18 of the Most Effective Uses of Technology in Insurance

At Celent's Innovation and Insight Day in Boston, 18 IT projects were recognized for successfully improving efficiencies, bringing new growth, reaching new markets and more. This includes Celent's Model Insurer of the Year award-winner, a multi-billion dollar insurer that modernized with a global claims platform and customer portal.

AAA Northern California, Nevada & Utah Insurance Exchange - Policy Administration

AAA Northern California, Nevada & Utah Insurance Exchange - Policy Administration: In 2011, the Insurance Exchange utilized a highly effective change management program to implement a new policy administration system. Rolling out a new policy administration system (PAS) for new California auto business was the first part of a larger replacement and integration project involving six legacy PAS and three legacy billing systems. The rollout experience exceeded expectations. More than 2,500 staff members have browser-based access, and more than 1,000 staff members use the system to quote, bind, and manage California auto policies in direct distribution; the new system improved efficiency; policies on the new PAS can be sold about 33 percent faster than with the old system; and training new staff members is quicker because sales and service workflows and screens are the same.

Allstate Financial - Billing

Allstate Financial - Billing: Spurred by the need to adhere to Payment Card Industry - Data Security Standards (PCI-DSS), Allstate Financial took the opportunity to do more than implement secure payment processing with credit cards. They reengineered and automated their credit card payment processing, recurring payments, refunds, and accounting processes. As a result of this initiative, Allstate Financial networks no longer store actual credit card information. This data is now sent directly to the payment processing vendor in near real time.

Allstate Financial - Risk Management

Allstate Financial - Risk Management: Prior to the establishment of the framework in 2010, Allstate Financial lacked the ability to utilize its immense data store—over 40 million transactions dating back to the inception of all deferred annuity contracts. Business reporting relied on rolled-up data and assumptions. Since the annuity policies were on a legacy policy administration system that had evolved over time, it was a significant task to document the attributes on a time dimension basis and map them to a standardized data model. It was also challenging to marry the legacy data with the information in the data warehouse to create appropriate universes for tools to leverage the data for analytics and hedging. The ALM Data Framework initiative established a single platform in the data warehouse that eliminated the use of operational data stores and legacy reporting environments to rationalize reporting and diagnostics for all granular-level data with adequate history.

AXA UK - Risk Management

AXA UK - Risk Management: The Mapflow system provides a single, central portal for all AXA UK underwriters to access the data they require to make informed underwriting decisions, including policy information, perils models, and historical risk management reports, etc. It provides a bulk assessment of addresses versus an individual address basis. By providing an automatic view of the risk associated with all the policies in a book of business, the underwriting process sees large efficiency gains. Additionally, with automatic updates processed every night, including all cancellations and additions of new policies, the portal is always current with the most up-to-date information, enabling accurate reporting and analysis of exposure. The Mapflow system is available 24/7 and is accessible across various platforms including tablets and mobile cellular technologies.

CNA - Billing

CNA - Billing: In 2011, in an effort to make it easier for agents to do business with CNA, the insurer embarked on a journey to set a new standard for functionality and flexibility in billing with a custom-built agent portal called Agency Bill Pay, an online billing system that allows agents to reconcile bills, instantly view payment discrepancies, and submit disputes electronically. First introduced to a small group of pilot agents, Agency Bill Pay was fully implemented in January 2012. Built in-house to address agent requests for a streamlined, paperless approach to process and pay CNA bills online, the CNA’s Agency Bill Pay solution offers agents billing services that are not being offered by competitors.

CNA - Claims

CNA - Claims: After years of testing various methods of identify fraud, in 2011, CNA’s Special Investigations Unit began using SAS Fraud Framework for Insurance in four lines of business: workers compensation, general liability, commercial auto and commercial property. SAS Fraud Framework for Insurance integrates external data from sources like NICB. SAS worked closely with CNA to build the predictive models based on the company’s historical experience with fraud investigations. Using these models, CNA now runs weekly analyses against its structured claims data as well as its unstructured text notes from adjusters. In a typical week, CNA is reviewing about 100 alerts a week with a 20 percent hit rate for follow-up investigation. By the end of 2012, CNA had recovered or prevented payment of fraudulent claims totaling approximately $2.1 million, directly attributable to the SAS Fraud Framework.

Friends First Life Assurance Company - Claims

Friends First Life Assurance Company - Claims: Working with FINEOS, in October 2011 Friends First fully automated all stages of the claims and payment processes for its Income Protection, Hospital Cash, and Critical Illness lines of business. The FINEOS claims system allowed for greater segmentation of the Income Protection claims portfolio so that skilled resources could be assigned to the highest priority claims allowing the company to focus on improving recovery rates and claim review processes. Friends First also utilized automated work allocation, routing, and reminders to identify and eliminate process bottlenecks. Payments now include automatic recalculations for changes in circumstances. The integration of the claims and policy administration systems reduced duplication and data input errors through the use of a single data entry point.

Genworth Financial - Claims

Genworth Financial - Claims: A new claims system, which became a 12-month implementation centered around the company's Lifestyle Protection Insurance division consolidating its legacy platforms onto a single platform, was original the result of an effort to improve the customer experience. Now, LPI has an in-house claims operations team that provides full end-to-end claims processing. The web-based customer portal automates much of the claims process—online claims require 20 percent less effort than those managed via post or via phone. The claims duration for online claims has been reduced by 30 days, which translates into a 5- to 10-percent direct reduction in claim reserves.

Great American Insurance Group - IT Management

Great American Insurance Group - IT Management: In January 2012, GAIG opened its Innovation Lab (“iLab”), an IT initiative that takes six IT employees away from their normal jobs for six weeks, and gives them several broad challenges, the most important of which is "create something that will benefit the company." This rotating, dedicated R&D/Innovation team allows IT teams in all disciplines (application and infrastructure) to join forces to support their shared, core value of collaboration—in 2012, five innovation projects were completed with unique results.

Hiscox USA - Life Insurance Distribution/Illustrations/New Business

Hiscox USA - Life Insurance Distribution/Illustrations/New Business: One of Hiscox's competitors in the small business market was SeaPass and its internal insurance agency, BOLT. To increase distribution, in 2012, Hiscox decided to leverage SeaPass' multimillion dollar technology infrastructure by working with its leadership team to change the relationship from competitors to partners. Within eight weeks of the start of their partnership, SeaPass built a link between the BOLT Platform and the Hiscox direct website so that prospects coming to the BOLT website or service center could quote and bind coverage on Hiscox products in real time. This innovative shift turned HIscox and BOLT into partners and produced gains for both organizations.

Industrial Alliance Auto and Home Insurance - Product Design/Definition

Industrial Alliance Auto and Home Insurance - Product Design/Definition: Industrial Alliance sought to address the tragic social problems caused by dangerous driving habits of younger and less experienced drivers in the 16-24-year-old segment. They used the concept of telematics to offer incentives to youngsters to improve and maintain responsible driving behavior, with an emphasis on reducing fatalities. Innovation and the application of new technology was a driving factor that allowed a relatively smaller Canadian insurer to successfully address a niche market that previously did not exist, and had actually been avoided by traditional underwriters. Their approach generated much media attention, portrayed them with goodwill, and quickly created a new base of younger policyholders in a relatively short timeframe.

ING U.S. - IT Management

ING U.S. - IT Management: The overarching goal of the project was to create a role-based framework to manage the end-to-end user access lifecycle at ING U.S. while empowering the users of this process to make accurate and consistent user access decisions that align to the employee’s job function. The implementation of this model provided quantifiable benefits including: a fuller understanding of how access is used across the enterprise and its relation to job function; reduction in administrative overhead; improved user productivity; and closure of security gaps related to the current user access management process. The key features ING U.S. has implemented or intends to implement going forward are role-based controls covering each in-scope application, automatic user confirmation on job transfer, automated revocation of access upon termination, and integration with Oracle Identity Manager (OIM) for full lifecycle management and automation.

Jewelers Mutual Insurance Company - Infrastructure and Architecture

Jewelers Mutual Insurance Company - Infrastructure and Architecture: In approximately one year, Jewelers Mutual installed the following new systems to transform its Personal Lines operations: policy administration, billing, claims, and document production. The company also built a new data warehouse and reporting system and completely redesigned business processes and workflows. To ensure a successful project, Jewelers Mutual organized specialized teams dedicated to the development of each core system, change management, business process redesign, organizational redesign, and human resource management. In addition to other areas of business growth, Jewelers Mutual has gone from zero new business applications originating from mobile devices in 2011 to thousands in 2012. Also, the automation of the Auto-Pay feature has increased “opt-ins” to nearly 50 percent of all new business applications, and customers can now pay their premium invoices online.

L&T General Insurance Company Limited - Underwriting

L&T General Insurance Company Limited - Underwriting: The insurer’s highly parameterized IDIT Policy Administration system helps the underwriting team capture risk-based metrics for pricing. Integration with IBM’s Cognos Business Intelligence software provides MIS capability to help the underwriting and actuarial teams understand the geographic spread and hazard categorization of portfolios. The centralized platform results in consistent underwriting because every risk has a built-in base rate that is adjusted based on risk factors, ZIP codes, and market comparisons or conditions. Workflow within the system aids multiple underwriting acceptance levels as needed to align underwriter competencies with risk levels. Since implementation, the productivity of the 30-person underwriting team has improved by more than 225 percent.

MetLife India Insurance Company Ltd - Life Insurance Distribution/Illustrations/New Business

MetLife India Insurance Company Ltd - Life Insurance Distribution/Illustrations/New Business: After acquiring India’s second largest bank, Punjab National in 2011, MetLife needed a new bancassurance model to fully integrate its insurance offerings into the banking system. In just six months, the partnership team and IT collaborated to build an in-house solution—Met Smart—a web-based, real time, fully integrated interface for policy administration, customer relationship management, and other core systems. The Met Smart operating model combined with the integrated IT infrastructure supported MetLife India’s business expansion and helped it overcome challenges of exponentially increasing distribution channels by 5,600 branches and 60,000 bank employees enabled to service customers. It resulted in substantial benefits in the form of increased efficiencies and lower processing costs.

Mutual Benefit Group - Product Design/Definition

Mutual Benefit Group - Product Design/Definition: Seven years ago, Mutual Benefit Group (MBG), a regional property/casualty company headquartered in Huntingdon, Penn., deployed a proprietary agent rating portal in an effort to halt declining personal lines market share. Today, that award-winning model insurer portal is the foundation of nearly every major business process in the company. In addition to winning back the attention of agents favoring proprietary portals, MBG has reused the technology to compete with large national carriers and serve agents and policyholders efficiently. The midsize carrier has built solutions for both personal and commercial lines rating and policy administration that rival those of top national companies and is planning to use the same technology to modernize its claims and billing systems.

ORANTA Insurance Company - Policy Administration

ORANTA Insurance Company - Policy Administration: As part of its strategy to modernize the ORANTA technology, the insurer first centralized all policy administration, claims, and accounting processes in a shared services center in Ryazan, Russia. ORANTA then deployed Sapien’s IDIT, a fully automated policy administration and claims system. The new system—featuring centralized back office processes, which allows front offices to focus on customers—decreased time to market for new products. A recently introduced new motor product with significant changes was introduced in 1.5 months. Other benefits include a decrease in the number of branch and agency calls related to different systems into the help desk and an increase in process automation for policy administration, claims, and accounting. ORANTA estimates that operational costs decreased by 28 percent, staffing decreased by 21 percent, and claims costs reduced by 2 to 5 percent as a result of improved claims fraud detection.

Model Insurer of the Year: XL Group plc - Claims

Model Insurer of the Year: XL Group plc - Claims: Please see our news coverage of Celent's Innovation and Insight Day and extensive coverage of XL's award-winning project. To see coverage, click here.

Today, at Celent’s 2013 Innovation & Insight Day in Boston, the research and analyst firm handed out awards to insurers with best practices in the use of technology. To read more about the 7th annual Model Insurer program, click here.