Insurer 'Embraces' Paperless Office

Document management initiative enables Embrace Pet Insurance to shed empty file cabinets, increase customer satisfaction.

Insurance Networking News, December 1, 2011

Doug Bartholomew

If you had to pick an industry to go paperless, insurance might seem an unlikely choice. Core processes for insurers typically are paper-intensive. What's more, as a whole, the industry has been somewhat slow to adopt new processes and technologies.

Yet, going paperless was a primary goal of Embrace Pet Insurance. Headquartered in Beachwood, Ohio, a suburb southeast of Cleveland, Embrace was launched by co-founders Laura Bennett and Alex Krooglik, a pair of freshly minted Wharton MBAs, as an all-digital enterprise right out of the gate.

"We've always been paperless," Bennett says proudly. "When I worked in life and health, there was always so much paper. We just couldn't have people tied to a physical location and having to lug files to and from work. So we thought, why shouldn't we go paperless-after all, everybody is moving toward that goal."

At the heart of Embrace's paper-free mission is a set of core paperless processes, including paperless policy and paperless claims management. For example, 95 percent of claims forms are submitted via fax, with incoming faxes digitally recorded in the company's Microsoft Dynamics customer relationship management (CRM) system, which, in effect, serves as Embrace's document management system. The remainder are mailed in and scanned into the CRM by an employee, kept for a few months, and then shredded.

A typical Embrace policy has a $300 yearly deductible, an 80-percent reimbursement rate, and an annual maximum payout of $10,000 for dogs. About 85 percent of the company's policies cover canines. Premiums typically range from about $32 per month for a mixed-breed dog, and run higher for purebred pets. By contrast, the average cat owner pays about $21 per month. The five-year-old firm has more than 12,000 customers who choose to insure 17,000 pets. To keep matters simple, Embrace covers only dogs and cats-in other words, owners of hamsters, parrots, frogs, salamanders or anacondas are excluded. But that doesn't mean the market is in any way limited-less than 1 percent of dogs and cats are insured in America, compared to 25 percent in the United Kingdom.

Customers can apply for the pet policy online at Embrace's website, or by telephone. Premium quotes are calculated by Embrace's rules-based quotes system that takes into account where the customer lives and certain characteristics of the pet or pets to be covered.

Once a policy is issued, the customer then can print the policy at home. This relieves the company of the paper burden of mailing a copy of the policy and its coverages and exclusions.

Along with the policy, customers receive barcoded claims forms they can use when seeking reimbursement for an animal's medical care costs. The barcode contains each customer's (not the pet's) identification. Among the key pieces of technology supporting Embrace's paperless effort are Inlite Research Inc.'s ClearImage barcode recognition system, enabling automated document image processing, and NitroPDF Inc.'s software for processing PDF-based claims.

The Embrace coverage is basically an indemnity against the cost of various pet illnesses or injuries. To file a claim for the reimbursement of a pet's medical bills, the insurer typically asks the veterinarian to fill out the claim showing the procedures performed and the costs, and then fax the form to Embrace.

Vetting the claims for irregularities is Embrace's staff of animal care-seasoned, veterinary technicians who have pet medical claims experience. "They know all the conditions and can spot the inconsistencies," Bennett explains. All worked in a veterinary clinic, but the physical hardships and risks eventually outweighed the benefits, she says. Not only are the working conditions appreciably better, but the vet techs often work from home.

Tossing the Filing Cabinets

Unfortunately, many business partners and customers remain paper-dependent. "In the pet insurance world, there are no PPOs, no HMOs, no standard rates that vets charge," Bennett says. "There are no e-medical records. And most vets are not paperless." One way to deal with this, she says, is to encourage the vets to submit claims via fax.

To smooth claims payments, Embrace added the Microsoft Great Plains accounting system, part of the broader Great Plains enterprise resource planning (ERP) package. "It allows us to control paying claims better," Bennett adds. Credit card-based payments by customers are handled through a merchant account manager. "We plan to add our own billing system, because we have a large number of small payments," Bennett says.

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