Insurers look ahead: Middleware layers provide new approaches to business
My most recent experience purchasing car insurance was through the Web. I completed an online application, received a real-time rate quote and a detailed description of the approval process. The same day an E-mail confirmed the rate, and within three days I had a full package awaiting me in my mail box. I saved more than 20% compared to my previous provider.
Now imagine you’re a business owner in the Midwest. The recent tornadoes have devastated your headquarters and manufacturing facility. Because of peak volumes, the insurance company has contracted an independent adjuster who is notified by urgent E-mail and page that you’ve filed a claim. Attached to the E-mail is knowledge of the specific steps and documentation the person must complete. An application is executed within a secured, standard Web browser. A digital camera is used. That day all information has been gathered and is moved through the balance of steps-which may have been modified real-time to accommodate emergency conditions. Satisfied customer, retained customer and a new customer for additional products.
It’s a changing industry-one that demands new approaches to the business and its information.
Historically, the insurance industry has spent proportionately far less on information technology than the banking sector; that is due, in large part, to differences in the distribution channel. Banks have invested in branches and, therefore, the required infrastructure. Insurance companies have favored independent agents, providing one or more support centers to help with new business and claims processing.
Call centers and browsers ... future agent?
To survive and thrive, insurance companies are leveraging their call centers and the Internet as additional, high-margin distribution and service channels. The insurance call center has similar challenges to that of a bank; both must integrate multiple input channels with workload balancing while providing a universal view to the client relationship. Insurance companies have a large indirect network of agents, claims adjusters, etc. Access to customer information-both structured and unstructured-is critical to fulfilling the inquiry.
The most sophisticated call centers include integration across multiple systems: CTI, customer relationship management, data warehouses and multiple product-specific legacy systems. Workflow engines help traverse those varied systems, gathering and presenting information in a universal desktop; fax input and document scanning are needed for traditional correspondence processing. Document management systems house policies and procedures, outbound correspondence, E-mail and product marketing materials. Report output management solutions capture customer statements and daily transaction details.
Transacting business via the Internet is critical given shrinking margins compounded by current low interest rates. Simple products are offered directly online and through creative alliances with banks and other portal sites. Near-instant review and approval will become commonplace. Claims and customer service inquiries will initiate via the Web. Digital cameras and electronic signatures will become an integral part of the solution. Web-based scanning will address stray, non-electronic documents. And workflow will tie the entire process together, even when it extends to either side of a firewall.
Focusing on customer relationship management
While the call center is critical to servicing the retail customer, it is in the commercial and specialized businesses where insurers can more easily differentiate themselves. Any time you venture into lower-volume but high-value business, there is tremendous risk analysis, review and monitoring. The regulatory environment mandates strictly controlled documentation at risk of serious financial penalty.
As the value of the customer relationship increases, the need for documentation does as well. The reinsurance industry exists to spread risk across multiple participants. The agreements are unique and complex; internal review is rigorous and generally creates more documents than are required from the customer.
Departmental to virtual
The early implementations in the insurance sector were primarily for claims and new business processing for retail products. The "Blues" have been doing it for years-scanning HCFA claims, applying character recognition to the process and automating the data entry process. New business processing for simple products was handled with imaging, ICR and workflow. Complex products depended on the ability of workflow engines to manage work in process, pending queues, etc. But the systems tended to be in support of a specific insurance line.
Today’s leading insurance companies are revisiting their traditional legacy architecture. Newly designed middleware layers are standardizing communication between client applications and core data. The focus is on decreased time to market, customer relationship management and, as always, increasing business volumes without additional staff. The business demands are enormous-as are the potential returns.