Document Automation Faces New Industry Challenges Older solutions are unable to meet todays stringent demands

By Neil Betteridge

The insurance industry continues to face significant challenges. Consolidation activity in the life and health sector is not expected to slow down any time soon, and carriers are finding they must be more flexible, responsive and efficient than ever to keep pace with increasing competition from different market players and product offerings.

Ironically, while consolidation implies simplification, it in fact adds a greater variety of products and services into the mix that need to be managed. This has a direct impact on the role of document generation and deliverywhich are the mainstays of the industry.

Having the right product in the right hands at the right time (error-free and up-to-date) is absolutely critical to maintaining revenues and profitability. However, any regulatory change and any alteration to product mix, even a simple information update, can involve extensive labor, integration and document coding costs, ultimately impacting bottom line resultsnot to mention increasing the risk of potential errors.

The need to manage change to even one single item can be a mind-boggling exercise in logistics. But it must be managed efficiently, since even the most minor of issues can create a significant risk. A single alteration, for example, might affect 20 to 50 state variations for a single insurance policy form. Responding to even minor changes such as these can increase the risk of redundancy and clerical errors while adding to the administrative burden.

There is no question that the quality, accuracy and consistency of documentationfrom policies and booklets to statements and personal correspondencealso directly impact an insurance companys credibility. If not managed properly, ones credibility factor, and competitive advantage, can be jeopardized.

While most insurance and financial services operations have automated some document generation on a basic level, many are finding that these first-generation solutions are neither flexible nor scalable enough to meet present day needs. They often are tied to older systems or require extensive modification and integration by IT programmers to interact effectively with administrative functions. These tend to be slow and costly, thereby creating a barrier to business agility and responsiveness.

Also, many of these automation efforts have been applied on a departmental basis and as such, cannot easily be expanded to encompass other functional areas within an enterprise. And because document generation and production is an extremely complex function that requires extensive specialization, it is one key area that is not included in the recent generation of enterprise content management (ECM) solutions, the host of technologies that includes imaging, Web content management and multimedia.

Therefore, even with the increase in ECM implementations, it is still not unusual to see organizations running multiple platforms and document generation solutions within various divisions. This is a challenge that increases as acquisitions continue to bring more variables into the equation.

In other cases, document automation solutions are fragmented according to function. For example, policy production may be managed separately from customer service correspondence. All of this translates into greater costs, reduced productivity and unnecessary duplication of effort.

What is needed today is a more comprehensive approach to document automation, one that better leverages multi-channel delivery to improve flexibility, simplifies business processes and shares information in real time. The industry is now at a point where this has become affordable and feasible.

So, what has changed today that can help insurance organizations better manage the document automation process? For one, technology has evolved. Open systems and Web-based capabilities have made it much easier to develop highly flexible, scalable solutions that can work across multiple business applications. The availability of standards-based integration technologies (such as XML) can facilitate the process and eliminate the need for custom integration and the associated costs. In addition, the lower cost of storage has created a much more attractive price/performance ratio supporting the business case for providing online access to electronic copies of documents for agents and customers.

Attitudes also have changed. When document automation technologies were introduced, the focus was on cost cutting and efficiency. As such, these solutions originally were focused on eliminating manual effort and redundancy. Even for those who were early on the automation path, there is still much that can be done in the cost-cutting area. Many organizations may have overlooked the potential of document automation capabilities for certain lines of business or document types for further savings. At the same time, these businesses also are seeing that beyond the immediate “fixes,” document automation can deliver much more to the business process equation.

With the increased acceptance and usage of Web-based services, carriers now can look beyond the internal document production cost/efficiency rationale to leverage multiple channels (i.e., print and mail, fax, e-mail and Web) to deliver generated documents, as well as to re-engineer overall business processes. They can leverage existing or planned document or content management solutions to deliver operational excellence through increased productivity by providing quick and easy access to information at the right time in the right business process context. They also can build from this foundation to extend business capabilities to channel partners and in some cases, end customers.

Electronic access and delivery also allow organizations to use a shared service approach to better control and manage document creation and distribution more efficiently while ensuring consistency throughout the process. As an adjunct to core administration systems, modifications and updates can be implemented throughout all departments and all relevant document types through a single source, at less cost.

This centralized management approach also addresses ever-increasing sensitivities in the areas of privacy, risk and compliance. As we all know, the need to ensure proper handling and accuracy of documents is absolutely critical to survival.

Once we enter the realm of electronic access and delivery of documents, the potential for business process improvement is almost limitless. One area in which we expect to see interesting developments in the months to come is in the transition of electronic documents to dynamic documents that move their recipients from passive viewing to engaged interaction, providing a vehicle that can be used to up-sell and cross-sell related products and services.

By way of example, one could generate electronic documents with embedded hyperlinks that could link readers to specific sites to promote and drive self-service and generate new sales opportunities. A dynamic document also can enhance the end-user experience and simplify the reading of complex documents by providing dynamic links for specific subject areas or glossary of terms, etc. Electronic capabilities also can be used to continue to extend functions and/or documents to additional audiences.

The need for document automation is not new. Early automation attempts have delivered a number of rewards in terms of cutting costs and improving quality. As the industry continues to face competitive challenges on many fronts, that is simply not enough. The time has come to revisit the issue of document automation and establish where organizations can leverage technology to gain even greater efficienciesfrom reducing overhead costs and consolidating processes to improving accuracy and efficiencyand engage a wider audience in a more dynamic way.

Neil Betteridge is director of marketing with Markham, Ontario, Canada-based InSystems Corporation.


Reproduced from National Underwriter Edition, August 5, 2004. Copyright 2004 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.