Employers Direct Targets Enterprise Efficiency
Insurance Networking News, July 2006
Headquartered in Thousand Oaks, Calif., Employers Direct was founded in January 2003 to meet the workers' compensation needs of California employers, including those of hotels, restaurants, country clubs, new car dealers, manufacturing companies, specialty supermarket chains and retailers. Employers Direct operates via a direct-to-consumer model.
Advertisement
While that high-touch relationship is important to Employers Direct, so is increasing efficiency, notes Schueman. When the company opened its doors, its founders were looking to put in a basic set of systems that would enable them to get started and test the waters. In 2002 they picked up one of the last licenses for a COBOL AS/400 suite from now-defunct Data Coordinators in preparation for writing business in 2003.
"The base vanilla system did not have the rich functionality that we desired," says Schueman, "but it worked for our intended purposes in workers' comp."
As a full claims, policy, billing and commissions system, "it did everything for us," says Schueman. "But by that point we knew the organization was going to be very successful." The company's long-term strategy was to invest in better systems, and after evaluating a number of options, Employers Direct decided on ClaimCenter.
ClaimCenter uses business rules to optimize the claim process and automatically monitor all operations in order to catch exceptions and eliminate errors. Available as both a standalone claims system and as a set of individual components to complement existing systems, its architecture is supported by Web client, XML-based configuration or Web services.
Employers Direct began implementing ClaimCenter in October, 2004 and completed the project in July, 2005. Customization extended the possible six-month implementation time, notes Schueman. "Our business was slightly different than what (Guidewire) had done before that," he says.
Schueman admits learning at least one lesson from the implementation of ClaimCenter: the importance of testing customizations before going live. "There were a few bugs that got through," he says. "They weren't significant, but they were annoying."
In less than one year, Employers Direct can attribute hard numbers to its efficiency strategy. "We went from processing about 600 to 800 claims the prior year, to about 5,000," says Schueman. "Yes, our staff number increased, but it wasn't the same rate that you would expect had we been on the old system."
AIMING TOWARD THE FUTURE
Employers Direct's success with ClaimCenter implementation triggered the next step toward the goal of automating across the enterprise. The company is in the process of upgrading its current version of ClaimCenter and adding Guidewire's PolicyCenter and BillingCenter to its insurance suite, which will run on a Linux Red Hat enterprise platform.
PolicyCenter manages underwriting and policy administration processes, including new policy applications, quoting, renewals, changes, cancellations and reinstatements. BillingCenter manages the end-to-end billing process, including complex and customized billing arrangements.
Built on a double-entry accounting foundation, BillingCenter receives billing instructions from PolicyCenter and determines the amounts due on a policy or account, manages payments made by policyholders, links these payments to the amounts due and manages the commissions payable to agents from these receipts.
Schueman's "go-live" goal for the enterprise implementation is late 2007, but he is more focused on doing it right. "It's a big project, and we take it very seriously because there's a whole sequence of steps to execute. We're not going to set an arbitrary date and rush to that, but rather, make sure we're ready, and do it right in partnership with Guidewire. That way, we'll gain the kind of performance and process efficiencies we're looking for," he says, which are somewhere between 20% and 25%.
Schueman is confident with those numbers because he will apply the now-proven "test more" lesson previously learned. "This time, when we're doing our upgrade, we'll have a dedicated test team," he says. "We have an offshore test team, and we also have our user acceptance test team of Employers Direct employees."
For more information on related topics, visit the following channels:
