Hands Off: Manual Processing Had to Go

In today's world of instant gratification, waiting 30 days for a policy to be issued is no way for an insurance carrier to do business. CNA Canada knew this and Lynne Von Wistinghausen, vice president of operations and information technology and her team saw to it that something was done.

"The specific challenge was our broker turnaround time to issue policies faster and pull data out of a system in order to have better information and become more efficient," she says. "We needed to free up capacity within our company so we could reallocate our resources to higher-valued work."

Commercial fleet for CNA Canada was processed manually, which was fine when the carrier began that line of business, but the product's success caused more problems.

"When we started this product line it was very small and wasn't worth putting automation into it, but as it started to grow we ended up putting more bodies into processing the line of business," she says. "By the time the underwriting department finished binding a policy it was 30 days later."

The carrier couldn't hire enough bodies to keep up with the demand, according to Von Wistinghausen.

"Nothing was captured when it came to the difference between our book rate and our market rate," she says. "It was all Excel-spreadsheet based. We couldn't pull information and report on our profitability properly when it came to rate and retention for the commercial auto line."

The carrier employs a homegrown administration system for its other lines of business and Von Wistinghausen didn't believe adding the commercial auto line to the legacy system was a viable solution. Building their own solution for the commercial auto line was not considered a good use of resources, either.

"We wanted to get out of the software development business and focus more on insurance," says Von Wistinghausen. "When you develop something from scratch you end up having to do way more maintenance."

CNA Canada looked at a number of commercial software vendors, but none on the initial list had a solution that the carrier felt was a good fit, according to Von Wistinghausen.

"They could do one thing well, but not other things," she says. "Plus, the prices they were charging were out of our ROI."

In a second look through policy system vendors, CNA Canada came across MajescoMastek and its STG Policy Administration system.

"They are very responsive and customer oriented," says Von Wistinghausen. "They started their system in the commercial auto business, so they had a good framework. Plus, the business functionality was there."

Counting the initial lack of success in finding a vendor, it took about 18 months for CNA Canada to finally select MajescoMastek. From there, it took just 10 months to get the solution on line in March of this year.

Many of the issues in the process involved Canadian specifications and the carriers are regulated in operating a fleet business inCanada.

"We entered into a contract to develop the commercial Canadian aspect of the solution, so that was developed on top of what MajescoMastek already had in a cloud-hosted environment," says Von Wistinghausen. "They do everything. We bought a license and paid for the customization."

The STG solution has the ability to communicate with CNA Canada's homegrown solution, so there are integration points that afford the carrier a national view of their policies acrossCanada.

As the project progressed, the carrier determined that conversion of the existing policies was a key issue.

"We wanted to be live as soon as possible because it took us so long just to find a vendor," says Von Wistinghausen. "We initially hoped to be live with something by the fall of 2011, but we realized that was going to be impossible."

Typically, it takes a full year for insurers to gain any benefits from a new system if it is introduced into production on a renewal-only basis, according to Von Wistinghausen.

"We wanted to get the ROI going, so when we went live on March 5, MajescoMastek and our IT team did a one-time data dump of the highest level of information," she says. "We hired two contract resources to spend three months putting in all our policies. We're at the point now where we have policy data through the month of November, so we're getting the business value right away."

Von Wistinghausen believes in the adage: no pain, no gain. She knows, though, that it is less painful going through the transition than it would be to stay with the old workflow.

The benefits have been quick. By late May, Von Wistinghausen had already moved two staffers to more high value-added work that is helping the carrier's brokers to process work faster.

"We've gained the efficiency we were looking for," she says.

A second painful area involves the change in behavior among the business users because the company changed its business processes from start to finish.

"It takes time to get people up and running," says Von Wistinghausen. "There were pockets of user issues."

The new policy system allows CNA Canada to provide a better service to its brokers and expand its business without having to add resources.

"Before, in order to expand we had to add people," says Von Wistinghausen. "Now we can expand without having to add resources on the back end to do administrative work. Instead of adding people who can type fast, we can add people who can help make us more money, which is exactly where you want to put them."