In a process-intensive industry such as insurance, there is no shortage of interest in business process management. Lately, as insurers look past the economic carnage of the past few years and toward what many hope to be a sustained period of growth driven by new digital capabilities and processes, there's renewed attention on BPM to help get them there.

With its emphasis on automation wherever possible, BPM has the potential to improve many core areas of the operation, especially claims management, policy admin and underwriting. Vendors have been only too happy to oblige, and lately have released a range of tools intended to help carriers better streamline, automate and digitize their operations. However, while BPM suddenly is becoming very popular in many quarters, analysts and practitioners acknowledge it's going to take time and work until its full potential is realized.

BPM has been moving in fits and starts. Efforts to boost BPM in its various forms took a back seat in most companies over the last four years, as insurers scaled back expenditures and programs to get through the recession. But now, as business picks up, so does a resurgence of interest in BPM. In a new BPTrends survey of 399 companies, 31 percent considered BPM to be a major initiative, up from 19 percent in 2009 and 28 percent in 2005.

Along with replenished budgets, a more expansive view of BPM is taking hold, reaching well beyond its original roots of content management and workflow. Now, BPM systems and methodologies touch upon systems integration, event processing and even actively aligning technology goals with those of the business.

"BPM tools and methodologies evolved initially from being just document-focused workflow systems in the early 90s into products that were much more functional and flexible," says Vinay Kurup, principal of consulting services for insurance at Capgemini Financial Services USA. BPM as it exists today includes "better integration capabilities, more diverse server and client platforms, and some basic process modeling and process-monitoring tools," he says.

Increasingly, BPM is delivered as part of technology suites rather than as standalone tools. The BPTrends survey concludes that BPM efforts are gaining maturity, with offerings that incorporate process modeling tools. About 37 percent of respondents were using BPM suites, up from 26 percent in 2009.

This movement toward well-integrated tools and suites has been emerging specifically in the insurance industry. "We're seeing capabilities now being built into core system solutions, including claims and billing," says Ben Moreland, senior analyst with Celent. "For example, just about every policy admin vendor today offers a workflow capability. That's not going to solve heavy BPM, human-laden claims processes that touch multiple systems. But it is giving more configurable solutions to carriers' business analysts to more easily do high-level design of the processes themselves."

BPM solutions now offered by vendors emphasize customer experience management. "A customer's perception of an organization is built as a result of their interaction across multiple channels," Kurup says. "New BPM solutions tend to offer point solutions for specific customer-facing functions such as, but not limited to, sales force automation, customer analytics and campaign management."

The insurance systems vendor community is moving in the right direction as it pertains to BPM, but more work may be needed before offerings can be fully integrated into carriers' enterprise systems and processes. "It's been difficult to grab some of the 'expert' tools and plug it into our existing environments and existing workflows," says Greg Ricker, CIO of Atlantic Casualty Insurance Company. "We find it challenging to plug those pieces in." Instead, Ricker says his team has been able to interface best-of-breed or custom-built BPM applications to the company's policy, claims and accounting systems. "I would say the tools are not where they need to be, but they're getting better," he says.

The challenge is integrating BPM innovations within legacy systems, as well as adapting new technologies or methodologies into outmoded or well-entrenched processes. "Insurers are burdened by their old legacy systems," Kurup says. "They still view BPM as more of a wrapper around existing legacy investments," however, this thinking is changing, he adds.

Business Drivers

Insurance executives and analysts agree that, ultimately, the key to a successful BPM initiative is that it be driven by the business rather than IT departments, which have been the traditional purveyors of BPM.

"Business processes should be owned, defined and managed by business," Moreland says. "It's starting to happen a little bit, with the advent of cloud and other capabilities. Some of the vendors-now being able to push some of the workflow process development into the business analysts' hands-are just using IT for the integration and deployment aspects of the system."

Because BPM tools and methodologies are employed to address specific business problems that may exist deep within individual business units or departments, such as handling a first notice of loss, or booking a new policy, process automation or streamlining activities tend to be addressed deep within individual departments, versus at the enterprise or corporate level. Thus, enabling BPM with a broad brush stroke across the enterprise is often difficult if not unfeasible.

As a result, many insurance industry BPM projects are addressed incrementally, on a department-by-department basis. At Grinnell Mutual Reinsurance Company, for instance, the team leading the BPM effort has been implementing workflow automation and process improvements one department at a time.

"We went from department to department as we implemented their processes," says Martina Latimer, manager of enterprise content management and business intelligence for Grinnell. "My team goes in and analyzes workflows and automates business processes." The company has been gradually bringing its departments on board with Hyland Software's OnBase BPM platform.

BPM efforts are also highly departmentalized at Atlantic Casualty. "We do not have BPM corporate-wide," says Ricker. "It's being handled more on a per-department basis, because of the specific areas of focus. Underwriting is really driving their own BPM, and the claims folks and the external reporting people each drive their own."

Even within the same company, no two BPM efforts are alike, and the business motivations for BPM may be just as diverse as well. Atlantic Casualty's underwriting department, for example, saw BPM as a way to better deliver insights from its data warehouse and business intelligence solutions to decision makers. "They're really trying to pay attention to what's being quoted and written and what our hit ratios are," Ricker says.

At Grinnell, the need for BPM was two-fold. The first driver was a need for more comprehensive business continuity. "We have a very high average tenure," Latimer says. "Among 700 employees, if you have even 10 percent of our staff retiring in the next five years, and we anticipate about 20 percent retiring, that's a lot of people walking out the door with knowledge about your company. We needed to not only be able to automate processes, but standardize them, and document them."

The need for a more comprehensive disaster recovery was the other driver. "We had a big repository for all our back-scanned images, with about nine million documents sitting in a repository that we used," Latimer says. "We needed to become paperless because of disaster recovery and retention rules. Four years ago, if this building were to blow away, the company wouldn't survive. We were too paper centric. There was no automation in any of those processes."

Ultimately, no matter what the motivation, an effective BPM system will capture the collective knowledge and expertise of the company, digitally embedding years of experience within processes that previously may have walked out the door.

"The greatest benefit of BPM is to take tribal knowledge embedded across insurance organizations and translate those into rules-based, event-driven business processes," Kurup says. This simplifies organizational complexity and improves productivity, he adds.

As a result, processes become less dependent upon individuals carrying around knowledge in their heads and more baked into the organization's collective knowledge.

Joe McKendrick is a writer and consultant specializing in information technology, and a regular blogger for

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