Policy Do-It-Yourselfers
With a new policy administration system, Providence Washington aims for its agents to get close to 80 percent of their policies issued electronically with no carrier intervention.
Providence Washington Insurance Companies is a New England-based property/casualty insurer that saw the need for establishing a Web presence, not only for its independent agents, but for the internal staff as well. When we made that decision we had various goals in mind, says Ed Leveille, vice president systems and CIO. What-ever we did, though, had to be faster to market. We also wanted to make the system as close to 100 percent self-service as possible. And we also wanted to make it totally open for communication with third parties.
Unfortunately, Leveille was unable to find a system that could do everything he wanted. The insurer decided instead to build the system internally, but some outside tools also would be needed. I kind of gambled that Web services and XML are going to be the wave of the future, he says. If we stored all the information in XML, we could cut down significantly on the number of transformations and loading steps between systems.
Providence Washington did a market study to determine the top three XML-native databases in the market and then started the search. Ultimately we selected Software AG for several reasons, says Leveille. One, it was around for a long whileit wasnt new to the space. Two, we felt the company was strong in terms of its direction and R&D. Three, it already was working with ACORD and XML. Four was just a gut feeling I had of how Software AGs people related to my people. It had all of those things and came out on top.
Once the decision was made to go with a system that offered XML, the implementation fell into place quickly for Providence Washington. The project was approved in August 2002, and Software AG was selected in October. The implementation was completed in April of this year. It was a pretty quick project, says Leveille. We had to do an upload project of IVANS agency data into our existing legacy system. The business people wanted it right away. Determining that XML was the way to go, and with business support, the carrier chose Software AG. Its not my typical way to select vendors or products, but in this case, we had to do it quickly or we were going to have to go the old EDI route, and we didnt want to do that.
The product we are delivering is exactly our business strategy, says Leveille. We are able to allow our agents to quote and get a proposal for insurance, issue that document, and have a PDF print format of the policy and all the accompanying forms so the policy is set within minutes. It used to take the carrier between two and six weeks to accomplish the same job manually. This is light-years different, he asserts.
Along the way, the carrier has made some design changes but nothing major, according to Leveille. Providence Washington operates on a Microsoft platform with several different components and uses Metaserver for business process management. [Metaserver] takes the transactions and makes the decisions on what steps [processes] need to go through, says Leveille. The front end is almost solely Cold Fusion with some other Macromedia products, he adds.
The carrier is looking for an excellent return on investment over the next few years. Were making the whole policy-writing step virtually 100 percent self-service, says Leveille. We want 80 percent of the business to go through electronically. If we hit the 80 percent mark, we virtually can double our size and take on no more new people. Our people cost is roughly 50 to 55 percent of our expense, so its pretty easy to see if we can double our volume and hold steady on people, theres a tremendous ROI.
ROBERT REGIS HYLE
CaseFile
The Problem: A new policy administration system was needed that allowed policy information to be quoted and stored using XML.
THE COMPANY: Providence Washington Insurance Companies
WEB SITE: www.providencewashington.com
NET WRITTEN PREMIUM: $230 million
THE SOFTWARE: Tamino XML Server from Software AG
WEB SITE: www.softwareag.com
POLICY PRODUCTION
Once and for All
Carriers want a lot of functionality from new systems, but their list often starts with the same wish: Make it so we enter the data only once and fulfill the needs of all users.
The Columbia Insurance Group has a vision for its information technology: an environment where data, voice, and images are integrated and passed electronically between internal and external sources and users. Thats our guiding principle, says Dennis Roth, vice president of change management for Columbia and chairman of the technology committee.
Columbia is a regional carrier in Missouri, and in 2001, the carrier determined a need for a new digital electronic infrastructure for its policy production. We spent almost a year researching what was out there in the marketplace to serve as our backbone, says Roth. The carrier arrived at four basic functionalities: publishing, archiving, imaging, and workflow. We had an overall goal that everything had to fit together, says Roth. We didnt care which vendors or software we used, just so long as we didnt have to enter data more than oncepreferably not even once.
Last year, the carrier submitted requests for proposals to seven vendors and eventually cut the number to three before selecting Docucorp. While all the functionalities are important, Roth says some are more important than others. [Docucorp] was the strongest in publishing and archiving, he says. The weakest of the systems functionalities is probably workflow. We knew that, and [the vendor] didnt hide it. Docucorp is busy working on it, though.
Integration is a key point for Columbia. We didnt have to worry about building bridges, says Roth. With our network, Docucorp allows a Web-based interface with all the data in the archiving system. Each system in the company, whether it is accounting, payment processing, or human resources, has to interface with the archiving system. Basically, we want to receive data and information from any source whatsoever, use it, process it, and furnish it to our customers, both internal and external, in the form the customer wants it in. That includes agents, regulators, stat bureaus, or Columbias internal business departments.
Docucorp suggested its own 12-step protocol for rolling out the system, but Roth says Columbia wanted the project done its own way. That meant the functionalities were rolled out in this order: publishing, archiving, imaging, and workflow. The rollout went by state and then by product. The protocol we worked out with Docucorp was the first time we rolled out a product, Docucorp did it. The second line, we did it together. The third one we did ourselves. The first rollout began in March 2002 and was personal lines. Farm came next, and the company just has begun the commercial lines. We thought it would take about two years minimum to roll it out, says Roth. Its going to take longer now that were in it because weve changed some policy administration systems in separate upgrades to the companys infrastructure.
Columbia users are emitting the usual moans and groans that come with the installation of new systems, but Roth believes most people are satisfied. An important step in the process has been the unqualified support and motivation by Columbias upper management.
We wanted to make it easier for our insureds and our agents to do business with us, says Roth. We always are trying to find the needs of our customers.
One issue that came up inside Columbia involved training. Weve been a little frustrated with the time its taken to learn the system, Roth says. Weve deliberately slowed down until weve gotten any quality issues nailed.
The carrier is excited about the prospect of reaching its return on investment within three years, Roth says. Were now utilizing five percent fewer people than we did when we started the project, and I expect that [percentage] to increase, he says. Its had a big impact. The majority of the labor savings is coming from the Docucorp software, and we expect that to continue as we utilize all the functionality.ROBERT REGIS HYLE
CaseFile
The Problem: Regional P&C carrier needed efficient policy production system.
THE COMPANY: Columbia Insurance Group
WEB SITE: www.colinsgrp.com
NET WRITTEN PREMIUM: $175 million
THE SOFTWARE: Docucorps policy
production solution
WEB SITE: www.docucorp.com
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