The soft market has prompted insurance companies to look at document management ina new way.

Investments in technology have been seen as a means to get newbusiness, not on servicing policies better, explains Nicolas Michellod, a senioranalyst in Celent's insurance practice and author of a new report,The Market Dynamics of Document Management. “Now with the marketthe way it is, it's more difficult to get business so insurers arelooking at ways to get to know their customers and businesspartners.”

Insurers need to reconsider the way they communicate withcustomers. Currently, internal structures are complex and multipledocument composition engines are used, explains Michellod.

The survey was conducted to get ahandle on what insurers are doing in terms of document automationand found there is a rise in the use of e-mail, HTML, and PDFformats, but traditional mail remains the dominate form ofcommunication.

“The insurance industry likes paper,” quips Michellod. However,more companies are using e-mail and portals, he adds. Insurersshould be getting the word out to customers to increase theusage–that use of a customized portal for policyholders only couldbe a way of reducing premiums.

For instance a portal should allow a client to change contactdetails, send messages related to renewing a policy, file a claim,or to log a complaint, according to the report.

“A unified document management system has a direct impact oncost savings,” says Michellod. “There is less to maintain.”

The survey found insurance companies are not getting the mostout of data collected, making it “difficult to leverage what theyhave,” says Michellod.

Insurers are confused, according to the survey. Though many wantto simplify the organization and creation of documents, they don'tknow how. Also, the number of IT tools available, makes the choicedifficult.

Of those surveyed, nearly 55 percent use a mix of bothcentralized and decentralized document creation systems while about23 percent use a decentralized format and the remaining 23 percenthave a centralized team in charge of document creation. Inaddition, 78 percent use multiple tools to manage and personalizedocuments, which not only costs more but adds complexity to theprocess.

“Many insurers aren't at the stage where they can personalizecommunication to a specific customer or even segments ofcustomers,” Michellod reports, because of “unstructured or uncleancustomer data.” Insurers have chosen not to mix messages incommunications. For instance, a claim statement will only haveinformation related to a claim.

While Celent advises against “transpromotional communications,”Michellod recommends insurers improve this situation. Currentlymost insurers report this kind of communication still requires acoordination of different departments before sending out a documentwith different messages, such as a billing statement withinformation about a sales promotion.

Outsourcing printing and shipping remains a key component forexpense reduction, especially since many insurers consider printingand shipping to be outside their area of expertise. Celentrecommends insurers assess the long-term viability ofoutsourcing.

Finally, Celent looks at electronic notepads and smartphones asthe wave of the future. These tools make it easier for agents tomeet with potential clients. For now, applications on the phonesare geared toward marketing and brand awareness, but they could bea functioning tool of the producer.

“The growing importance of new communication and distributionchannels is forcing insurers to rethink the way they interact withexisting and potential clients and business partners,” the reportexplains.

More than 60 percent of insurance professional believe theirdocument creation engines allow business users–claims adjusters andagents–to create or personalize documents. However 49 percent allowagents to generate ad hoc documents and correspondence.

The results of the survey created the first of two reports to beissued by Celent about document management in insurance. Detailsabout a new vision for document management will be in the secondreport.