Turn Documents Into Differentiators

Inside Track

Insurers can tackle documents as part of an enterprise content management strategy that could produce a significant competitive advantage.

BY CYNTHIA SACCOCIA

Insurers with a strategic view of document management realize important efficiency gains that equate to double-digit savings in both hard- and soft-dollar operating costs. What is certain is documents can be either an asset or a liability, and how insurers manage this part of their business often is a differentiator. Many insurance companies are drowning in content because they lack tools to manage documents effectively enterprisewide. As a result, they lack the capability to integrate documents to business processes, which creates inefficiencies. Harnessing documents proficiently and reliably is a tremendous task, but the benefits outweigh the pain of implementing new processes and solutions.

Todays document management platforms and tools are a new breed of technology whose full potential the insurance industry has yet to realize. By way of definition, document management is the administration of document-based processes to create, approve, store, and deliver different types of content interactively or in batch. Functions support retrieval, change, and reuse of content such as electronic and paper-based documents or forms. Document management applications primarily do the following:

Maintain a central repository for storage and retrieval of reusable content.

Utilize library services for version control, security, and approvals.

Store and index all types of content and file formats.

Execute multichannel publishing for electronic and print distribution.

Create, deploy, and retrieve documents and forms without redundancy.

Business Opportunities

Document management technology equips insurers with the tools to take advantage of present business opportunities such as:

Virtually eliminate manual labor-intensive document processes and minimize operational costs.

Reduce print, postage, and storage costs for hard-dollar savings.

Demonstrate compliant and secure controls to lessen regulatory risk.

Automate cross-functional business processes to streamline operations.

Reduce call center volume with easy-to-read statements, bills, forms, etc.

Design customer-centric communications and promote services that foster loyalty.

Develop target marketing and increase cross-selling promotions.

Standardize forms and content flow to streamline processes and gain operational efficiency.

Accelerate time to market in product development, underwriting, and sales.

Strategic Objectives

The deciding factors to deploy document management applications are in line with the industrys strategic objectives to control costs, manage compliant operations, and enhance customer service.

For example, document management applications are particularly helpful in policy production because they dramatically can reduce manual involvement, ensure accuracy and compliance, and enhance services to producers and policyholders. Policy production is predominantly a hard-dollar operational cost because of the cost of salaries, print, postage, and waste. Soft-dollar costs result from corrections and call center support. Insurers easily can reduce labor and production costs because automating policy production takes manual intervention out of the process. Automated policy assembly reduces expenses in paper waste and errors and provides the means to enhance cost effectively customer service. While many insurers still handle policy assembly manuallya labor-intensive process prone to errors and inefficiencyinsurers can gain substantial savings and operational improvements with an integrated document management system.

One of the key benefits of leading document management applications is the functionality to assemble complex policy packages. The policy package includes a variety of forms, determined by product line and regulatory requirements, such as schedules, endorsements, and policy amendments. The complete package must integrate these forms with other required content captured and created by auxiliary systems such as declaration pages produced by the policy administration system and the stored image of the application to complete the policy package.

Automation Benefits

Policy production automation offers benefits by enabling the insurer to do the following:

Reduce costs in the output process by electronically delivering a policy package to a print center for print and mail, either owned by the insurance company or outsourced.

Reduce print and mail costs in Web-based delivery of agent copies.

Eliminate costs for printing and filing of home office copies by means of electronic storage of content.

Enhance services and cross-sell opportunities with a personalized welcome kit and policy package.

Publish policy and contract pages for all lines of business, both aged or current.

Ensure content is compliant and consistent from one policy package to the next.
Central Support

Document management applications also help insurers reduce the high costs associated with forms management, for both data capture and compliance, because they support a central repository for consistency and reusability of content. It is important for insurers to separate forms management from marketing because of the key differences between the way insurers want to communicate and the way they have to communicate with agents and policyholders due to compliance and regulatory requirements. Centralizing this function is important for insurers to control the usability of forms throughout the enterprise.

The basic premise of a form is multiple departments use it, the wording and versions must be consistent, and the data captured is essential to business process workflows. Forms may include contracts, applications, declaration pages, endorsements, statements, and installment schedules, among other documents. Regulatory requirements at both the state and federal level often drive forms compliance concerning such matters as document wording and time to destruction. For example, state insurance departments dictate the wording for policy documents and forms, which varies from state to state making forms management a major challenge for insurers to control effectively.

Reliable Forms

It is clear insurers need a solution that helps them keep forms current, accurate, and compliant across the enterprise. Forms management automation offers numerous benefits, enabling the insurer to do the following:

Establish consistency in gathering and storing information collected in forms to ensure reliability of the data received.

Streamline the reusability of forms because many processes depend upon the same documents, wording, and versions every time.

Integrate the same form to multiple processes or workflows to eliminate costly redundancies in managing multiple forms and documents.

Minimize duplication in forms to reduce conflicts and discrepancies from one version to the next.

Enforce forms content across the enterprise to improve efficiency and reusability with control.

Eliminate dependency on preprinted forms to reduce dramatically storage and labor costs.

Gain production efficiency with the reusability of object-oriented content to reduce substantially the number of forms maintained.

Improve speed and accuracy in new product development for document creation and state filing.

Process Connection

Document management platforms and tools help insurance companies take advantage of the immediate opportunities to connect documents to the business process so that people can make better, faster decisions. For the insurance industry, the absolute volume of documents is overwhelming, and insurers report it is one of the most unwieldy resources to manage. Since documents are an operational driver, it is important insurers seriously consider how they can gain control over the movement and use of it throughout the enterprise.

What is apparent is document management is one part of an overall enterprise content management (ECM) strategy. ECM is an amalgamation of distinct and interrelated software applications that help insurance companies produce and deliver content efficiently, securely, and cost effectively. The tools and platforms that interact with and manipulate content can be catalogued under three categories: content management, document management, and records management. Within each category are assortments of tools that have similar attributes to support specific content types.

Content includes all forms of information: electronic and paper-based documents, multimedia files, e-mail, images, Web pages, and other communications. The retrieval and delivery of content is a force driving many business processes and can improve efficiency if done well. The historic approach to managing content for a defined task or a process no longer suits the need for information sharing and collaboration across the enterprise in a manner that is secure and complies with regulations. An ECM platform must be scalable from a single department to numerous users inside and outside the complex. Active administration of the wide range of content in structured and unstructured formats is integral for stability and usability.

With the right architecture to separate the high-value content from the junk, insurance companies can control content and turn it into an asset. Tools and platforms deployed for the full potential of ECM deliver a powerful combination of solutions for insurers that drive operational efficiency and manage resources at highest capacity. Each tool and platform plays a role in enabling content collaboration from department to department and from the insurance company to its customers. Insurers also can integrate key information systems such as policy administration and customer relationship management (CRM) for a tight alignment of content to business processes and operational objectives to maximize the value of ECM.

Decision-Makers

The insurance industry is content-centric, and significant pieces of content can influence decisions in areas such as underwriting and claims. The output of documents affects customer service. Web portals give access to customer content and agent-centric content. Mandates from state and federal regulators oblige maintenance of content in forms and determine timelines for their retention. There are other examples, but it is clear insurance companies manage a wealth of content and numerous operations depend on content in one way or another. Therefore, enterprise content management is a primary consideration for companies seeking to improve profitability through more efficient operations.

Insurance companies can overcome many operational challenges with innovative ways to create, manage, and distribute content that is consistent, efficient, and cost effective. Starting with document management is a good first step toward enterprise solutions and ongoing improvements in managing this unwieldy part of the business.

This article is based on TowerGroup research by , a research director in the insurance practice at TowerGroup. Saccocia can be reached at csaccocia@towergroup.com.