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

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

Insurers need to reconsider the way they communicate with customers. Currently, internal structures are complex and multiple document composition engines are used, explains Michellod.

The survey was conducted to get a handle on what insurers are doing in terms of document automation and found there is a rise in the use of e-mail, HTML, and PDF formats, but traditional mail remains the dominate form of communication.

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

For instance a portal should allow a client to change contact details, 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 on cost savings,” says Michellod. “There is less to maintain.”

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

Insurers are confused, according to the survey. Though many want to simplify the organization and creation of documents, they don't know how. Also, the number of IT tools available, makes the choice difficult.

Of those surveyed, nearly 55 percent use a mix of both centralized and decentralized document creation systems while about 23 percent use a decentralized format and the remaining 23 percent have a centralized team in charge of document creation. In addition, 78 percent use multiple tools to manage and personalize documents, which not only costs more but adds complexity to the process.

“Many insurers aren't at the stage where they can personalize communication to a specific customer or even segments of customers,” Michellod reports, because of “unstructured or unclean customer data.” Insurers have chosen not to mix messages in communications. For instance, a claim statement will only have information related to a claim.

While Celent advises against “transpromotional communications,” Michellod recommends insurers improve this situation. Currently most insurers report this kind of communication still requires a coordination of different departments before sending out a document with different messages, such as a billing statement with information about a sales promotion.

Outsourcing printing and shipping remains a key component for expense reduction, especially since many insurers consider printing and shipping to be outside their area of expertise. Celent recommends insurers assess the long-term viability of outsourcing.

Finally, Celent looks at electronic notepads and smartphones as the wave of the future. These tools make it easier for agents to meet with potential clients. For now, applications on the phones are geared toward marketing and brand awareness, but they could be a functioning tool of the producer.

“The growing importance of new communication and distribution channels is forcing insurers to rethink the way they interact with existing and potential clients and business partners,” the report explains.

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

The results of the survey created the first of two reports to be issued by Celent about document management in insurance. Details about a new vision for document management will be in the second report.

Special Reports /

Innervisions of Document Management for Insurance

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