By reducing preprinted forms, ID cards, and storage facilities for tons of paper documents, insurers that dont click the print icon are saving trees and much more.
Insurance carriers are notorious for the amount of paper they generate, and even smaller carriers such as Commerce West Insurance substantiate that reputation. We generated thousands of pieces of paper every day, says George Jeffers, Commerce Wests director of IT. And were fairly small in the insurance world.
Commerce West operated on a proprietary printing system, and Jeffers describes the printing methodology as somewhat archaic. The carrier found it was difficult to control both the look and feel of the pages produced for policies, bills, and customer information. There was no mechanism to do anything except to print a hard copy, he says. For everything we printed out, we would print a copy for the insured, a copy for the insureds agent, and a copy for our internal use. It was an intensely manual process. We had a lot of problems with speed and quality.
Commerce West went looking for a better solution, Jeffers notes, one that allowed the carrier to get the work accomplished independently. One of our mantras is we want to do as much as we can to control our own destiny, he says. If we screw up, we want it to be our fault, not someone elses fault.
After studying industry publications and conducting other research, Commerce West narrowed the selections down to three choices and then had both the technical staff and end users study the options. They settled on the product suite from Createform and signed the contract in July 2002.
The difference in Commerce Wests documents is striking, according to Jeffers. The look and feel of our documents now looks like 2003, not 1983, he says. Other improvements have followed. The company no longer prints internal copies, and agents who prefer e-mail correspondence receive their copy in a PDF document. We also have a lot more control over the documents that go out, says Jeffers. We actually got more out of this project than we expected going in.
Createform agreed in the contract to supply on-site personnel for the installation and training. Jeffers says both went smoothly. The only hitch was a lack of communication on everything we needed to have ready for the [Createform] guy when he showed up, he says. The tool is very intuitive, so as far as the training curve for our folks, it was pretty fast.
Since going live in January of last year, the product has worked well, according to Jeffers. Between some creativity on the part of my people and the flexibility the tool has, the screen product is very powerful, he says. The only real issue is weve had some problems with forms becoming corrupt, which has happened more often than wed probably like. Jeffers believes a recent upgrade by Createform will fix the problem. It was a bit of an annoyance, but so far it seems to be better, he says.
The company did not conduct a formal ROI on the project, Jeffers adds, but the benefits have been obvious. Weve been able to cut the amount of time it takes to do output every day, and weve been able to cut head count of people actually managing and printing paper, he says. We dont have to print office copies anymore, and we dont have to file office copies anymore. The cost of preprinted forms and ID cards for policyholders has been reduced. The company paid $129 per thousand for the ID card stock, and that price has fallen to $14 per thousand for the blank stock. Still another benefit has been the workflow gains. Users can pull up documents from the desktop instead of grabbing a paper file from a file cabinet, adds Jeffers.
Commerce had to write an extract that allows it to pull the data out of the system, according to Jeffers. The system creates a file every morning and says this is the stuff that needs to be printed, he explains. We have a program that looks at the list and puts together a text file extracting data from the policy system. The system operates on a Windows NT and 2000 platform. We bought a small server to run it, but its a low-end serverbasically a desktop, says Jeffers.
While saving money is always important, Jeffers believes the major benefit of the system is the ability of Commerce West to control what forms go out the door. It was a low-cost option that delivers pretty well, he says. Robert Regis Hyle
CaseFile
The Problem: Carrier needed modern look and feel for its documents.
?THE COMPANY: Commerce West
Insurance Co.
?WEB SITE: www.commercewest.net
premium volume: $53 million
?The SOLUTion: Createform
?WEB SITE: www.createform.com
IT Solutions
Electronic bulk payments
Bonus Check
While looking for a way to gain efficiencies through the use of electronic bulk payments, a California carrier found a hidden benefitOFAC compliance for the enterprise.
Automobile insurers often find themselves writing multiple checks to vendorscar rental companies, body shops, tow truck operatorsand AAA of Northern California, Nevada, and Utah felt it could decrease banking fees and internal processing costs for paper checks through the implementation of an electronic bulk-payment system. We operate on a mainframe legacy system, and we were trying to figure a way in which we could bulk payments to similar vendors, says Rick Goddard, technical analyst for claims for AAA. The car rental company we use, we could send it [with the old system] anywhere up to 300 checks a dayeach one sealed in an envelope with postage paid and a paper check.
Goddard found several vendors on the market when he began the search, and eventually AAAs selection process cut the number down to three. He believes what set Prelude Software and its PayPilot software system apart from the others was the other vendors wanted the carrier to send the vendors a payment file and the vendors would process the payment for AAA. At a fee, of course. Thats not something we wanted, Goddard says. We wanted control of the process in-house. Prelude was the only vendor that came across with what we were looking for.
The carrier began the search for a solution in early 2002 but did not sign a contract with Prelude until early in 2003. The system went live last spring.
AAA outsources its IT operations, so working with IT vendor Prelude and the AAA business unit was a challenge, according to Goddard. The carrier decided it wanted ownership of the application, though, so AAA purchased its own server to operate the system. We are maintaining and processing the system internally, says Goddard. Training went well for the users. Prelude used an online demonstration and walked us through the application, he says. It used our data, which we had been using in tests, so it looked and felt just like what we were going to see.
Initially, the system was rolled out only as a claims department application, God-dard explains, but the carrier soon found another use for the system for all aspects of the company. Right after implementing the system, our bank told us we had so many months to demonstrate OFAC compliance or [the bank] would cease banking relations with us, he says. This [implementation] was perfect timing as we went right in to bring all the enterprise payments through PayPilot and they get scrubbed. We are OFAC compliant because claims implemented PayPilot.
Acceptance by the carriers major vendors has been excellent. We originally thought in the first year we would have 50 or so vendors sign up, says Goddard. Within the first few months, we almost tripled that figure. I thought the body shops would want the paper check in their hand, but they know the float period [for checks] worked in their favor.
AAA is excited about the system and already is looking down the road at getting a browser-based application. Thats something were going to work on with Prelude because were moving toward that with everything, says Goddard.
The next step for AAA is to purchase a second server. With the additional traffic on the server now that the system is enterprisewide, the carrier wants to have a backup.
The company has estimated it will achieve its return on investment in eight months, Goddard indicates. While re-searching the project, he says, the banks told AAA that with internal processing fees, mailing, and all that went into writing a check, the company would spend $5 to $7 per check. Weve now eliminated one third of all paper checks, he adds. So were expecting a good ROI. Robert Regis Hyle
CaseFile
The Problem: Carrier wanted to decrease internal processing costs for paper checks.
?THE CARRIER: AAA of Northern California, Nevada, and Utah
?WEB SITE: www.csaa.com
REVENUE: $2 billion
?The SOLUTION: PayPilot from Prelude Software
WEB SITE: www.inspay.com
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