Green Screens Fade Out in Workers' Comp
Insurance Networking News, March 1, 2009
When it comes to the novel use of technology among different lines of business, workers' compensation is not widely regarded as a hotbed of innovation, especially when compared to areas such as personal lines auto. Similarly, the typical billing system an insurer runs may tend to lack some of the technological sheen of the most modern claims and policy administration systems.
This state of affairs seems odd when one considers the importance of billing in customer service and the increased emphasis carriers are giving it. While an argument can be made for maintaining separate policy administration systems, the case for a legacy, decentralized billing system is much harder to make.
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Yet, quick reconnaissance of the billing systems currently in use at workers' compensation carriers would no doubt detect a telltale monochromatic glow. "If you look at the state of the industry in workers' comp, a lot of them are using legacy platforms," says Anil Chitale, SVP and client executive at the P&C division of Edison, N.J.-based MajescoMastek. "There's a lot of green screens still around."
One place where the green lights are fading is Farmington Hills. Mich., where Amerisure Mutual Insurance Co. is currently phasing out a green screen, direct billing system in favor of MajescoMastek's STG billing system. Tim Quinn VP, treasury and finance for Amerisure, says, ultimately, the company expects the system to engender savings and deliver a better product to customers.
Quinn recalls the company put in agency billing systems about five years ago with the intent of eventually moving to the vendor's direct billing system. However, he says, Amerisure came to realize the system wasn't as customer- or user-friendly as they wanted. Ultimately, the company opted for the STG system for several reasons, including a desire to expand its online capability and mollify their agents.
"Our agents wanted more access to our systems, in particular, our billing system," he says, noting the new system will enable agents to access internal documents electronically instead of calling on the phone. "Agents want up to pull up the invoice and navigate through it. They want to click on an endorsement and go to the actual document."
Quinn believes the new system, slated to be fully implemented by the late third quarter or early forth quarter of this year, will also help clarify uncertainties agents had about to which installment or endorsement a given invoice pertains. Previously, neither of those things would fit on an invoice due to space constraints, he says.
HANGING AROUND
There are many reasons legacy billing systems persist. Many of these systems were shackled to a particular book of business, or inherited upon a merger or acquisition. Another reason is the nature of the workers' compensation business itself. If P&C is a collection of exceptions, it is even more so the case with workers' compensation. As a specialized line of business, systems servicing workers' compensation need to fulfill some incredibly nuanced requirements.
Indeed, the legacy systems, for all their faults, are highly customized and perform well despite an abundance of manual work-arounds. Chitale notes many of the legacy billing systems originally came tied to long-retired policy administrations systems. In many cases, carriers would upgrade the policy administration system only to retain the legacy billing system for want of a better option.
There are drawbacks to extending the life of a new legacy billing system. Agency employees may be disinclined to learn its nuances. "It's hard to teach somebody those legacy systems," Quinn says, "That's one reason we realized we needed a new billing system."
However, carriers (especially small and mid-sized ones) opting to investigate a modern billing system may find their options somewhat restricted. Quinn says many of the systems Amerisure investigated seemed tailored to larger organizations. This relative dearth of best-of-breed choices seems all the more pronounced if compared to the plethora of choices available in claims and policy administration.
According to Chitale, a preponderance of systems marketed to the workers' compensation market were originally built around standard personal and commercial lines products, and subsequently modified. Accordingly, many lack some unique functionality carriers servicing the market require. "There weren't a lot of alternatives in this area, so carriers have stayed with what they have." Chitale says. "Very few vendors write a system with workers' comp in mind."
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