Technovating Insurance Industry

Traditional insurance practices are in a state of flux due to changes in customer expectations and behavior, and mushrooming players in the domain. With competition getting fiercer every other day, customer service is becoming a key focus of differentiation for insurers. And hence, leading financial institutions are adopting strategies to transform their business models from being product and channel-centric to being more customer-centric.

Selling policies online

Insurance companies are setting up feature rich online portals to reach out to their customers, provide better service delivery, bring in more transparency, reduce costs, improve process efficiency and most importantly achieve revenue growth. Here are a few examples of how some insurance companies have setup their online portals and derived benefits from.

Web Portal Implementation by

Oriental Insurance (OIC)

The insurance giant rolled-out an online portal in September 2009, which did real time interfacing with the group's core insurance applications. It offers an integrated interface to OIC's customers, agents, brokers, surveyors, advocates as well as the company's employees. The portal has been deployed at OIC's data centers in Mumbai and Bangalore. It is accessible over the Internet to the general public, customers and business partners.This can also be accessed over the intranet by the employees of OIC from 1000+ offices (15000+ employees). The portal is SOA based, and works upon real-time integration with the core insurance application in the back-end using web services. It provides role based access for customers, business partners and internal-employees. It is mobile enabled and has undergone integration with a payment gateway, email server, SMS gateway, and a document management system.

Challenges faced: As online policy issuance was a new phenomenon for the officials, bringing in users from different departments together in multiple workshops (user requirement phase, prototype demonstration phase, testing phase, etc.) was a major challenge for them. Also integration of the portal with the core insurance system was a technical challenge and was dealt with efficiently.

Benefits to customers: This enabled them online buying of insurance policies without any manual intervention and anywhere, anytime buying of policies payment through credit-card. Availability of digitally signed policy documents and online generation of previous policy schedules at the click of a button was very helpful for them. Dashboards for all the business partners — showing premium/ commission figures for agents/ brokers, renewal alerts, etc helped them in fast decision making. Besides, online grievance redressal mechanism, automated alerts to customers, agents and brokers and workflow based claim processing were other major benefits for them.

Benefits to OIC: The platform, being integrated and convenient for customers to transact and interact with their insurer, led to introduction of a new revenue channel for the company and quick selling of policies. Effective grievance redressal, complaints management, transparent escalation mechanism, proactive alerts via SMS/emails led to greater customer satisfaction, reduced manual interventions, enhanced self servicing and various collaborative tools, etc. It has also provided a single window to its partners (agents/brokers) — empowering them to view their business details at a click of button, generate business for the insurance company (through online selling of policies) and help them service their customers better. All this has directly reduced the load on back-end processes as well as people and also has made most processes effective and transparent.

Technologies used: The insurance portal is hosted on Sun's UltraSPARC T2 based servers with OpenOffice XForms, MySQL 5x Integration layer on Sun's ESB Glassfish, Alfresco Content Manager, and Sun Directory 6.2.

Rewards and incentive system

The insurance sector is a highly competitive and rapidly growing industry where performance driven compensation and rewards play quite a motivational role and drives sales. But for any insurance company, it is difficult to capture and monitor performance information of its sales force and to reward them for their performance in a timely and transparent manner. Some insurance companies had been achieving this by the method of periodic data extraction from core systems, where data was subsequently manipulated using complex spreadsheets by a team of people. But the whole process is highly time consuming and error prone. Kotak Mahindra Old Mutual Life Insurance Company was also facing this issue and they looked at IT solution to resolve it. Here's what they did.

Kotak Mahindra Old Mutual Life Insurance Company's Reward &

Incentive System

This is a web application accessible over the Internet via a web browser to agents, branches, entire sales hierarchy and corporate teams across India. It automates the entire process of reward program setup, data integration, computation and reward determination. It also makes performance & earned reward data available on a daily basis to all stakeholders --beneficiaries, managers and branch/corporate staff. It was developed using Herald Logic's IntelliRADAR CMS platform. User configurable templates were made available for running various rewards/recognition programs. There is inbuilt maker-checker approval for the programs set up. Once the programs are set up in the KRIS application, the system takes over and produces the results in a completely automated manner. The performance parameters and program results are available through pre-defined reports to all authorized users in the field (agents / channel managers), branches and HO.

Challenges faced: Major challenges faced were complexity and varying business logic of the programs. Also data integration challenges of KRIS with 3 systems PAS, HRMS/ODS, Sales Portal was another challenge. The main implementation partner of the project was Herald Logic.

Benefits: The solution started immediately benefiting its stakeholders that included its agents, about 35,000+ to track their performance and achievements for the various reward programs. Such direct visibility of achievement and rewards became a significant driver of sales performance. Also Channel Hierarchy Managers at all levels (2000-3000) can monitor the individual performance and achievements of the agents and drive performance using the intra day/EOD reports. Business user empowerment has eliminated time lag from identification of business requirement to its automation. The hardware included Application/Rule Engine AIX, VM Ware 2 x 1 CPU 2.53, 4 GB RAM, 60 GB HDD Database Oracle 10g on IBM AIX. The software included IntelliRADAR - Web based business application platform from Herald Logic, Apache web server Oracle 10g DB in IBM AIX, etc.

Need of Automation

Insurance companies have also been facing the issue of lack of automation and the related impact on the productivity. Let's look at the underwriting, which involves assessment of the eligibility of a customer to receive their products. Traditionally, the insurance policy underwriters and application process agents used to manually assemble all the information they needed from large paper files, analyze the data, and determine premium rates, etc. Because of the lack of visibility of the end-to-end process, underwriting often takes almost two weeks to complete, with scope of errors due to manual interface involved. But with the increase in competition in the market and with the rapid growth, companies themselves are experiencing, the insurance companies are facing the need of reducing the average TAT from weeks to hours. Reliance Life Insurance Company

resolved this problem by deploying a Business

Process Management and Automation solution. Let us see how.

Reliance Life Insurance's New Business & Underwriting Process Solution

The company was using a Core Insurance Policy Admin System which runs on AS/400, Documentum as Document Management Solution to maintain customer applications and other process documents, an auto underwriting engine called Insure Connect (INSC) to process customer cases through INSC and categorize case as underwriting case or jet case, and a policy tracking system to share application status with all stake holders. However, the company lacked a formal system for managing the steps involved in underwriting that is receiving submissions, analyzing data, and providing approvals, etc.

It started off with the implementation of captive scanning solution at the branches which used to scan the documents at the branches all over India and store in Documentum at the central level. A small workflow used to take care of contract creation and quality check and the cases used to move to dispatch.

In the next phase, the end to end automation of the whole process was implemented wherein the branches used to scan the proposals and flow in batches to the Documentum server which acted as a central document repository. The proposals used to get triggered from Documentum into the Savvion workflow and get assigned to the user for the action. The Workflow has steps of contract creation which help user to register customer in Life Asia and create his contract.

Benefits: With the process in place, BPM solution helped RLIC to reduce TAT time from two weeks to one day in case of JET cases ((non-medical case which can be directly issued), reducing lag time and ensuring that tasks don't fall through the cracks. In addition, operations costs have been significantly reduced. Savvion seamlessly integrates all the systems, giving RLIC end-to-end visibility and control of the complete policy underwriting life cycle in real time. This visibility and control also reduces errors, build transparency and increasing the quality of the process which, in turn, increases customer satisfaction. Savvion has helped them to scale BPM solution as per tier needs. The solution easily supports 1000 concurrent users and volumes of up to 30,000 new policies per day during the peak season of January through March. The solution is based on Savvion, Oracle 10G — RAC, Websphere Application server, Documentum, Captiva, and Websphere Process Server.