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November 24, 2002 at 07:00 PM
Because of the strict regulatory environment in which they operate, insurance companies are careful about adopting unproven technology.
However, with the maturation of the Internet and the need to maintain parity with competitors, many are now investigating how the Internet and related information management technologies can enhance their operations, improve business processes, reduce costs and increase revenues.
Internet storefronts may be the most visible application of technology for insurers, but improving backend processes largely invisible to the customer offers significant promise, and quite possibly, far greater potential savings.
Three critical processes drive much of the cost of doing business for insurers–policy production and archive/retrieval, customer/claims correspondence, and billing/invoicing. This article deals with how the Internet and other complementary solutions can improve the efficiency of these processes, lower their financial impact and ultimately, help grow the business.
For most insurers, creating a policy, making changes to it, routing it between offices, and printing and delivering it to customers has traditionally been a manual process. However, the Internet and specialized software for policy production and retrieval significantly streamline the exchange of information between agents/brokers and insurance carriers, lowering costs and reducing policy production cycles–and often doing in hours what used to take days or weeks.
Agents and brokers utilize these new tools to access forms and information from insurance carriers, complete the forms, and electronically transmit completed policies, notices and related information back to the carriers. This revamped process not only saves paper, postage and handling costs, it also significantly reduces the amount of time to get completed policies into the hands of customers.
The economics for electronic policy production and retrieval are compelling. An end-to-end document management system that enables online routing, viewing and editing of policies, as well as local retrieval and printing of previously issued policy documents, can save an insurer more than half a million dollars in the first year alone.
Converting manual paper transactions into electronic workflows streamlines costly bottlenecks and improves the speed and quality of customer service and satisfaction. In addition, such a system ensures that all forms are current, consistent and correct, reducing risk exposure.
As insurance companies grow, the customer correspondence process often becomes disjointed. So many lines of business and so many different production methodologies within the same company can result in claims correspondence that is inconsistent and unprofessional.
In addition, the time it takes to produce correspondence depends on what systems each individual uses. Finally, many companies rely on the old standby, paper, and are unable to automatically deliver formatted correspondence by fax or e-mail, even when customers prefer these methods.
The challenge is to develop systems that standardize the look and feel of correspondence, allow for customization based on specific data, and automate the process so that customers receive critical information swiftly in the format they desire.
Automated claims correspondence solutions should also be tied into electronic storage systems, enabling instantaneous retrieval by customer service representatives while they are handling service calls.
The good news is that thin-client applications that leverage the Internet for production, delivery and retrieval of claims correspondence are producing encouraging results. These solutions make available at every workstation preformatted templates that representatives populate with transaction-specific information and then distribute based on customer preference, whether e-mail, fax or print.
Company representatives can store, retrieve and view correspondence via a browser, eliminating unnecessary printing. These solutions also reduce the time it takes to search for previous correspondence or to update ongoing contact with customers, enabling customer service representatives to spend more time actually working with customers.
