When it employees at Cincinnati-based Great American Insurance Co. got wind late last year that their new CIO would be Piyush Sing, former CIO of the Peoria, Ill., multi-line P&C carrier RLI Systems, they probably took a deep breath-rightly assuming that big changes would be coming in how the company uses technology to conduct its specialty commercial lines business. Sing's reputation for building front-end technology to match his previous company's unique requirements (RLI's motto was to provide "Fundamentally Sound Innovation" to the insurance industry) preceded him.As expected, Sing came to Great American Insurance with a similar plan, and a vision to overhaul the 130-year-old company's front-end applications for insurance processing with a service-oriented architecture (SOA) and Web services approach. Especially critical to Sing's vision: the ability to manage the appointments, interactions and state-by-state compliance requirements of a U.S. distribution network comprised of 8,000 active agents.
Managing agent appointments and associated regulatory reporting is a challenge for any carrier, but especially so for Great American Insurance, which seeks to garner and maintain robust business relationships with independent agents who sell the company's specialty property and transportation lines, specialty casualty lines and specialty financial products.
While most licenses require company or agency appointment by each respective state's regulatory body, the variations in how these state-by-state reporting requirements are conducted add to the challenge.
Jeff Yates, executive director, Agents Council for Technology for the Independent Insurance Agents and Brokers of America, Alexandria, Va., admits that both agencies and insurance companies do not like the inefficiency of the current state process, "but they are focused on addressing the issue with the state regulators and trying to get more efficiencies from the states."
BROADER ISSUES
And while it may be a given that grassroots efforts will continue, companies such as Great American Insurance face an uphill battle that is broader than simply meeting and anticipating agent appointment requirements.
So with both efficiency and accountability in mind, Great American Insurance examined its legacy systems (mainframes running COBOL, DB2 and Internet Connection Sharing technologies) and its associated applications, some of which were used strictly for agency appointments. Organized as a management company with a portfolio approach to systems and services, Great American Insurance also had business units that had created their own relationship management applications connected to a database. These one-off applications provided various business teams with the ability to conduct long-term planning with producers, create individual marketing plans and perform competitive analysis.
"We knew we needed something that would better facilitate agency appointment processing and compliance requirements, and at the same time offer a tool to our business units and underwriters to improve management of our independent agents," says Cary Cain, manager of Great American Insurance's producer relationship project.
As Great American Insurance evaluated potential solutions, the carrier also took into account its longer-term goal-to allow its agencies access to improved customer self-service.
A host of vendors came forward, many offering off-the-shelf packages that could be configured via custom code to accommodate some of Great American Insurance's requirements.
"We require configurability," admits Cain, "but with an open, flexible architecture so that maintenance isn't an issue for us."
FRAMEWORK APPROACH
Ultimately, the company teamed with PlanetSoft, an Aliso Viejo, Calif., provider of process management framework technologies and back-end systems for the insurance industry. Four full-time team members and Great American Insurance's end users worked with the PlanetSoft offshore development team to define the carrier's requirements. After an eight-week collaboration process, the PlanetSoft team headed to India to create the technology framework for which Great American Insurance will be able to customize its broader plan to adopt a new agency management platform.
The technology footprint that makes customization possible does so without the use of code, notes Sudhir Bajaj, PlanetSoft's CEO.
"We think of data as a strategic means to an end," he says. "We affect application behavior through data. Screens are a function of data, business rules for processing are a function of data, even data schemas are a function of data. We can change an application's behavior...by changing data instead of code."
The idea that data is at the core of insurance operations is a familiar one to Matthew Josefowicz, manager of global insurance at Celent, a Boston-based research firm. "Its raw material (risk information) and core products (policies) are just forms of data. Treating data as a strategic asset means ensuring that risk, customer and operational data are clean, accessible and transparent within the organization," he says.
For Great American Insurance, having PlanetSoft do the initial build-out of the data framework means up to 80% of the vendor's work on the end product will be configurable by Great American Insurance's team-to exact specifications, Cain points out.
MORE COMPLEXITIES
The many specifications that are part and parcel of this framework, i.e., state-by-state agency appointments and agent customer self-service, are made more complex across business units.
"Underwriters in our equine division may be holding different information about agents than does someone in the property and marine area," points out Cain. "Agents in our agriculture business division are interested in things related to farming, people in ocean marine are interested in cargo, ships and overseas transport."
With a solid database at its core, business rules will facilitate presentation to individual users in each business unit based on their unique requirements.
And, under Sing's direction, Great American Insurance's strategy is to make this application the single source of information about any of its agencies.
HIERARCHY STRUCTURES
Bajaj says Great American Insurance is not the exception: Most insurers maintain hierarchies within agency management systems. "These hierarchies are relatively unique animals," says Bajaj. "Each company has its own hierarchy structures, and each one of those has its own specific structures and so on."
Being able to drill down into these hierarchies to pull agent-specific data up and out from various business units will do more than simplify the agent appointment reporting process; it will shorten the appointment lifecycle.
"The business rules for state-based licensing or processing are all a function of data," explains Bajaj. "Great American Insurance can follow the trail. The agent submits his first initial application, the customer service representative picks it up, it triggers a background check, a follow-on teleinterview, etc."
Adding certain fields and tables via a business object model, that process can be altered at the carrier's site from one agent to another-without writing code.
"Whenever you write code, no matter how simple it is, there is a chance you'll have progression errors," he adds.
Cain reports that the technology fits well into their environment. "We'll be able to re-utilize our style sheets and user interface guides, and the end product will look like something we developed specifically for us, as opposed to customer relationship management solution XZY," he says.
As efforts continue on the agent appointment/reporting application, the carrier also continues work on its larger IT overhaul. Having realigned some of its internal staff, some 70 employees on multiple teams are focused on moving Great American Insurance's claims, policy administration, billing and producer masterfile applications to the new Web services/SOA environment, says Cain.
With an expected implementation in Q1 2007, and up to 400 users who will access the system once up and running, Cain isn't worried about hitting the target.
His biggest challenge so far has been grasping the myriad uses of producer information within the organization.
"We want to make sure we've accounted for all the different uses and organizational relationships that are expected to be maintained within the new system," he says, "and be able to streamline [agent] appointment reporting, no matter how complicated the state's requirements."
