Inside Track

Insurers can tackle documents as part of an enterprise contentmanagement strategy that could produce a significant competitiveadvantage.

BY CYNTHIA SACCOCIA

Insurers with a strategic view of document management realizeimportant efficiency gains that equate to double-digit savings inboth hard- and soft-dollar operating costs. What is certain isdocuments can be either an asset or a liability, and how insurersmanage this part of their business often is a differentiator. Manyinsurance companies are drowning in content because they lack toolsto manage documents effectively enterprisewide. As a result, theylack the capability to integrate documents to business processes,which creates inefficiencies. Harnessing documents proficiently andreliably is a tremendous task, but the benefits outweigh the painof implementing new processes and solutions.

Todays document management platforms and tools are a new breedof technology whose full potential the insurance industry has yetto realize. By way of definition, document management is theadministration of document-based processes to create, approve,store, and deliver different types of content interactively or inbatch. Functions support retrieval, change, and reuse of contentsuch as electronic and paper-based documents or forms. Documentmanagement applications primarily do the following:

Maintain a central repository for storage and retrieval ofreusable content.

Utilize library services for version control, security, andapprovals.

Store and index all types of content and file formats.

Execute multichannel publishing for electronic and printdistribution.

Create, deploy, and retrieve documents and forms withoutredundancy.

Business Opportunities

Document management technology equips insurers with the tools totake advantage of present business opportunities such as:

Virtually eliminate manual labor-intensive document processesand minimize operational costs.

Reduce print, postage, and storage costs for hard-dollarsavings.

Demonstrate compliant and secure controls to lessen regulatoryrisk.

Automate cross-functional business processes to streamlineoperations.

Reduce call center volume with easy-to-read statements, bills,forms, etc.

Design customer-centric communications and promote services thatfoster loyalty.

Develop target marketing and increase cross-sellingpromotions.

Standardize forms and content flow to streamline processes andgain operational efficiency.

Accelerate time to market in product development, underwriting,and sales.

Strategic Objectives

The deciding factors to deploy document management applicationsare in line with the industrys strategic objectives to controlcosts, manage compliant operations, and enhance customerservice.

For example, document management applications are particularlyhelpful in policy production because they dramatically can reducemanual involvement, ensure accuracy and compliance, and enhanceservices to producers and policyholders. Policy production ispredominantly a hard-dollar operational cost because of the cost ofsalaries, print, postage, and waste. Soft-dollar costs result fromcorrections and call center support. Insurers easily can reducelabor and production costs because automating policy productiontakes manual intervention out of the process. Automated policyassembly reduces expenses in paper waste and errors and providesthe means to enhance cost effectively customer service. While manyinsurers still handle policy assembly manuallya labor-intensiveprocess prone to errors and inefficiencyinsurers can gainsubstantial savings and operational improvements with an integrateddocument management system.

One of the key benefits of leading document managementapplications is the functionality to assemble complex policypackages. The policy package includes a variety of forms,determined by product line and regulatory requirements, such asschedules, endorsements, and policy amendments. The completepackage must integrate these forms with other required contentcaptured and created by auxiliary systems such as declaration pagesproduced by the policy administration system and the stored imageof the application to complete the policy package.

Automation Benefits

Policy production automation offers benefits by enabling theinsurer to do the following:

Reduce costs in the output process by electronically deliveringa policy package to a print center for print and mail, either ownedby the insurance company or outsourced.

Reduce print and mail costs in Web-based delivery of agentcopies.

Eliminate costs for printing and filing of home office copies bymeans of electronic storage of content.

Enhance services and cross-sell opportunities with apersonalized welcome kit and policy package.

Publish policy and contract pages for all lines of business,both aged or current.

Ensure content is compliant and consistent from one policypackage to the next.
Central Support

Document management applications also help insurers reduce thehigh costs associated with forms management, for both data captureand compliance, because they support a central repository forconsistency and reusability of content. It is important forinsurers to separate forms management from marketing because of thekey differences between the way insurers want to communicate andthe way they have to communicate with agents and policyholders dueto compliance and regulatory requirements. Centralizing thisfunction is important for insurers to control the usability offorms throughout the enterprise.

The basic premise of a form is multiple departments use it, thewording and versions must be consistent, and the data captured isessential to business process workflows. Forms may includecontracts, applications, declaration pages, endorsements,statements, and installment schedules, among other documents.Regulatory requirements at both the state and federal level oftendrive forms compliance concerning such matters as document wordingand time to destruction. For example, state insurance departmentsdictate the wording for policy documents and forms, which variesfrom state to state making forms management a major challenge forinsurers to control effectively.

Reliable Forms

It is clear insurers need a solution that helps them keep formscurrent, accurate, and compliant across the enterprise. Formsmanagement automation offers numerous benefits, enabling theinsurer to do the following:

Establish consistency in gathering and storing informationcollected in forms to ensure reliability of the data received.

Streamline the reusability of forms because many processesdepend upon the same documents, wording, and versions everytime.

Integrate the same form to multiple processes or workflows toeliminate costly redundancies in managing multiple forms anddocuments.

Minimize duplication in forms to reduce conflicts anddiscrepancies from one version to the next.

Enforce forms content across the enterprise to improveefficiency and reusability with control.

Eliminate dependency on preprinted forms to reduce dramaticallystorage and labor costs.

Gain production efficiency with the reusability ofobject-oriented content to reduce substantially the number of formsmaintained.

Improve speed and accuracy in new product development fordocument creation and state filing.

Process Connection

Document management platforms and tools help insurance companiestake advantage of the immediate opportunities to connect documentsto the business process so that people can make better, fasterdecisions. For the insurance industry, the absolute volume ofdocuments is overwhelming, and insurers report it is one of themost unwieldy resources to manage. Since documents are anoperational driver, it is important insurers seriously consider howthey can gain control over the movement and use of it throughoutthe enterprise.

What is apparent is document management is one part of anoverall enterprise content management (ECM) strategy. ECM is anamalgamation of distinct and interrelated software applicationsthat help insurance companies produce and deliver contentefficiently, securely, and cost effectively. The tools andplatforms that interact with and manipulate content can becatalogued under three categories: content management, documentmanagement, and records management. Within each category areassortments of tools that have similar attributes to supportspecific content types.

Content includes all forms of information: electronic andpaper-based documents, multimedia files, e-mail, images, Web pages,and other communications. The retrieval and delivery of content isa force driving many business processes and can improve efficiencyif done well. The historic approach to managing content for adefined task or a process no longer suits the need for informationsharing and collaboration across the enterprise in a manner that issecure and complies with regulations. An ECM platform must bescalable from a single department to numerous users inside andoutside the complex. Active administration of the wide range ofcontent in structured and unstructured formats is integral forstability and usability.

With the right architecture to separate the high-value contentfrom the junk, insurance companies can control content and turn itinto an asset. Tools and platforms deployed for the full potentialof ECM deliver a powerful combination of solutions for insurersthat drive operational efficiency and manage resources at highestcapacity. Each tool and platform plays a role in enabling contentcollaboration from department to department and from the insurancecompany to its customers. Insurers also can integrate keyinformation systems such as policy administration and customerrelationship management (CRM) for a tight alignment of content tobusiness processes and operational objectives to maximize the valueof ECM.

Decision-Makers

The insurance industry is content-centric, and significantpieces of content can influence decisions in areas such asunderwriting and claims. The output of documents affects customerservice. Web portals give access to customer content andagent-centric content. Mandates from state and federal regulatorsoblige maintenance of content in forms and determine timelines fortheir retention. There are other examples, but it is clearinsurance companies manage a wealth of content and numerousoperations depend on content in one way or another. Therefore,enterprise content management is a primary consideration forcompanies seeking to improve profitability through more efficientoperations.

Insurance companies can overcome many operational challengeswith innovative ways to create, manage, and distribute content thatis consistent, efficient, and cost effective. Starting withdocument management is a good first step toward enterprisesolutions and ongoing improvements in managing this unwieldy partof the business.

This article is based on TowerGroup research by , a researchdirector in the insurance practice at TowerGroup. Saccocia can bereached at [email protected].