Channel Management: New Ways to Reach Consumers

To expand distribution in a static market, insurers are looking at everything from system revamps to new technologies to new partnerships.

Insurance Networking News, July 1, 2012

Chris McMahon

Grange Insurance had a problem. The Ohio-based, multi-line, multi-state insurance company relied on a legacy document management application to produce all of its printed communications and insurance documents for independent agents and policyholders, and that product was going "out of support," vendor speak for being killed off.

"That problem became an opportunity when we saw that this was a chance for us to totally revamp our output production process and improve the look and feel of our insurance documents, add production efficiencies and have a leaner, more efficient organization that is producing better outcomes for the business," says Andrew Hellard, application development supervisor for Grange.

The company wanted to shut off the last few printed documents the company sent those agents, and move all communications to the agent portal, while laying the ground work for supporting multiple communications channels, including PDFs, the Web, handheld and other future devices. But the insurer also saw it as a chance to revamp its channel strategy.

Grange is not alone. As the insurance industry profits slumped in 2011 and are not projected to improve much in 2012, all players are looking for ways to sell more products. Insurers are realizing that revamping outdated channel strategies is essential to that effort. The challenge of managing multiple distribution channels, however, is that to communicate efficiently with policyholders, agents and partners, insurers must be able to pull customer data from their legacy back-end systems and present it to new users in new ways. Some insurers, including Grange, Ameriprise, Preferred Concepts and others, are taking the plunge through documents, apps, websites, handheld and other devices, which provides an opportunity to reach more potential customers.

"There is desperation to find people who are not existing customers," says Kimberly Harris-Ferrante, VP and distinguished analyst at Gartner Inc. "But people don't know where to go. It costs a lot to create a (new) channel and figure out the impact on existing channels and branding," she says, so managing existing distribution and communications channels effectively and finding cross-selling and up-selling opportunities is more important than ever.

But these efforts are rarely easy. Grange, for instance, was faced with updating the look and feel of documents that have existed for more than 10 years, Hellard says. The goal was that if a personal lines policy, a commercial lines policy and a life policy were laid side-by-side and the logos were covered, everyone would still recognize each as a Grange document. The next incremental goal is to make those same documents available to any device, anywhere at anytime.

Overcoming Legacy

With the replacement system, HP Exstream, Grange has been able to unify the production of both print and electronic communications through a single tool, communicate through Web-based portals with independent agents, and now policyholders, while simplifying or eliminating many production processes.

Grange is now able to publish data from its legacy mainframe-based policy administration and billing systems to both agent and customer portals, in addition to offering a comparative rater and upload to an agency management system.

But back-end legacy applications generally were built to accommodate individual departmental functions. As a result, they support linear processes and were not built to readily share information among users. And, frequently having been built before such things existed, they also were not designed to support now common communications channels, such as e-mail, text messaging and devices such as smartphones and iPad.

Grange has figured out a way around those many limitations. Selected customer data from the legacy policy management and billing applications is FTP'd down to Windows servers and fed through a transformation layer that converts mainframe flat files into formatted XML, which enables Grange to "write once and deliver to many devices and mediums," Hellard says. The formatted XML is then fed into HP Exstream to create Web-based information, PDFs and new documents.

"There's a lot of pain with the flat-file mapping to the XML, but that's the only piece you'd have to redo if you bought a new source system. Insurance data is insurance data. You have vehicles, drivers and dwellings. And on the billing side, you have amount due, and so forth," Hellard says.

HP Exstream supports point-to-point integration with legacy systems, but by decoupling the data from the mainframe, the company has the ability to potentially replace the policy management or billing application without changing anything else related to the portal, Hellard says.

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