E-Outsourcing Cuts Costs And Risks

Now, a new breed of outsourcer, the ASP, is tapping the Internets potential with new, Internet-based e-outsourcing. In e-outsourcing, like traditional outsourcing, ASPs help lower a companys risk and cost by hosting the technology platform for the carriers business operations. Company employees connect to the ASP using a standard Web browser to run the necessary business applications. ASPs with a proven track record can provide carriers with high-quality solutions that can be quickly deployed, are highly scalable, and have a high degree of availability. Carriers can also take advantage of subscription or "pay-as-you-go" pricing options.

Yet, ASPs capabilities go far beyond traditional outsourcing capabilities. Before the Internet, it was nearly impossible to communicate and collaborate outside a companys walls or private wide-area network. Thanks to the Internets platform independence and far-reaching network, it is now possible for all process stakeholdersemployees, agents, the insured and suppliersto access Internet-based applications using a standard Web browser. They need not be concerned about the underlying technology platform, software or physical location.

In fact, the Internet is a new channel for essential business operations, serving as a virtual, but common, application infrastructure for insurers. The Internet as a networking platform allows carriers to e-outsource virtually every operation, from back office and workflow systems to front office, outreach, and customer serviceand all without significant investments in hardware, software, deployment time or IT personnel.

As companies start using the Internet more for business operations, ASPs can show what is possible to achieve using Internet-based technology. Insurers are then free to expand their horizons and to think about "what could be" rather than being limited by "what is."

Although just the tip of the iceberg, ASP-delivered insurance applications that help spark thoughts of "what could be" might include:

Collaborative claims litigation.

Collaborative claims litigation management applications can significantly reduce the total claim outcome of litigated files through proactive communication and process management between a carriers claims personnel and outside legal counsel. Real-time communication, enabled by intranets, extranets and other collaboration tools, enables lawyers and claims professionals to strategize, share claims and case information, set budgets, monitor case progress, work on documents simultaneously, and manage calendars. Instead of arguing over after-the-fact legal bills as they do today, both sides can focus on resolving cases fairly and timely, keeping costs under control, and ensuring the best outcomes for all parties.

Niche product development, deployment, and administration.

Too often, insurance carriers have missed significant market opportunities because they have been unable to get a product to market quickly, or the market opportunity did not warrant the resource commitment. E-outsourcing provides carriers with new alternatives to the age-old time-to-market challenge, while enabling them to continue managing their core businesses in-house. By using specialty ASPs who have experience bringing products to market quicklyor servicing niche or specialty marketscarriers no longer have to walk away from a good opportunity.

Agent and Insured Services.

Getting closer to policyholders and making it easier to do business with carriers have long been major goals of almost every insurer. Existing strategies, such as reaching the insured through CRM applications, have not yet come to full fruition. The Internet advances these goals by bringing together carriers, channel partners (i.e., agents, brokers, TPAs), and the insured.

Using Web-based applications that leverage legacy or new technology systems, agents and policyholders can quickly compare quotes, submit new applications, check underwriting status, or file a claim report online. While in-house staff might be technically competent to develop, deploy and support these agent/insured functions, ASPs enable carriers to take advantage of existing ASP-delivered applications and focus their energies on core business functions.

These are just a few of the many potential Internet-based applications, and they illustrate what insurers need to think about when pursuing an Internet strategy.

Until now, carriers have been slow to adopt ASPs, and have not yet fully embraced the Internets potential. Insurers need to look beyond simply "porting" todays in-house applications to the Web.

To reap the rewards of the Internet, carriers should look at what has not been possible before due to a lack of in-house expertise, technology deficiencies, or a seemingly unmanageable and geographically dispersed user community.

By combining the best of outsourcing and the Internet, ASPs can introduce insurers to a whole new world of possibilities for new applications, new products, and improved processes. The potential is limitless.

Asif Ahmed is chief technology officer of Visibillity, based in Chicago.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 26, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.