Business Process Integration Can Help Solidify Carrier-Agency Partnerships

Where do these crucial carrier processes break down?

The answer is surprisingly straightforward. A carrier may be able to receive agency data electronically, but this does not mean the carrier magically can transfer the ACORD XML data into its policy administration system, rating system and other critical back-end applications. The data must be transformed and entered into many different systems.

Each system typically holds only part of the answer for the particular business process that will fulfill a single agency request. Carriers generally end up handling these ACORD transactions through batch jobs or by re-keying data, causing long lead times and driving up operational costs.

In the past, some carriers spent millions of dollars and months at a time on integration projects, scrambling desperately to write custom code that attempted to tie together the back-end systems. But as soon as the carrier plugged one hole, a new agency would come on board with a different set of business and technology requirements, and the integration dike would burst once again. In addition, standards changed frequently and carriers struggled to find ways to handle new data requirements and transactions.

IT budgets are far more limited now, and carriers want immediate results that will have long-lasting effects. They want a repeatable solutionone that does not force them to start over each time a new agency or intermediary is introduced or a new external service is required.

What is needed is a straight-through processing (STP) framework that helps automate typical carrier processes that involve multiple systems. One such framework called business process integration (BPI) has been gaining momentum, based on its ability to address integration problems rapidly and show immediate results.

In the context of integration technology, a business process refers to any multi-step activity (issuing a policy, for example) that manipulates data and coordinates business logic. Business process integration refers to the automation of these business processes and business logic, usually by interacting with several different types of back-end systems.

BPI has garnered attention because it is a top-down, business-focused approach to integration. BPI technology is easy for the business community to use and understand because a businessperson can model a business process without worrying about specific technology requirements. A typical business process model might look something like the figure accompanying this article.

Carriers can use BPI to automate business processes (such as issuing endorsements or certificates of insurance) using functionality and data from existing systems, regardless of the technology with which these systems were developed. As the graphic illustrates, the businessperson does not need to specify what system or database is used in each step. Thus, the process is reusable because it is not bound to a specific technical implementation.

This idea of reusable, repeatable integration solutions is critical. No two carriers have the same back-end systems or identical data requirements, but most have similar business processes. Every carrier must accept application submissions, order underwriting reports and track them as they come in, provide quotes, respond to agency requests, issue endorsements, and so on.

A good BPI solution can provide predefined processes that give carriers a valuable jumpstart. For example, carriers can use BPI technology to accept ACORD XML data streams from intermediaries, and based on the content of the data, route the information to the appropriate business systems. This routing is accomplished by connecting to the various systems using point-and-click wizards that do not require coding.

A carrier who uses BPI to add a new agency or intermediary can reuse the same processes. If new processes are warranted, carriers can create them rapidly and integrate them into the business to support new agency and intermediary transactions.

BPI is an affordable, simplified approach to integration that allows companies to rapidly eliminate manual handoffs, complicated batch jobs and other inefficient processes that traditionally have blocked the path to creating the real-time, round-trip transactions that carriers and agents have long been striving to achieve.

At the same time, BPI greatly simplifies the view of the business. When dealing with multiple insurance forms, complex functionality and the endless nuances of proprietary systems, it is easy for carriers to tumble into the abyss of technical details and lose sight of business objectives.

BPI can help give carriers the focus necessary to drive new business by providing faster, better agency service.

is director of marketing and business development for Metaserver Inc., based in New Haven, Conn. He can be reached at [email protected].

Reproduced from National Underwriter Edition, May 19, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.