You are currently browsing the category archive for the 'Insurance' category.
You’ve performed project triage.
You’ve run the required diagnostic tests.
It takes more than a diagnosis to avoid more implementation failures. Now what?
Here are some quick remedies and prescriptions for fixing ailing projects:
- Treatments
This takes us back to the beginning of the cycle. Periodic triage and interim project health-checks are the best way to make sure your project portfolio will contain fewer implementation failures.
An Agency Website with a polished, rich design and robust functionality OR an Agency Website with a basic design and moderate functionality – which would your Agents choose?
I can state with certainty they would choose the robust, functional, polished agency website! How do I know this? Experience. Client’s I work with that have invested the time and dollars to re-architect, re-brand and add advanced functionality (aka, “Website Trilogy”) to their out-dated agency websites are reaping the benefits:
Satisfied agents that Sell their products.
So, if your asking what I mean by the Website Trilogy and what is involved, I have two comments:
- First, continue to read;
- Second, maybe it’s time to realign your agency website to support the growth in your business, get on track with the latest technology, and remain competitive.
Website Trilogy is a term that I use with my client’s to design, develop, and revitalize their out-dated, agency website. This process has three (3) components associated with it:
- Architecture
- Branding
- Functionality
Each component of this trilogy is explained below.
Architecture
When Insurance carriers began developing agency websites, the technology available had limitations. Technology and technology platforms have advanced considerably from those days. Insurance carriers may not be utilizing today’s latest and greatest technology platforms as the foundation for their agency websites. One reason may be the age old thinking – “if its not broken then don’t fix it”. I disagree and pose this – “if its out-dated and doesn’t support your business, re-build”!
Technology platforms utilized today to develop and maintain websites offer many benefits over their older counterparts. These more sophisticated platforms are the foundation for re-architecting your current agency website. Advantages associated with these platforms include:
|
|
|
|
|
|
Technology platforms are abundant in today’s market. Prior to selecting a platform, complete your in-house due diligence by determining:
- What the agency website needs to do,
- How it will be accomplished,
- What functionality is required,
- Who will own the site content.
Having the answers to these important questions will guide the technology platform evaluation and selection.
Branding
As the platform is integrated into your environment, re-branding of the site should be undertaken. Older sites tend to have a monochromatic (a single color schema) or a “mainframe green screens” look and feel.
Bring your agency website into the 21st century by re-branding. This means:
- New graphic design: color, logo’s, images, etc,
- New content design: pages designed for readability, functionality, and content relation,
- more efficient navigation throughout the site,
- menu options that are understandable and meaningful,
- help sections
Don’t be afraid to audit your competitors’ websites and see how they’ve updated their design.
Don’t make the mistake of overlooking this critical step – The presentation of your new site is just as important as the functionality you will build into it.
Functionality
Working with your internal staff and some key agents, you must strategically plan what functionality should be included on the new site. Review your current functionality, but consider new services that will make your agents’ lives easier. Figure 1 below represents some of the key functions to consider.
Figure 1
It has been my experience that sites that have not been upgraded in the last 3-5 years lack some of the key functionality noted in Figure 1. Today’s agents are technology savvy. They want websites that give them the information and the tools that will make them successful in performing their jobs. Give your agents the ability to login to your agency website and:
|
|
These are just a few key functions that that I have helped our clients develop for their new upgraded agency websites.
Built into the agency website is a tight security model, to protect all agent data from those who should not see or have access to it.
Conclusion
If you’re serious about advancing your agency website, then consider the Agency Website Trilogy. You want to cover all three phases in-depth. Omitting just one could jeopardize the success of your revitalization project.
I’ve had clients say that they believe the cost and time commitment for undertaking such a project is more than they can afford during this economic downturn. After spending a few weeks with a client to strategically plan a project such as this, the cost and time commitments are far less than what they anticipated. In addition, completing a project like this in iterations can help to alleviate the impact of a financial “big bang” or a long-term deployment.
So what is stopping you from revitalizing your agency website? Could I be right that you are still thinking, “Jeff – it’s not broken”?
A quick google search shows that the medical concept of triage is commonly applied to evaluating IT projects and other major business initiatives. 
The concept of triage comes from medicine, and in particular medical treatment under difficult circumstances—war, epidemic, disaster—where the number of people needing treatment exceeds the resources available. In such situations, the sick or injured are typically assigned to one of three groups.
In the business context, it usually means allocating scarce cash and human capital under difficult economic conditions, when the number of ongoing projects exceeds the level available resources.
Project Triage Framework
In the current economic climate, it probably makes sense to perform a mini-triage of your project portfolio quarterly, with an annual triage as the last fiscal quarter approaches. In addition, you may be faced with the need to triage in emergency situations such as a sudden shift in business strategy, in the face of a new acquisition, or when presented with an across the board budget cut. Periodic review is a cornerstone of an effective project portfolio management strategy. This regular triage can be a valuable form of project insurance. Preventative medicine is always less costly than crisis treatment.
Your triage team should include your senior IT management as well as functional business leadership. Performing project triage is easiest if there is regular, reliable status reporting from the project teams, on their milestone and budget status.
Triage is also easier if your project initiation process includes a business case that assigns a business criticality score to the project. It’s entirely possible that business criticality of a given project might change over the course of the project’s lifecycle, and a master project status tracking document helps the triage team keep track of this.
After reviewing the health of individual projects and their alignment with current business needs, triage will place them into three groups which align perfectly with the medical definition of triage:
1. Persons who are likely to live even if they don’t receive immediate treatment—projects going well that need no additional intervention
2. Persons who are likely to die even if they do receive immediate treatment– projects that you should suspend NOW before they chew up additional resources
3. Persons who are like to live only if they receive immediate treatment– projects that need you to perform an immediate intervention
Our next blog post will cover specific diagnostic tests you must perform on projects that fall into the third group. In the meantime, let us know your apporach to project triage by answering this poll:
You’ve worked hard developing your Company Public site and Agency site. You’ve added all the right features and functionality while utilizing the latest technology. You’ve been successful — the public is driven to your site to “check you out” and your agents/agencies are trained and using their site. All the benefits you had hoped for are being measured and realized. Now you’re in maintenance mode for both sites. Additional features and functionality are being added to keep the sites aligned with your business. You’re moving along the maintenance cycle without any obstacles.
Then it happens! You get a call from the Executive Vice President of Product Development who happens to have a Universal Life policy with the company. She asks “Do I use the public site or the agency site to check the cash value on my UL policy?” You’re stumped, so answer “NEITHER”. She is stumped as well and states “I have an annuity product with AnnuityGeneric Insurance Company and I just went out to their Policyholder site and reviewed my cash value and changed my mailing address – all within a matter of minutes. Where is our Policyholder site?”
This situation is not unique. I find that a majority of my clients have awesome Public and Agency sites, yet few have Policyholder sites. Of course I always ask “WHY?” Why not have a Policyholder site? Are your Policyholders not as important to you as the general public?
As we know, Consumers today (all of us) are technology savvy. We use our computers and laptops to shop, communicate, BLOG, read newspapers, etc. Basically, we use our computers to do almost everything except maybe check our insurance policies. It’s not that we choose not to, it’s that we don’t have the opportunity because your company does not have the site in place. What a lost opportunity this is for both your customers and, most importantly, your company.
Over the last 3-5 years larger insurance carriers have started to develop very sophisticated Policyholder sites. Yet I still see many middle tier carriers who have not made the investment. Again let me ask –
“Are your Policyholders not as important to you as the public or your agents?”
If you’ve answered, “YES they are just as important” – then where is their site?
Prior to starting analysis and design, I sit with my clients and we decide on the functions/services that can be provided via the web that are most important to policyholders. Figure 1 below depicts some of the common yet most important functions.
Figure 1
Some of these functions help to alleviate the number of calls coming into your call centers. This frees up your Customer Service Reps (“CSR”) to concentrate on the more complex and challenging transactions and calls. Other benefits as noted:
|
|
|
|
|
|
As the analysis and design of the site starts, the game plan begins with identifying the most important features and functions for site. From there, development and deployment is completed in iterations. This gets the initial site up and running with the most critical features and functionality, while maintaining the ability to add and deploy additional features later. Figure 2 below depicts this strategic approach (“play”).
Figure 2
What is preventing you from developing that much needed Policyholder site? Realize one thing – not having one places you behind your competitors. Jump on board now. Wait too long and you eventually miss the “Policyholder” game.
Some great feedback on my previous post – “Straight Through Processing & Underwriting - The Starting Point”.
Many thanks to those who responded with your comments and feedback.
In that post I stated: “STP helps to drive efficiency and consistency” throughout the life cycle of all policies and that insurers need to start with their underwriting process. Many of you posed the question “What about the new business process as well as workflow processing — why are these not part of the starting point well?” A+ – Congratulations – THEY ARE!!
Fact: Underwriting is a set of guidelines that determines the eligibility of a client to receive an insurer’s product. New business rules determine if the client meets the product’s prerequisites as defined by the insurer. One differs from the other, yet both compliment each other in the final decision process.
Fact: New business coming in the door for an insurance carrier starts the business process for new policies. It only makes sense then that this starting point for building a solid STP business models resides in both underwriting and new business processing. They support and complement each other hence the need for both to be worked concurrently. Supporting these two functions is a much needed workflow management process/system. All three business functions forms the foundation you need to continue to build your STP process.
Working extensively with our clients to forge a path to a full fledged STP business model, we begin building this foundation by reviewing and dissecting both their underwriting and new business processes. We also begin the much needed workflow analysis and build process.
Underwriting Guideline Review
The focus here is to concentrate on the underwriting guidelines that support each product within a given product portfolio. We review manual and automation processes. We determine what guidelines are consistent within the portfolio and what guidelines are unique to a specific product within the portfolio. Once we have a clear understanding and have the details we DOCUMENT! Documenting this process is no easy task and is often what prevents insurers from this review process.
New Business Rules Review
As with the underwriting guidelines, the focus here is on the new business rule sets that support each product within the portfolio. This tends to be more grueling since each product in the portfolio is unique. We look first for common business rules across all products in the portfolio, then determine what rules are unique by product. Again once we have a clear understanding and the details we DOCUMENT!
Workflow Review
Often overlooked in the early stage by insurers is the need for a detailed review and possible re-alignment of workflow procedures. Workflow is what moves your policies through the new business and underwriting process and is critical to the success of your STP initiative. This step must occur concurrently with the underwriting and new business reviews.
Figure 1 below depicts the business process model that can be followed to develop that solid core foundation needed for your STP.
FIGURE 1
With that stated I hope this helps to address the questions and comments from my previous post. Now I must end with asking this question – if you have your core foundation what is your next step in the STP process? From my perspective the next step that I take with my clients is ……. to be continued….
Remember the last time you needed a real person to give you directions? Some people provided milestones and markers, making it easy to find your way. Others were a lot more vague and in the end, not very helpful. How often did you end up completely on the other side of town, nowhere near where you wanted to be, and you had to go back and retrace your steps trying to figure out where you went wrong? This only resulted in increasing your stress level and causing you to be late. Such was was life before the wonderful technological advancement of auto GPS systems.
You’ve spent a lot of time selecting a vacation spot on the beach you’ve never been to before. Your flight has arrived and you’ve picked up your rental car. Now what? How do you get to your final destination? Do you just drive until you hit the coast and start searching? No – you were also smart enough to plan and have a GPS to help you find your way. Your final destination has been input and the course plotted.
With proper preparation, your IT department can be like the GPS in your car — planning the best route to your destination, avoiding slowdowns and getting you to the beach by lunch. However, if IT doesn’t have all the information to plot your company’s course, or is not given the information in a timely manner, you can end up bogged down in traffic or taking the scenic route instead of the interstate, ruining your trip with frustration and disappointment.
Carrier IT departments need to have a firm understanding of where the business wants to go so they can design their target architecture in order to plan the best route to get there. As you know from adjusting your car navigation system, the best route to your destination isn’t always the most direct, or the fastest. Traffic jams of requirements documentation, technology learning ‘S’ curves, and poorly timed stop lights can make the most direct routes take the longest.
Management should not decide to venture into a new line of business, issue a policy, and drop the policy off with IT to enter into a non-existent system. The result can only be chaos in a poorly planned and hurried repository saturated with wasted money and time. Without proper notification and planning, a carrier’s IT department becomes reactive instead of proactive, definitely limiting their capability to support the business and help the organization grow. This dramatically increases the difficulty to introduce new lines of business and does not improve your company’s ease of doing business for your agents and customers, pushing them further away. Even the most strategic, brilliant, masterful business plan fails if you don’t have the technical infrastructure to support it.
By keeping IT part of the business planning process, they can help plot the best course and work with you to build a platform for the future that can support your growing organization.
Over the past several years, insurance carriers have engaged more and more in Straight Through Processing (STP) initiatives. I see many different areas where STP can play a significant role for carriers:
- Underwriting
- New Business
- Billing and Collections
- Policyholder Services
Early adopters honed in on the imaging of paper documents as the starting point for STP automation. The focus should be less about imaging of documents and more about capturing data in electronic format, then using the data in the life cycle of a policy from underwriting through the claims process.
As I work more and more with our clients on these initiatives I often hear the following:
“Our STP initiative is focused on the automation of our new business process, utilizing electronic policy data from our agents/agencies to feed directly into our Policy Administration System”.
I am not in complete disagree with this statement, in fact I am in favor of it. But, I do not believe that this is the best starting point. The underwriting business process and the underwriters are where STP needs to start in order to drive efficiency and consistency throughout organization.
Why do I believe this?
For one key reason – the ultimate objective of STP is the ease of doing business with agents and policyholders. This starts with new business, which is rooted in the underwriting process. New business cannot exist without underwriting, so why start with new business? You must start with the foundation of new business – Underwriting.
The goal for carriers then, is the optimization of the underwriting process, because it sets the foundation for the issuing or declining of policies. Key objectives of insurance carriers is to consistently work with their agents and brokers to give them the products they need, AND streamline the issuing process to be more efficient and cost effective.
Too often in my analysis of current underwriting practices at P&C and LH&A carriers I see underwriters handling every policy that an agent or agency submits. I often ask “Are you adding any value when you touch it?” If the answer is “NO”, then I say automate! If you start with a goal of automating 25% of the underwriting process and an average underwriter handles 50 policies a day, that equates to 12 policies taken off the hands of the underwriter. These policies go through the process with little or no human intervention – the ultimate goal of STP.
Now, you maybe asking “What do I automate and when?”
Great question and one that has been asked many times over. You begin with four developmental points:
- Develop or purchase a “Business Rules Engine” to add and support your underwriting rules. Start small, with a select group of easy to automate products, such as Term Life or Auto insurance;
- Incorporate the ease of electronic submission;
- Establish or improve your agent or agency interfaces for faster and more efficient uploads and downloads of electronic data and;
- Create a real-time policy decision process, and put it in the hands of the agents (accept, pend or decline).
Figure 1 below depicts the process of using an Underwriting Rules Engine as the driver for the new business STP process.
Figure 1
The underwriting engine houses all the underwriting rules for those products you have selected. The engine then impacts 4 critical areas in your STP process:
-
Supports on-site policy issue by allowing underwriting rules to be downloaded to an agent or business rep’s laptop;
-
Utilized by your administration system for further evaluation of a policy;
-
Supports one central location where underwriting rules are stored, and;
-
Allows the business owners and not IT to update the rules engine in a fast and efficient way, leading to a quicker turnaround on new or updated products.
In helping clients move forward with their STP initiatives I will consistently start with a detailed analysis of their underwriting process and build the foundation from the underwriting perspective.
Where are YOU in your STP process and is underwriting part of it?
The Dow was down about 200 points earlier this week – is that bad or good? The Dow has been picking up fairly consistently over the past 6 weeks or so and this is probably just an “adjustment” rather than another freefall. Is the glass half empty or is it half full? Many people see the down economy as a time to hunker down, sell off their assets and bury the money in Mason jars or hide it inside their mainframe. But for those with the stomach for it, this down economy brings a lot of opportunities; a lot of bargains.
Any insurance organization looking to improve IT services can find a lot of good deals on hardware, services, and especially back office systems. However, most insurance organizations, because they are intrinsically risk averse, don’t want to spend the money now, but instead wait and see what happens. When things do turn around, they could find themselves behind the curve, rather than leading the way. A lot of companies are looking for band-aids for their IT problems, quick fixes to get them through the storm. 
Rather than just repairing the mast and patching the hull on your ship, wouldn’t it be better to have a new, stronger, and more stable ship ready for sea when the storm subsides. Or, even better, fully prepared to weather the storm if it continues, and head out for the deadliest catch.
Another benefit to purchasing during a down economy is that as a mid-market carrier, you are likely to get a lot more attention from technology vendors and a better team now because you become a big fish in a little pond, and every customer is extremely important. Because you’re in more of a command position, you can negotiate better services and even more free upgrades because it also becomes an opportunity for the vendor to improve their product.
We’re all confident that the economy will turn around, it’s just a question of when. There are those “economic experts” that say September; those that say next Spring; and more that say Summer 2010. If any of them are right, its really not that long a period of time – about the same amount of time it takes to implement a system.
When it does, your agents, your customers, and most importantly, your prospects, will be there to move forward with you. So talk to technology vendors now, because just like the car companies, prices have come down and there are deals to be had.
Part 3
The focus of this three part series is to provide insight into managing a smooth and seamless transition for outsourcing claims business processes. Part 1 concentrates on the upfront gathering of current and future requirements, the Request For Information (“RFI”) and Request For Proposal (“RFP”) process, the selection of the “right” vendor,
and a brief on contract negotiation. Part 2 focuses on the development, testing, and conversion that takes place between both organizations, and some of the pitfalls to avoid. Part 3 will focus on maintaining a productive, long term partnership with your vendor.
One of the biggest pitfalls seen in an outsourcing arrangement is the absence of a true partnership between the client and the vendor. In the absence of a partnership, the replacement is a customer-vendor relationship. In this type of relationship the customer is looking for one deal while the vendor is looking for another. This arrangement creates a lack of trust between both parties involved, that will eventually make the relationship sour because it becomes disconnected from the true business needs and requirements.
Secondary to the partnership but equally as important is the communication between parties. Communication ensures business interests are aligned and understood. Lack of communication throughout the life of the relationship creates tensions that will definitely hinder future value creation. Effective and continuous communication ensures both companies are responsive, deal with the facts and not assumptions, keep all stakeholders in the loop, and make decisions in the spirit of a partnership. Successful outsourcing arrangements, those that last for years, put in place a joint planning process between the client and vendor. Regularly scheduled joint planning meetings every six (6) to nine (9) months assure that both the client and vendor monitor the health of their relationship. By continuously reviewing the strengths, weaknesses and opportunities of the relationship, agreeing upon recommendations and placing those recommendations into action continually improves the relationship.
Most often seen in healthy outsourcing relationships is an effective governance methodology or framework. Both parties must agree early on to operate in a collaborative environment, as noted above. In the absence of a governance structure, the resulting implications could be devastating. This could lead to unclear roles and responsibilities between the client and vendor, challenges encountered that are not overcome and linger, problems not resolved in a timely fashion, and unmet expectations .
Conclusion
The worth of an outsourcing agreement is generated when both companies strike a mutual agreement that forms the foundation for a long term partnership. When both parties buy into these steps as well as avoid the pitfalls noted, the framework and foundation has been set for a long term successful partnership. By doing so, both parties have put in place the tools, design, contracts, and methodologies that will ensure success. Failure comes when anyone of the steps are short-changed, missed or are misunderstood by either or both parties involved. When your company makes that strategic decision to outsource, make sure you make the same decision to be successful by employing these best practices.
Part 2
In Part 1, we focused on creating the core structural foundation of a Claims Outsourcing Strategy:
- gathering the business and technical requirements
- creating a detailed Request For Proposal (“RFP”)
- selecting the correct claims outsourcing vendor
- contract negotiations
In Part 2, we will concentrate on the development, testing and conversion that take place between both companies, identifying some of the pitfalls that can be avoided during this stage. In Part 3, we will wrap up with a focus on maintaining a strong, healthy partnership.
Development Phase
Prior to the development phase you should ask yourself as well as your staff the following question:
“What is the best strategic approach that both companies should utilize to obtain optimal success during the development phase?”
Without a key strategy agreed upon by you and your vendor, many unforeseen obstacles will soon be on your door step, obstacles that you’ll need to juggle and resolve.
One pitfall many organizations fail to identify prior to the start of the development phase is the common “siloed development approach”. Your company works against a set of functional and process requirements specific to your own system to support the outsourcing project. Your vendor works against another set of functional and process requirements specific to their system. There is no known intersection of the functional or process requirements between the two companies. By no means is this ever considered the correct strategic approach to take.
By strategically working together prior to the development phase, both organizations will find the intersection or “Joint Functional and Process Requirements”, so all three pieces of the puzzle can come together and be managed accordingly. If you skip these requirements, the puzzle is not complete and managing this process will become a nightmare.
Testing Phase
As with the development phase, a joint strategic approach for testing should be developed and agreed upon prior to testing beginning. Many organizations fall into one of the biggest known pitfalls – unclear definition of the different phases of testing. Ask your IT and Business staff as well as your vendor this question:
“What is considered unit testing, system testing, User Acceptance Testing (“UAT”) and Integration testing?”
I promise you this, you will not receive a unified answer from your staff or vendor as to what each phase represents. Clearly identify in a Testing Strategy Plan what each phase’s primary purpose is, who is responsible for executing the phase within and between both companies, and what is the measurement of success for each phase.
Without a doubt you can utilize the integration concept from the development phase in the testing phase. Developing test plans to support this process should include resources from both organizations. Agreement on what is to be tested and who should test will lead to the optimal testing results. This joint planning should take place early on so that both companies know what is expected of them during this joint testing effort, and have their resources allocated when it come time to start.
Conversion Planning/Execution
Conversion is one area we consistently see that both companies have not spent the quality of time or effort needed to succeed in their conversion efforts. Conversion of data and files to and from both companies is equally as important as the development and testing efforts. Yet most companies will spend less time understanding the data and files needed in order to make the transition and outsourcing arrangement successful.
Time and effort must be allocated to analyze and enhance the data to support the outsourcing initiative. This includes putting a team in place to focus on:
- Identifying and measuring the data in your systems(s) today — determine the quality of the data or the lack thereof.
- Identifying a set of data quality rules and targets that must be met prior to the conversion of the data.
- Designing and implementing data quality improvements processes where needed, that make the data ready for the conversion.
If the correct analysis and time is not spent upfront to understand the data, files, and conversion planning, the project will come to a screeching halt. Prevent this by investing in a detailed Data and Data Quality Assessment. Figure 1 below depicts at a high level the data process life cycle that companies must take in order to understand, scrub and enhance their data in preparation for a successful conversion to the vendor system(s).
