They say sharing is good, but try telling that to insurance executives overseeing individual business units. Actuaries, underwriters, sales and marketing executives and claims adjusters have long regarded their departmental knowledge as sacrosanct, with the thought of sharing that information akin to giving up one's first-born.Perhaps out of necessity, this cloistered approach to knowledge-sharing might be loosening its territorial grip. Keeping departmental knowledge close to the vest might protect a business's so-called secrets, but reciprocally this approach also prevents a business from tapping into the knowledge that resides within other corporate units, industry experts relate.
Take, for example, the overall state of employees' knowledge of corporate strategy. In a survey conducted by Bermuda-based global management consulting firm Accenture, employees role in executing corporate strategies is considered weak, with only 12% of respondents indicating that more than 75% of their workforce fully understands the company's strategic goals. Meantime, just 17% indicated that more than 75% of the workforce fully understands how their jobs contribute to the company's achieving strategic priorities.
Decision-based strategies
In essence, the lack of understanding is often driven by lack of accessibility to vital corporatewide information.
"In the past six months, several insurers have told me that knowledge management investments have become a priority to them," says Andy Liakopoulos, senior manager, human performance practice, for Accenture. "It's part of a movement many are taking toward decision-based strategies in place of process-based strategies."
The shift to decision-based models, and with it demonstration of enterprise knowledge management (EKM), has been an exercise borne of necessity. For one, underwriting disciplines have suffered at many insurance companies. As a result, many insurers have identified knowledge-based strategies as a solution.
Insufficient underwriting isn't the only culprit. Global insurers have faced a thinning of the ranks as a growing number of senior executives now take early retirement, Liakopoulos explains. "As these executives walk out the door, there's a lot of intellectual capital that leaves with them." As the supply of knowledge is depleted, many junior-level people must be trained to get up to speed on best practices within the organization, he adds.
It's not as if insurers have the luxury of sloughing off training with the hopes that junior-level employees will eventually flourish. Solid training leads to productivity, and these days productivity is a major priority to insurers, says Kathy Harris, senior analyst for Stamford, Conn.-based research and consulting firm Gartner Inc.
"Capturing, managing and archiving information over the years reaches a point where insurers need to build an ROI for streamlining their information to improve productivity. This will be a huge driver of knowledge management investments over the next three years," Harris predicts.
Training sets tone
The benefits that knowledge management tools can bring to increasing worker productivity are best exemplified with employee training.
Training performed without knowledge management tools typically involves a six- to eight-week training period, with trainees retaining about 30% to 40% of what they learned, Liakopoulos says. With the implementation of knowledge management tools, training is reduced to an average of two weeks-while knowledge retention climbs to 80% to 90%, according to Liakopoulos.
In a post-training realm, employees spend on average 1.45 hours per day just searching for data to complete various tasks-an unacceptable statistic if optimizing productivity is the intention, says Rosaline Tsai, a product marketing executive with St. Paul, Minn.-based Lawson Software.
Built on collaboration
An enterprise-driven approach to information dissemination-not an automatic for insurers-could serve as a key to both training and on-the-job efficiency. "Knowledge management is built on collaboration-integrating the experiences of an organization into a common data base. It's the predecessor to future decisions," explains Liakopoulos.
"To make knowledge management a success, you have to destroy the walls and silos within the enterprise," explains Jaime Sguerra, second vice president and chief architect, for New York City-based Guardian Life's information technology division. "From a data standpoint, we're seeing the benefits where one unit is now able to access data from another unit. It's indeed a cultural change."
Insurers must determine who the individuals are within the organization that "can answer the difficult questions," states Gartner's Harris. Once established, the next step is to develop a profile of these people and a communication link to them, perhaps via e-mail or instant messaging.
Adds Gabriel Fuchs, a senior manager for Lausanne, Switzerland-based La Suisse Insurance, a provider of commercial and personal insurance products: "To me, knowledge management is, 'How do we make our people more competent,'" Fuchs declares. "It provides experience and intuition on the business side. We can leverage knowledge management to our business intelligence capabilities."
Undoubtedly, insurance companies are taking all these factors into account as they explore knowledge management applications, determining priorities across three core areas of the operation: underwriting, claims and sales and marketing.
Underwriting results have suffered because of an inability to crystallize risk, or an inability to formulate a consensus of what risk entails. Indeed, too much information can hinder, and not necessarily help, this process. "The accumulation of information over the years at insurance companies reaches a critical mass," Harris says.
That's why steps must be put in place to rein in the information glut. Warren, N.J.-based Chubb Group of Cos. coined a name for the accumulation of information collected over the years across the enterprise-particularly from intranet, extranet and corporate Web site properties.
"We call it 'grandma's attic'" reveals Richard Cantor, Chubb's knowledge management business unit leader. "So we went up into the 'attic' and moved everything out to the front lawn, so to speak."
Chubb examined previous ways that data had been made available to the business units and made a value judgment: If an underwriter visits a site, where would he or she look for content, and what would be the likely name of the content? Is the data still accurate? Who's the author? Does it have the appropriate meta-data tags so that Chubb search engines can find it?
"We learned there is no shortcut to doing this because the audience (underwriters) looks at content in very diverse ways," Cantor says.
Recognizing Web-based content management as an integral part of the effort, Chubb launched an initiative in 2002 called ChubbNet, an enterprisewide portal that's being accessed-and shared-by underwriters within its business units. ChubbNet is a second-generation Web program that succeeded Lessons Learned, an automated program that Chubb developed 2001 to provide real-time data and analytics to underwriters to enhance risk management, Cantor says.
At Chubb, developing an enterprisewise e-business plan is a tall order. The organization consists of 43 business units, of which 33 are core underwriting areas and 10 consist of underwriting services, such as quality assurance and loss control, explains Cantor.
To date, six of Chubb's 43 units are piloting ChubbNet. They include: ocean cargo, inland marine, life sciences, excess umbrella, multi-national risk and information technology (cyber-risk) insurance.
Lessons learned
To prepare for the rollout of Chubb-Net, the carrier, from early 2002 to mid-2003, created roles and responsibilities for eventual program users, clarified Web content and created a new navigational structure. It also acquired a content management solution at the beginning of 2003.
The effort was supported by Chubb's knowledge management unit, headed by Cantor. Chubb's KM unit also consists of a full-time programmer and several Web content publishers-people well-versed in Web design and the development of HTML coding.
"We spent the past year to 18 months rethinking how we could better leverage automation to support underwriting activities," explains Cantor.
But in the process, Chubb learned some lessons of its own.
"We originally thought that if we only developed a dynamic search engine, it would be the silver bullet, but this was not the case," Cantor says. "Our Web content was in poor shape, and a great search engine is worthless if this is the case-it negatively impacts searchability. When content has not been maintained, the search returns an incredibly large range of topics, which is not what you want for a qualitative search."
Three-click rule
With ChubbNet in place, Chubb underwriters spend less time spinning their wheels during a Web search, and less time looking for information means more time to solve problems and improve decision-making on risk, says Cantor.
Using the ChubbNet portal, data is loaded into a central repository, where documents can be easily retrieved. The front-end piece can be customized by business users based on their individual needs.
Furthermore, each business-unit portal is maintained by content managers, who are typically senior-level employees within each business unit. The distinction of content managers is that they understand "the ongoing shift in the relevance of content," says Cantor.
This is no small feat because at Chubb, "grandma's attic" has a tendency to become cluttered. If a Chubb underwriter using ChubbNet, encountered unstructured data without metadata tags in place, "an underwriter could get hundreds of hits returned, and would have to sift through them all to find what he's looking for," explains Cantor.
"With a dynamic content management solution in place, an underwriter now gets six to 10 hits, and I promise you they're the right hits. We've established a three-click rule: During a search, underwriters should not have to click onto more than three links to find the information."
The results of ChubbNet have so far proven to be a success. "When we launched this, we were hoping for a 25% improvement in search quality, but to our amazement the improvement in search quality has been about 90% or better," Cantor says.
In short, ChubbNet has been such a hit with underwriters that Chubb is planning to embark on phase two later this year. In this phase, ChubbNet will be offered to the company's personal insurance and general liability lines, reveals Cantor.
The great unknown
Most insurers that have taken the plunge believe that investing in knowledge management tools and technologies have been beneficial to the organization. It's just been difficult to measure the results.
Regarding capital expenses to support KM, Gartner's Harris relates that it's more difficult to measure these expenses for the very reason that insurers might face an overlap where technology investments to support KM are simultaneously being applied to other IT ventures within the company.
For example, insurers might develop portals to enhance several areas of their operation, one of which is knowledge management. They might have invested in an instant messaging solution that supports claims adjusters, who have to make quick decisions in the field, but the in-stream messaging solution might also be supporting other company efforts.
The most difficult challenge in determining the role KM plays in an organization is getting unified participation. "It's essential to convince insurers that when you embrace knowledge management, it's not a one-time event," says Accenture's Liakopoulos.
"It's a big cultural change and corporate behavior has to change. The effort means sharing knowledge. So you have to get individuals to buy into the concept of contributing to a repository. But in doing so, they want to know what's in it for them-what are the rewards for sharing."
There is also the challenge of getting people to trust the unknown.
"The managers of the six business units put themselves out on a limb because they needed to allocate staff to support the ChubbNet effort," Cantor says. "The content managers of the Web sites were instrumental. They had to define what content was relevant and what wasn't."
Insurers such as Chubb are among a growing number that might not be able to provide a litany of numbers and metrics that can specifically justify knowledge management's role in their business. However, they know it's paying dividends.
"Knowledge management has taken root at Chubb," Cantor contends. "Other insurance organizations might hesitate to embrace KM because it is hard to assess a return on investment. But even though it can be hard to tangibly measure results, I can safely say that at Chubb, knowledge management activities make a significant difference across the enterprise."
La Suisse's sales efforts are more than 'picture perfect'
They say a picture's worth a thousand words. To insurers, producing a snapshot of their customers is worth more than that-it's priceless.
Lausanne, Switzerland-based La Suisse Insurance, a provider of commercial and personal insurance products with revenues of about $800 million a year, is using a solution that has the ability to visually analyze key sales indicators, enabling it to immediately determine how its products are selling across customer bases and geographical regions.
"Knowledge management technology provides the ability to drill deeper to extract more relevant information from a transaction database. You can establish a snapshot about data elements," states Steve Brandano, software services solutions architect, St. Paul, Minn.-based Lawson Software.
Without these tools, La Suisse would not know that John Doe had three accounts with the provider, perhaps viewing it as three separate individuals. "These tools have enabled us to take a 'snapshot' of a portfolio, which then let's set benchmarks and identify trends," says Gabriel Fuchs, a senior manager for La Suisse.
La Suisse is making the most of its cross-selling and up-selling opportunities through use of a solution called DecisionSite. Developed by Somerville, Mass.-based Spotfire, a provider of analytic applications, DecisionSite is comprised of three analytic modules, including ad hoc, guided and shared analysis. Guided analysis, for instance, is a pre-configured business process expertise module that can analyze data within a very specific workflow. "It's just that-it acts as a guide," says David Butler, vice president product strategy and marketing, Spotfire.
Driven by the guidance modules, LaSuisse sales reps can quickly understand where there are potential problems or potential opportunities across the business, says Fuchs. Supported by the sharing analysis, this information is then shared among all 25 of its sales branches located throughout Switzerland.
"With traditional processing, you would mainly get a static snapshot of data through spreadsheets," says Fuchs. "Under this scenario, a sales force might not be able to determine whether or not it was discounting a product line too steeply. Or, it might not know why there's an increase in claims activity in a particular month of the year. They now can get a clear snapshot of data. And the software provides non-stop 'what-if' scenarios."
Knowledge management supports sales
Aside from underwriting, knowledge management is being applied to both the claims and acquisition segments of insurance. Regarding the latter, it's no secret that to thrive, sales reps regularly need to analyze reams of marketing and sales data to react quickly to potential sales opportunities.
Guardian Life examined Web-based content management and applied it to support sales and marketing efforts. Through content management, producers could better identify upselling and cross-selling trends and perform crisper portfolio analysis.
"We wanted to empower business users," says Jaime Sguerra, second vice president and chief architect, for New York City-based Guardian Life's information technology division of Guardian, which has $34 billion in assets providing life, disability, health and dental insurance products.
"Across the enterprise, the various sales groups that access the Web all have established their own content requirements in what's a very decentralized maintenance process."
Guardian's producers are quickly able to see what products customers have with the carrier and then make decisions on selling strategies. Metadata is created to provide guidance over searches.
But to lay the overall foundation for implementation of the content management solution-developed by Eden Prairie, Minn.-based Stellent-The Guardian had to embark on a data warehousing project, which enables business users to extract mission-critical data from The Guardian's various policy processing systems. The idea is indeed founded on sharing and collaboration.
"We created a policy that fosters the use and reuse of data across business units," Sguerra says. "We did this by creating an open, component-based enterprise architecture: All data is consolidated within the central repository with individualized business rules established."
Other insurers are leveraging content management to both new-business opportunities and policy processing. La Suisse Insurance, a provider of commercial and personal insurance products, had experienced a difficult time over the years quickly identifying the policies in its system that were coming up for renewal-without manually sifting through policy records to do it, that is.
"When it comes to policy renewals, we might have 10,000 renewal contracts in our system; the content management technology can provide a snapshot that informs us, 'these 1,000 policies must be processed for renewal this week.' It provides snapshots and it's impossible to misunderstand the results," says Gabriel Fuchs, a senior manager for Switzerland-based La Suisse Insurance.
