Think way back to your days in high school chemistry class, and you may vaguely remember your teacher talking about chemical reactions. One of the basic concepts imparted to you at that time was that the overall rate of a chain reaction is controlled by the slowest reaction in the chain. No matter how fast the other elements want to react, they have to wait for the slowest element to do its thing before they can proceed. It's not much different than approaching a slow driver as you speed down the highway. You may want to step on the gas, but you're at the mercy of the puttering car in front of you.
When you're talking about reaction rates, it's not too difficult to make the transition from chemistry to the IT world. Take The BISYS Group, Inc., for example. As a part of its overall service offerings, the company acts as an insurance broker between agents and insurance companies. Working with more than 100,000 agents and almost every major insurance company, BISYS is a formidable middleman. Being the largest insurance brokerage agency in the United States, however, has not allowed the company to mandate sweeping technology initiatives in the insurance industry. Instead, BISYS has had to pull back on the technological reins and wait for the insurance industry to make its moves. Like the aforementioned chemical reaction, BISYS can only move as fast as the insurance industry deems prudent.
"From a business technology perspective, we are as far out on the edge as any company in the insurance brokerage business. We believe that no other company can offer what we can," comments Michael Hauck, business leader of technology at BISYS Insurance Services (one of three main groups within BISYS). "However, because the insurance industry is slow to adopt new technologies, we are unable to fully capitalize on our technological advancements."
For its part, BISYS is not merely a bystander in the technological reaction. The company, with 800 employees in its insurance business, has been a catalyst for change in the insurance industry. Using document imaging and management software, BISYS has worked with insurance companies to expedite the processing of insurance applications. Its Web site, which allows agents to automatically access critical data and forms, is increasingly handling more traffic. And, while still in an early testing phase, wireless technology is on the radar screen at BISYS and may be used to offer anytime/anywhere access to data for agents in the field.
Document Management = Big Efficiency Gains
More than any other industry, the insurance industry is ruled by paper. So voluminous is the amount of documents that BISYS handles every year, that Hauck has trouble keeping track of how many millions of pieces of paper flow into his company annually. Suffice it to say that handling hard-copy paper documents is the number one bottleneck in processing insurance requests. Not only does BISYS handle the paper, it then passes the paper to the insurance companies. Jerry Whetnall, CTO at CNA Life Insurance Companies (Nashville, TN) explains, "We had way too much duplication of effort in the chain. The insurance broker (BISYS) receives the paper from agents and enters the data into its proprietary agency management system. Then, that paper gets sent to us and we enter the data again. We are always looking for inefficiencies, and the place where we could get the biggest bang for our buck was in the electronic exchange of images and data."
Using snail mail to send documents from BISYS to CNA Life, for example, also took a lot of time. In some cases, the time from when the application was signed to when it was received by CNA Life was as long as two weeks. This process, acknowledges Whetnall, "wasn't fair to the applicant." With a document management solution from PaperClip Software (Hasbrouck Heights, NJ) in place at BISYS, paper documents are converted to electronic images. The document management software indexes and stores the images. The images are then transmitted electronically between companies via the PaperClip Internet Express electronic document exchange service, a communication solution designed to interconnect dissimilar document management solutions with no programming. As a result, the once time-consuming processes moved much quicker and all parties involved with the transactions realized efficiencies.
BISYS uses 15 full-time employees and Bell & Howell (Lincolnwood, IL) scanners to scan and index documents received from agents. Once the paper is converted to electronic images, it is transmitted via PaperClip Internet Express to particular insurance companies that subscribe to the service. At that point, the companies can begin to process the requests. "We have automated underwriting systems that receive the images and data and determine if more information is needed to handle a request. If more information is required, then the system automatically generates requests and sends them off. Once all the information is received, the case is automatically presented to an underwriter," says Whetnall. "If all the required information is received initially, we can turn around a request in short order. A very high percentage of long-term care requests get turned around in 24 to 48 hours, for example."
For legal reasons, however, the insurance companies cannot issue a policy until the hard-copy documents are received. Thus, the electronic information is used to process a request while the hard-copy documents are en route.
CRM And Web Are Critical To Success
While e-business may be a way of life for industries such as manufacturing, the insurance industry has been slow to catch on. Much of the information stored in BISYS' agency management system and documents in the PaperClip Software document management system are available to agents on a password-protected Web site operated by BISYS. Accessing information online would certainly seem preferable for agents, but BISYS handles most agent requests the old-fashioned way - by phone. "At one point, we were handling about 50,000 calls per month, but that has settled down a bit," adds BISYS' Hauck.
BISYS estimates that 15% of its agents are regularly using the company's Web site to access data and information, and a total of 25% of all agents communicate with BISYS through e-mail. While those are not jaw-dropping numbers, the company has seen steady growth and expects usage to increase significantly when bandwidth limitations are less of a barrier. "This is a paper-intensive industry," explains Hauck. "An agent could easily find himself trying to download a 50-page insurance form that is a 3 MB PDF (portable document format) file."
Instead of taking the afternoon off while their PCs are downloading the PDF files, agents usually pick up the phone and talk to BISYS representatives. Currently, the company does not have a full-blown CRM (customer relationship management) system in place, but BISYS is in the process of evaluating possible solutions. As far as call center management is concerned, the company relies heavily on a solution from Avaya (Basking Ridge, NJ). "We could probably identify 10 types of questions that are asked by 90% of the agents," says Hauck. "That is why we are exploring IVR (interactive voice response) technology that will allow us to automate the call center process."
Moving Toward A Transaction-Based Model
From BISYS' point of view, the company would like the insurance industry to move to a more transaction-based model. The dot-com revolution brought about changes in stock purchases and retail commerce. These once lengthy processes are handled online as a relatively simple transaction. "Why should buying life insurance be any different?" asks Hauck. "It is what it is because the entire industry moves slowly."
CNA Life's Whetnall would probably counter that buying life insurance is different than those other transactions. Privacy laws restrict access to the personal data required by insurance companies and are in place to protect customers. As good as the technology is, the insurance companies must comply with all federal and state laws that are in place - quicker turnaround or not. "When you get right down to it, the insurance industry is based purely on trust. All policyholders get from us is a piece of paper and a promise. We won't do anything to betray that trust," adds Whetnall.
And, there sits the technology chain reaction. One company wanting to move as quickly as possible, while the industry - agents, insurance
companies, and governments - takes a much more measured approach. The fast is controlled by the slow. Either the fast must slow down, or the slow must speed up. Place your bet on the latter of the two, according to Hauck. "The industry is getting to a point where there isn't much of a choice. We are seeing changes. People are opening up to new ideas about technology that they would have never embraced in the past."
Questions about this article? E-mail the author at EdH@corrypub.com.