bitaut explains that the system automates the creation of response letters or Word documents that include bar codes that specify the required information. That letter is stored into the system so a customer service agent can quickly answer a phone call if an applicant is wondering about the status of an application.
"When information comes in, that form letter will be the cover page, and that bar code will automate the marriage of the physical document to that file. So the next time the underwriter pulls up that work item they see the initiating application and any subsequent information they were looking for," he says.
Business drivers
Efficiency and underwriter productivity were just part of the benefits Anchor sought through its content management implementation.
The company's decision-makers were also eyeing a rapidly changing business environment. "They had some specific mechanisms in place to help automate a paper process, but their real driver was to stay competitive," says Bitaut. "Their corporate pain points were to keep up with the Joneses, and stay competitive in a marketplace where costs are constantly getting driven down."
Part of this competition is, quite simply, at the agent level, where "the first carrier to underwrite a policy 'wins,'" says Bitaut. "It's very important to turn such an application from an underwriting perspective. The answer is straight-through processing, which means moving an application through the process, without human intervention if possible."
Reducing risk and exposure to the business was another reason Anchor sought to upgrade its enterprise content management system.
"From a new business perspective in underwriting, they want to ensure they're underwriting real cars and ensuring they're closing out claims," Bitaut says. In addition, "they want to enforce HIPAA compliance, ensure that things are kept secure and avoid the penalties associated with allowing data like that to be shared."
Another business driver was the effort to enter new markets, Bitaut continues. "They needed to extend outside of their geographic area but in additional markets, with new product offerings, without necessarily adding new full-time employees or more people in the process," he says. "It also means being able to make life easy for customers and agents. Everybody should find it very easy to do business with Anchor General."
New technologies "are going to change the way insurance companies are interacting with their customers," says TowerGroup's Saccocia. "For example, you have customers who can take pictures of damage with their camera phones," she says.
"These photos need to be routed and married to the claims form. With external technologies moving so quickly, can insurance companies keep up? That's the challenge," she adds.
Content is a major influencer, and it will continue to be a focus beyond traditional imaging of paper forms, says Saccocia. "We're talking about dealing with electronic forms, fillable forms and dynamic forms and information."
For Anchor General, meeting this challenge will pay off in dividends in quicker time to market, more satisfied customers and more streamlined operations.
AT A GLANCE
Company: ANCHOR GENERAL INSURANCE AGENCY INC.
Location: San Diego
Business: Full-service insurance agency and program administrator that operates in California's and Arizona's non-standard auto insurance markets
Employees: 180/60 producers
Revenue: $90M in premiums annually
Business Case: Competitive pressures, desire to expand to new states
At issue: Ability to streamline document management and workflow processes
Solution: FileNet P8 content management system enables Anchor General to access and manage all forms of content and automate records management to help meet compliance needs.
Joe McKendrick is an author and consultant specializing in information technology, based in Doylestown, Pa.
