Relieving the Strain
Increased ease of doing business makes for happier underwriters and independent agentsto the benefit of the insurance company as a whole.
Not many insurance carriers the size of New Mexico Mutual Casualty have the ability to build their own systems. Inside development worked well for the workers comp carrier for most of the last decade, but when it came time to make improvements, New Mexico opted to buy rather than build. We put a halt on internal development when I became the [IT] director 18 months ago and decided were going to buy off the shelf, says Tim Thackaberry, director of IT for the Albuquerque-based workers comp carrier. It doesnt make sense for a company our size to develop internally. Were an insurance company, not a software company.
All of New Mexicos underwriting workflows were fax, mail, and phone driven, and everything had to flow through three underwriters, according to Thackaberry. This caused enormous strain on the underwriters and created a bottleneck in terms of providing quick and easy service, he says. Turnaround times were measured in days rather than hours. Discussions with the carriers independent agency force determined ease of business is a significant factor in terms of deciding where to place business, reveals Thackaberry. That was the first consideration, he notes. The second consideration is having a system that enables more consistent underwriting decisionsdecisions that are more fully documented.
New Mexico put together a requirements document to list all the things it needed in a new policy administration system. We tried to get upfront what kind of functionality we needed, what kind of workflows we wanted, how we wanted it to look, and we went out and surveyed the marketplace, says Thackaberry. We werent really impressed with the single [point] solutions. We looked at four or five different solutions but kept coming back to CompQuick. The agents we showed it to just loved it. The selection process took more than a year as the company underwent senior management changes. The project went live last September.
We are doing [the installation] in phases, explains Thackaberry. We are doing new business first and migrating all our historical data over to the new system. The challenges largely have centered around our data. We have spent a lot of time deciding how to map data elements from the legacy system into CompQuick. It was a tedious project.
While the reaction among agents has been positive, Thackaberry believes a bigger challenge will involve getting internal users comfortable with CompQuicks paperless workflow. Underwriters have a way of doing thingsa comfort zoneand getting them out of it will be an ongoing process, he says. The idea, in the end, is to allow underwriters to underwrite and not spend a huge amount of time chasing paper. If we allow them to focus on underwriting, the company as a whole will benefit.
The carrier writes more than a third of the workers comp market in New Mexico, and a large percentage of those policies are very small premium. That is not an easy area to be in, as a single medical claim on any of those policies can make it unprofitable, Thackaberry points out. As a result, we have to be able to underwrite with great care, and we need to be able to keep our processing costs as low as possible.
CompQuick is a J2EE application, running on Jboss, with Oracle 9i on the back end, Thackaberry states. We are running the app on a four-way Dell server running RedHat AS 3.0, he says. As with any app server, you need RAM, so [we] put 5 GB on the server. Performance has been great. Integration has been fairly straightforward. I have some very experienced and talented people working for me, and they have made the integration process go very smoothly.
The ROI on printing costs alone is going to be tremendous, reports Thacka-berry. We expect to recoup our investment in that alone in the first 18 months, he says. It is harder to quantify how a greatly increased ease of business will drive more revenue, but the consensus is this will make a huge impact. For us, [the project] is less about growth in size and more about doing it smarter.
ROBERT REGIS HYLE
Case File
THE PROBLEM
Ease of business and consistent underwriting were needed by New Mexicos largest writer of workers comp.
THE COMPANY
New Mexico Mutual Casualty Company
Web Site: www.nmmcc.com
Net Written Premium: $60 million
THE SOLUTION
CompQuick from Ravello Solutions
Web Site: www.ravellosolutions.com
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