Bringing Case Management

Best Practices to
Insurance Underwriting
An InformationWeek Financial Services Webcast
Sponsored by
Webcast Logistics
Today’s Presenters
Kathy Burger
Editorial Director
Insurance & Technology

Benjamin Moreland
Senior Analyst, Insurance
Celent

Joseph Dzigiel
World Wide Industry Solutions Executive
IBM Enterprise Content Management
Today’s Agenda
• Where do insurers stand in terms of resources,
challenges/new requirements, opportunities for
improvement; areas of investment/focus?
• Challenges related to underwriting – addressing
costs, processes, technology to ultimately drive growth.
• Getting to “smarter” (and more profitable) underwriting
through advanced case management.
• Interactive Q&A session.
Insurance Industry Challenges –
Some New, Some Old, All with IT Implications
• Realities of the post-crisis/post recession environment:
growth is a top priority – along with profitability,
governance, risk management and regaining trust.
• More clarity (and less fear?) on the regulatory front –
some uncertainty remains (what should you plan for?)
• Compliance – not a new requirement, but more scrutiny,
transparency, accountability (external & internal).
• Increased focus on deliverables (speed-to-market,
reports, retention, compliance, etc.) and metrics (ROI,
TCO, profitability, etc.).
• IT budgets grow, but efficiency and “doing more with less”
are SOP.
Focusing on Insight & Performance
•Analytics, BI, information management – Tools and
platforms that enable insights into customers, transactions,
markets, risks – to achieve actionable information that drives
service, pricing, product development, compliance.
• Content management – beyond documents to
encompass all (new) sources/forms of content;
beyond workflow, too.
• Infrastructure, core systems – overcome legacy
limitations to eliminate silos, enable secure & consistent
transactions/interactions, leverage new capabilities.
• Governance and automation – process improvement for
accountability, compliance, speed & service.
Key Mandates – Navigating the Seven Cs
• Customer Experience – enhancing service, interactivity,
communications, responsiveness, (policyholders, workforce,
producers).
• Collaboration and interaction, self-service, customization
(Web 2.0, social networking, content/info access, etc.).
• Core systems – time for PAS/underwriting/claims
upgrades?
• Compliance – what’s new is broader scrutiny.
• Channels (multi – new platforms, real time, etc.);
next-generation of “Anywhere/Anytime.”
• Consumerization of tech changes expectations (and
possibilities) – for customers and workforce.
• Credibility – easiest to work with; restoring trust & loyalty.
 May 17, 2011

Marrying BPM and ECM in the UW

and Claims Processes
Advanced Case Management Solutions for
Insurance

Benjamin Moreland

Ben Moreland
Senior Analyst
bmoreland@celent.com

A member of the Oliver Wyman Group CONFIDENTIAL | www.oliverwyman.com

About Celent

 Celent is a retained advisory service providing our clients with research

and consulting on technology and business issues
 Celent is focused totally on financial services: insurance, banking, and
securities
 Research
– How technology delivers business value
– Vendor Comparisons
– Technology Trends and Predictions

 Consulting
– Vendor selection
– IT strategy
– Market entry and positioning

© 2011 Celent  www.celent.com filename.ppt 8

Common Business Drivers

 Speed to Market
 Increase Market Share/Revenue
 Ease of Doing Business
 Decrease Operating Costs
 Greater Agility & Flexibility
 Greater Customer Satisfaction

Business Goal Enablers

 Process Automation
 Better Decisioning with Better Information
 Greater Customer Understanding
 Collaboration
 SOA/Templates

© 2011 Celent  www.celent.com filename.ppt 9

 In 2010 CIOs Plan for Big Increases in Claims, UW and
Others Systems

0% 20% 40% 60% 80% 100%

Policy Administration and Service

Underwriting
Claims
Distribution & Sales

Actuarial Product Design

Billing

Customer Service Contact Center

Producer Service Contact Center

Reinsurance

>12% 6%-12% 1%-5% 0 (1)%-(5)% (6)%-(12)% <(12)%

Source: Celent 2010 CIO Survey

© 2011 Celent  www.celent.com filename.ppt 10

The UW/Claims Mission: Balancing Speed, Accuracy,
and Fairness
 Speed
– Efficient and effective review processes
– Controlling financial losses
– Optimizing claimant experience

 Accuracy
– Accurate loss analysis
– Paying no more and no less than what is
required
– Not paying fraudulent claims

 Fairness
– Make best underwriting decision with available
information
– Fair to claimant and to insurer
– Meeting corporate financial and image
objectives

© 2011 Celent  www.celent.com filename.ppt 11

Creating Business Value with BPM and ECM

 Insurance is a process, rules and data/information business

 Business Value of BPM

– Automated, consistent processes

 Business Value of ECM

– Getting the right data to the right person at the right time

 Advanced Case Management

– Bringing the business value of BPM and ECM to case management

© 2011 Celent  www.celent.com filename.ppt 12

BPM Elements

Process design &

Process Process execution
development
repository engine
environment

Execution
history

Analytics, modeling Monitoring &

& optimization management

Value of BPM is integrating all 6 elements into the business

process

© 2011 Celent  www.celent.com filename.ppt 13

Ten Recommendations to Increase BPM Business
Value

 BPM Governance Recommendations

Establish Define Evaluate Create Inventory

BPM BPM Business BPM BPM
Governance Strategy Processes CoE Solutions

 BPM Project Recommendations

Document Design Define Evaluate Identify

Business SAD Process Integration Data
Process Path Metrics Effort Owners

© 2011 Celent  www.celent.com filename.ppt 14

ECM Elements

Workflow Content Management

 Workflow definition  Authoring
 Work prioritization  Security
 Alerts  Alerts
 Task management  Publication
 Reporting/Analytics  Reporting/Analytics

CollaborationPublishing & Delivery

Document Management
 Composition  Template design
 Document tagging/metadata  Document generation
 Capture & storage  Rules management
 Access  Output management
 Reporting/Analytics  End user functionality

Value of ECM is orchestrating the information to the right

person with the right access in a easy to digest manner
© 2011 Celent  www.celent.com filename.ppt 15
 NB/UW and Claims Technology Enables Claims
Initiatives
EAI, Messaging,
SOA

Portals

BPM & Rules Mgmt

Analytics Loss
Estimation
NB/UW,
Integration,
Document Core Claims SOA
Automation

Litigation Bus. Partner

Mgmt. Mgmt.

© 2011 Celent  www.celent.com filename.ppt 16

An Example: Fast Track More Using Inner Ring
Technologies
 Adjusting claims is complex . . .

Repair
Restore Treat

Field Legal
Appraiser

Int./Ext.
Data

Desk
Claimant
Adjuster
Litigate
FNOL
Outcome
Deny

Financial
Pay
Fraud? Subro?

SIU Subro
Unit

© 2011 Celent  www.celent.com filename.ppt 17

 . . . Or Is It?

Claimant
FNOL Deny
Outcome
Pay

STP

© 2011 Celent  www.celent.com filename.ppt 18

Legacy vs. Modern Technology

 Legacy manual processes and decisions depend on:

– Training
– Policies and procedures
– Supervision
– Audits

 Today, automating processes and decisions use:

– BPM Solutions
– ECM Solutions
– Rules Engines

© 2011 Celent  www.celent.com filename.ppt 19

 The Value Propositions for Inner Ring Technologies

 Making processes and decisions more

– Efficient
– Effective
– Consistent

 Providing real-time and retrospective process and decision information

 Enforcing and documenting compliance

 Creating agility

© 2011 Celent  www.celent.com filename.ppt 20

Summary

 NB/UW and Claims are facing similar challenges:

– Manual, inefficient processes
– Users expecting faster reponse times
– Exception tasks in standard processes
– Regulations
– Claims: Fraud detection

 Advanced Case Management provides solutions to this issues

through the marriage of BPM and ECM solutions.
– BPM: automating and adapting business processes with exceptions and
rules and bringing multiple sources of data to tasks
– ECM: bring the right information (docs/content) to the right
person/people (UW/claims handler, etc) through collaboration to make
the best decision (automated/manual)

© 2011 Celent  www.celent.com filename.ppt 21

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Advanced Case Management

In Underwriting

Joe Dzigiel
Director Industry Marketing
Insurance Industry
IBM Software Group
jdzigiel@us.ibm.com

May 17, 2011

© 2011 IBM Corporation

Case Management in the Insurance Industry
evolved over time:
● The introduction of software automation to the principal
business processes – replacing parts of the old manila folder

● As new LOB (lines of business) were added

● Challenges and experimentation in distribution channels

● Acquisitions

● Modernization of older transaction based legacy systems

Resulting in today's legacy of:

● Multiple line of business systems processing cases for the

same customer
● Lack of standards, inconsistent processes
● No single view of a customer’s case history
23 © 2010 IBM Corporation
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What is a Case?
● Customer related issues that cannot be resolved directly by the
LOB business or services applications.
● Issues that involve significant risk or loss of revenue and damage to the
customer relationship.
● The manifestation of lifecycle information about the insured-broker-carrier-
relationships.

Examples: Also Known as:

• New Policy Application • Agency File
• Disputed fees • Underwriting File
• Loss Prevention Report • Customer Complaints
• Disputed claim • Claim File
• Financial Condition • Premium Audit File
• Fraudulent activities • Market Conduct Review
• Customer records disclosure • Litigation
• Service complaint © 2010 IBM Corporation
 The very existence of case management
is proof that:
1.Tacit Knowledge workers cannot be eliminated
from core insurance processes

2.Something up stream in the business process

cannot resolve the issue and needs attention

3. It’s not possible to predict all outcomes or replace

experience in insurance

4.There will always be exceptions to the rules

25 © 2010 IBM Corporation

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Underwriting- A Complex Environment

Ex: New Business Acquisition (Front Office Quote Process)
Consumer Agent accesses Agent receives Agent finalizes terms Customer
contacts agent multiple sources quote and carrier with carrier until receives
for a quote over multiple negotiates coverage policy issue documents
channels

Policy quote Policy

request Underwriting Modify approval Policy
quote issuance

© 2010 IBM Corporation

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Simplifying the Underwriting Process- Challenges to

Success

• New process is designed for “Blue Sky”

• Processes are viewed as linear, sequential
• Common exceptions are anticipated
as tree branches- no adhoc
• Many manual steps still exist
• Inconsistent underwriter skill and experience

© 2010 IBM Corporation

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Advanced Case Management leverages Active Content, Analytics,

Process and Collaboration
Content detected Automatically filed,
Triggered AND UW initiated processes
Analyzed

Insurance Application Under Writer Evidence

Ordered
Credit Report
Loss History Application -
Application - Signed
initiates Timer - Overdue
process Evidence

Case Management
Loss History
Negotiate,
decline,
additional
info required

Credit, MVR, MIB Evidence Received -

Reports Initiates Under Writer
Correspondence & notification when
forms automated complete

Risk Accepted Conference/

– Issue Policy Referral with
Experts
 Transforms execution model to eliminate time waiting or checking
for documents and information
 Enables Dynamic Tacit Knowledge Worker Processes
 Enables regulatory compliance
28 © 2010 IBM Corporation
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Optimizing case management for underwriting…

Advanced Case Management

Case Application Case Case
Design Case Templates
Activities Analytics

Case Runtime Case 360o View Case Lifecycle

of Case Case Context
Framework Infrastructure Management

Social Monitoring
Content Events Workflow Rules Collaboration
Software & Analytics

people s process s information

● Unites information, process and people
● Delivers optimized case outcomes
through analytics, rules, collaboration
and social computing
● Supports work management of
structured and unstructured activities
● Delivers trusted information to the case
● Manages and governs entire case
lifecycle
● Provides extensive ecosystem of partners
delivering case management solutions
● Shortens time-to-value with better tools,
out-of-the box solutions, and templating
capabilities

© 2010 IBM Corporation

What are the obvious quick hits for implementing
Advanced Case Management?

• Consolidation
Case history consolidation via the creation of master case
management customer file
• Process Optimization
Introduction of ACM to ensure the optimum case worker productivity and
improved resolution cycle times
• Compliance with corporate and regulatory policies
Rules engines help to drive predicable outcomes, and compliance with
corporate and regulatory dictates
• Analytics
Use of analytics to understand what steps in an existing business
process need to be changed in order to improve future case outcomes
• Real-time Analytics
Provide the customer facing personnel (contact center, knowledge
workers) with real-time access to all case history and proactive coaching
on ways to resolve a case

30 © 2010 IBM Corporation

Compelling ROI to be found?
Use of advanced case management to render the
process intelligent, proactive and predictive, resulting
in:

● Analytics help risk identification in the business process

resulting in improved fact-based decisioning

● Improve Agent/Broker advocacy

● Avoid loss of revenue of an existing customers

● Improved risk/exposure decisioning

● Optimized processes resulting in improved contact/help

desk, first call resolutions

● Reduced compliance violations

31 © 2010 IBM Corporation

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Summary
IBM Case Manager can help you make better decisions
faster…
• Assimilate large and growing volumes of information
• Access information trapped in content
• Monitor internal and external data and information feeds
• Monitor and capture content from social networks
• Collaborate internally and externally
• Analyze patterns and trends to support process improvement
• Analyze customer information in real time to support customer-
facing personnel
• Reduce operation risk in real time
• Support fraud interdiction in real time
• Improve regulatory and corporate compliance

© 2010 IBM Corporation

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To Learn More:
http://www-01.ibm.com/software/data/advanced-case-management/

© 2010 IBM Corporation

Q&A
Please Submit Your Questions Now
Kathy Burger
Editorial Director
Insurance & Technology

Benjamin Moreland
Senior Analyst, Insurance
Celent

Joseph Dzigiel
World Wide Industry Solutions Executive
IBM Enterprise Content Management
Resources

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