The challenges insurers face with handling paper documents have been well documented. Dealing with reams of paper is one thing. Coping within a manual and de-centralized content management scheme is another.The process of printing and mailing policies is both cumbersome and costly, as is storing policies in archived files. For some, retrieving older, existing policies is akin to finding a needle in a haystack.
OneBeacon Insurance Group addressed all these content management issues in 2003 when it activated an enterprise-wide electronic document system developed by Dallas-based Docucorp.
After achieving a return on its investment in about a year, OneBeacon continues to experience ongoing results from Docucorp's solution-a centralized electronic archive and delivery system that enables the carrier to store, retrieve and deliver archived policies through a Web browser. What's more, it also enables OneBeacon, a Boston-based provider of personal, commercial and specialty insurance, to produce high-fidelity, certified copies of original policy documents. The solution also has helped eliminate printing and mailing branch-office copies of insurance policies.
OneBeacon now stores all text, graphics and data related to policy transactions in one central archive. The solution also ensures accurate reprinting of original policies; enables intelligent searches against stored policies; and enables OneBeacon to display, present and view policies in electronic format.
"We had a number of places to store policy forms--it was a conglomerate of systems," states Joseph Zuchowicz, ITS manager of enterprise business services for OneBeacon Insurance Group. "But the content management solution Docucorp offered is able to deliver a rendition of the printed policy transaction in an electronic format and reduce the dependency on paper copies-all in a centralized electronic system."
Asset or liability?
A few years ago, OneBeacon made a list of the inefficiencies that existed within its enterprise content management (ECM) environment.
Similar to many insurers, the list wasn't short. In chronicling the ECM dilemma of many insurers, Needham, Mass.-based TowerGroup published a report in September 2004 indicating that ECM platforms and tools "are a new breed of technology whose potential the insurance industry has yet to realize. Content can either be an asset or a liability. How an insurer manages its content often determines whether the insurer can achieve competitive advantage and drive shareholder value," comments senior analyst Cynthia Saccocia in the report titled, "Enterprise Content Management: Insurance Industry Primer."
Reinforcing TowerGroup's findings was a survey on ECM commissioned the Association for Information and Image Management (AIIM), Silver Spring, Md., which found that 60% of survey participants are still in the "early stages" of understanding enterprise content management.
"There are significant dollar returns with dynamic enterprise content management," says John Bennison, vice president of product development, for Docucorp. "But there is still a struggle on the part of insurers to master ECM. Insurer systems have accumulated, which has been intensified in part by mergers and acquisitions, which adds operating silos. Many of the problems involve inefficiency in connecting mainframe databases with Web delivery. It's an interesting puzzle and I don't know where it's going to end up."
At OneBeacon, the ECM puzzle is being solved. Docucorp approached the carrier through its professional services group in tandem with Bennison's own product development group. The vendor performed a requirement study on OneBeacon's special requirements and discovered that they "pushed us further than we had gone before" as it relates to the specifications of an ECM project.
This mainly involved the carrier's desire to host the program on its mainframe, which houses three terabytes of data, while at the same time offering Web delivery of content.
"We're a mainframe culture and we recognize the mainframe as a mission-critical repository," OneBeacon's Zuchowicz says.
"The mainframe is the main 'horse' for policy issuance, so we wanted to make sure that the solution that would drive our electronic document system was one that would enable us to store content on the mainframe, hosting it on our servers, and at the same time provide Web delivery of content."
OneBeacon wanted to store policy data on its mainframe for up to three years. Docucorp created a storage capacity that leveraged OneBeacon's mainframe system for database and host storage, while using cost-effective optical storage for documents once they exceeded the three-year mark.
Whichever option OneBeacon selected, it was imminent that the content management situation be addressed, and quickly. "Document management had become an expensive process, and we had to drive down expenses," says Zuchowicz. "This included paper and postage costs, printer supplies and printer maintenance. Each branch office had paper files and we had to pay expenses to have them indexed and drop-filed."
Illustrating the problem, if OneBeacon experienced a problem with policy output, it took three to five days to determine the day the problem occurred, the line of business affected and whether the problem impacted one or more of its independent agents. This process now takes a few hours, and because of faster problem resolution, OneBeacon can quickly detect, isolate and correct issues before they affect other processes.
As OneBeacon identified vendor partners, Docucorp emerged as a leading candidate because, for starters, it had a pre-existing relationship with the insurance company. Prior to implementing Docucorp's content management solution, OneBeacon processed policies through the vendor's flagship solution, Documerge.
The solution supported printing and distributing policy copies to insureds, agents and branch offices. The trouble was that staff had to wait several days for a branch office to receive its copies. Branch staff would then drop-file paper copies in file rooms, where dedicated staff would manually retrieve policy documents as needed for underwriters or claims adjusters.
To streamline the vendor selection process, OneBeacon relied on an internal ROI spreadsheet to analyze options. The carrier identified 30 functional items as the basis for vendor selection. Docucorp answered the bell on most if not all of the requirements.
When the project commenced, Docucorp began working with OneBeacon's internal IT department. "OneBeacon's IT staff entered the picture at the outset," Docucorp's Bennison states. "They had a role with the configuration and design of the system. Most of our involvement was engaging their data base administrators as well as data storage and host support personnel."
In addition to the role of its mainframe, OneBeacon also wanted flexibility in accessing policy documents by employees, agents and customers.
"We wanted to provide the best rendition of policies for internal staff," says Bob Bynarowicz, assistant vice president, internal service operations, for OneBeacon. "Through use of water marks, we would be able to make it clear that policy copies were not the certified original. But at the same time, we wanted to have a rendition of the certified original policy in certain situations.
"One of those would be if we were involved in litigation and needed to go to court," he says. "In this case, you would want a policy that was close to the standard original. You also would need to locate that policy quickly. Under manual processes, there was no guarantee we could locate it in a timely fashion if we ever had to appear in court."
Undoubtedly, OneBeacon has significantly reduced the amount of time spent locating misplaced or lost files, and creating back-up or duplicate copies. Customer service for policyholders and agents has improved significantly as a result of immediate access to the electronic policies and bills.
The reduction in producing and distributing paper policies provides the largest payback, with an estimated savings of $650,000 from 2004 to 2005. "The bulk of these savings comes from eliminating postage, and not having to send out service copies of policies to branch offices," says Bynarowicz. "We also saved money in that with the electronic document system in place, we were able to upgrade to a much faster, high-quality printer. As a result, we could eliminate two lower-quality printers that had supported our efforts."
The declining need for off-site paper storage is an additional benefit that will offer long-term financial savings.
Currently, OneBeacon processes approximately 6,000 requests per year for underwriting files from off-site storage. There are now more than 100,000 underwriting boxes in storage, at a cost of $181,000 per year.
In addition, costs to pull individual files and later replace them are estimated at $28,000 per year.
Although these costs will not be recouped immediately, OneBeacon will see them fall significantly as the content management system stores the documents, eliminating the need to move them to off-site storage, says Zuchowicz.
Finally, the reduction in floor space in branch offices and central files in OneBeacon's home office will continue to decrease, providing hard-dollar savings in facility requirements.
"It also helps us serve our producers and insureds better by offering a state-of-the-art technology solution for immediate access to policy information," says Zuchowicz.
OneBeacon has expanded distribution of electronic records to its agent base, enabling producers to obtain weekly or daily registers of their policy transactions electronically the next business day.
The insurer has also implemented an agent print opt-out program to further reduce paper and postage expenses. Agents have the option of receiving their transactions electronically through the content management system or in paper reports.
This is essential since a handful of agents might not be equipped with the technology to fully leverage electronic policy delivery.
Moving forward, OneBeacon hopes to add commercial lines to Docucorp's platform in 2005-now that personal lines policies have migrated to the new platform.
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