Converting mail and other forms into digital documents can help free carriers from the mountains of paper that threaten to choke the industry.Despite huge corporate investments in personal computers, electronic mail and document scanners, the paperless workplace is still a pipe dream. Indeed, the insurance industry in particular is drowning in a white sea of computer-generated documents, customer correspondence and faxes.

But some carriers, such as San Antonio, Texas-based USAA, are using document imaging and management technologies to eliminate the paper morass. Every day, USAA adds 250,000 documents to its massive database supporting property & casualty customer service. The system contains more than 400 million documents consisting of 2.5 billion pages of information.

"The top reason why we developed the system was to improve customer service," says Greg Schwartz, senior vice president, enterprise solutions, for USAA Information Technology Co. "It's a cost-effective way to store data."

Although USAA can claim leadership among carriers in converting paper documents to digitally stored images, it is not alone. Farmers Insurance Group recently opened a 100,000 square-foot customer care center in Oklahoma City, which includes a document process center.

The center is responsible for processing all claims information sent to the company by policyholders, converting paper to digital documents that are then attached to a policyholder's electronic claims file.

"When a customer calls our 24-hour help line, the claims handler who has access to the claims systems can call up that information," says Frank Soldano, assistant vice president of claims strategic initiatives, for Los Angeles-based Farmers.

Cost considerations

Although instantaneous access to policyholder information certainly is one of the chief benefits of the technology, Primerica Financial Services has leveraged the technology to reduce expenses for servicing life policies.

The Duluth, Ga.-based company receives about 30,000 life insurance applications every month. The applications and their supporting documents are scanned in using Eastman Kodak high-speed scanners-roughly 2 million pages per month, says Mark Beauchamp, vice president of the company's document image center. The documents are stored on IBM's ImagePlus system, which has 150 gigabytes of storage, for about a year.

Primerica developed its system to reduce its staffing needs for inputting policy applications. "We initially hired temporary staff, but we had cost, training and quality-of-work issues that we had to deal with," Beauchamp says.

New policy applications are now scanned in when they arrive, and Primerica sends the hard copy to an outside provider for data entry services. "Because a life insurance application is hand-written, the quality of the image currently is not acceptable, so we still have data entry," he adds.

Spending spree

Spending on document imaging and management technologies by carriers has more than doubled since 1997, rising from $2.2 billion to an estimated $4.68 billion this year, according to Stamford, Conn.-based GartnerGroup.

The GartnerGroup study, which was commissioned by the Association for Information and Image Management International-a Silver Spring, Md.-based trade association-concludes that document management technologies are "becoming commodity-like and being driven down to workgroup systems as vendors make more aggressively priced offerings."

That certainly wasn't the case when USAA launched its ground-breaking program. In 1989, USAA, in partnership with IBM Corp., developed a large-scale imaging system that became the foundation of IBM's ImagePlus MVS/ESA mainframe product. "We have leveraged that initial investment greatly and we still feel it's a critical component in our IT arsenal," Schwartz says.

USAA has a centralized mailroom where all pieces of incoming mail are opened by a machine. A "mail analyst" then assembles the documents and runs the material through a high-speed scanner, which temporarily "caches" the information on a server. Documents are indexed by identifying-and entering into the system-attributes, such as customer number, date received and a form code representing the type of service being requested or the type of business being transacted.

"If it's a document that we've sent and it's being returned, it will have a bar code on it that automatically provides indexing information," Schwartz explains. "The bulk of indexing is identifying the member, his or her location, and the type of business the member is trying to transact. From that point, the image is routed electronically to the proper area for processing."

After the scanning in completed, the attribute information and image are routed to the ImagePlus central repository, where they're stored on magnetic disks. Once stored, an image is retrieved using workflow software in less than five seconds.

Once a document has been serviced, its status changes from a work in progress to a filed document. At that point the document migrates to optical library storage and will remain there until its active period expires.

The optical platters are then ejected from the library and stored in case a need arises in the future to access a document. When a request is made to view a document, the platter is located and loaded onto a stand-alone reader.

The bulk of USAA's imaged documents stored in the P&C policy service system are computer-generated outgoing documents for policy service. "Roughly 80% is high-volume mainframe print data, such as policy and statement information," Schwartz says. The system also electronically stores email, in-bound faxes and photographs.

"Our system has the ability to read and route e-mail generated from USAA's Web site," says Frank Rocha, USAA's IT architect for workflow and document management. "Our highest volume areas are capable of electronically delivering 60% of the e-mail with over 97% accuracy, without human intervention."

Growth and expansion

USAA's initial policy service image application is now just one of many imaging applications throughout the organization.

For example, USAA Management Co. began imaging all incoming mail related to processing mutual fund applications in 1994. The system was later expanded to support all mutual fund and brokerage operations and currently stores more than 20 million documents.

Aware that its needs have significantly grown since the initial policy service system was built, USAA is evaluating the future of its investment in the system and has determined that it will require a reinvestment to augment the technology.

"Because of the efficiency of the technology, we're convinced that we won't have to do a massive conversion to a new system," Rocha says. "We want to leverage this system and build a plan to augment where we go in the future."

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