In the insurance industry, a great deal of emphasis is placed on customer relationship management, and rightly so. But as Matthew Piroch, chief information officer for Highmark Life & Casualty Co. sees it, CRM would be difficult to achieve without ERM-employee relationship management.Pittsburgh-based Highmark Life & Casualty is a provider of life, workers' compensation, stop-loss and disability insurance to 2.2 million individuals through group policies. The company was established in 1990, with Piroch coming on board in 1998 as manager of relationship management. He was appointed CIO last May.
A Head Start
Assuming the position of relationship management director provided Piroch a head start in constructing the internal efficiencies crucial to optimally serving customers-online or offline.
Today, Highmark is reaping the dividends from that effort. From the beginning, Piroch reasoned that before customers could be properly serviced, the cross-functional components within the corporation had to be unified.
The relationship-building was necessary to fully align Highmark's information technology division and its various business divisions.
"Sitting as the CIO of this organization, my mission is to know and understand the businesses and our customers and how IT efficiencies can fulfill their needs," Piroch says.
"Throughout much of the 1990s, the infrastructure had not been in place for these two groups to work together optimally. IT had to understand the business part intimately.
"Now, there's a great rapport with the business units, and IT understands their needs. We are improving our business processes and our employees are more attuned to working together to better serve our customers."
Highmark is is in the process of creating what Piroch calls SAP (Single Source Access to Data and Process Change), which eliminates the data redundancy produced by years of operating from multiple legacy systems. This effort is being carried out within a corporatewide insurance processing system known as OPUS (Opportunity to Provide Unique Service).
With apologies to the creators of the movie "Mr. Holland's Opus," Mr. Piroch's OPUS is proving to be no minor production.
For starters, Highmark has an internal IT division that consists of about 70 individuals. This conglomerate is broken out into eight sub-units: Help desk, relationship management, operation staff, LAN (local area network) administration, security, data base reporting, legacy development and planning, and architecture.
All of these sub-groups serve as the conduit that fosters cooperation across the entire enterprise-acting as an enabler for Highmark's many corporatewide electronic initiatives.
Highmark's OPUS might not be a musical arrangement, but as Piroch would readily admit, its capabilities are music to the company's ears-not to mention its customers.
Highmark Life & Casualty was formed in 1990, and over a 12-year period witnessed a premium growth spurt from zero to $325 million. The company has 525 employees who service customers from 16 regional offices spread throughout the country.
Similar to many insurance providers that strive for aggressive growth, Highmark Life encountered a predicament: rapid growth produced an ongoing accumulation of processing systems and manual redundancy, which in turn undermined overall efficiency.
Many of these systems were the product of various acquisitions consummated over the years.
"If you're using multiple systems to manage policies and claims, deriving information from them may be inefficient," Piroch explains.
"The information may also be inaccurate. Our mission was to get to a single source of information and eliminate our manual processes to provide better and quicker service to our customers."
Highmark didn't have time to nurse electronic initiatives one at a time. Instead, Highmark embarked upon several electronic-driven programs simultaneously, which Piroch likened to "replacing a tire or two on a car while the car is running."
The group confidently pushed ahead with this strategy because it had developed a successful track record for achieving ROI benchmarks. The majority of these programs are also executed on-time and on-budget.
The Opportunity to Provide Unique Service-or OPUS-is the nucleus of Highmark's data integration and customer service strategy.
OPUS was inspired by Highmark's quest to consolidate the multiple insurance processing systems through an integrated Web-based solution. The goal was to integrate claims handling, policy underwriting, billing and commission functions to better support rapid business growth, Piroch explains.
Built on IBM's WebSphere Application Server, OPUS was developed as a processing infrastructure to address all these functions. Piroch realized that Highmark required third-party support in the development of a specific insurance platform to drive this effort. It ultimately selected Emeryville, Calif.-based WorldGroup Consulting, which developed for a J2EE application based on the WebSphere software.
Beginning with workers' compensation claims processing, OPUS is already deriving results for Highmark-by helping to reduce the number of task handoffs that compromise smooth claims processing.
The evolution of the OPUS will continue throughout 2003, with efficiencies designed to address underwriting, billing and commissions. The key to its success, Piroch believes, will be the internal group effort based on solid relationship management.
"Every department in the organization provided input in the design of OPUS," Piroch explains. "The claims department drove the effort. Before this effort began, claims was not really aware of how much influence it had on the other aspects of our business. Everyone now better recognizes how their interactions can dramatically impact our bottom line."
Name: Matt Piroch
Company: Highmark Life and Casualty Co.
Years with company: 5
IT mission: To create a single source of data to provide better and quicker customer service
Net Written Premium: $325 million
Sales Force: Undisclosed
Major Business Lines: Life, workers' compensation, stop loss and disability insurance.
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