The proof of the pudding, as they say,                            is in the eating.

Claims Modernization

The Client

A multiline, multi-billion dollar propertycasualty insurer had built a reputation for delivering quality service that put it consistently among the top-ranked companies in claims handling and customer care in the nation. Not resting on its laurels, client wished to climb up even further in the rankings to become the best in claims handling.

Business Situation

For insurers, handling claims efficiently and quickly is essential in order to minimize processing expense, reduce “leakage,” and keep customers happy. However, this insurer’s legacy claims administration platform was no longer up to the task. Specifi cally, the carrier needed to achieve:

  • Reduced claims cycle time. Featuring only a “green-screen” interface, the system’s complex navigation made it difficult for staff to learn and use. The insurer needed a system that would enable it to streamline and automate claims processes from intake to settlement. The solution needed to include robust workflows that would guide claim reps and CSRs through the process and allow better management visibility to status of claims. And finally, it needed to integrate effectively with both internal and external systems to eliminate discontinuities in claims 
  • Reduction of allocated and un-allocated loss adjustment expense. The company needed to automatically segment claims into those that could be handled via straight-through processing and those that required handling by adjustors. This would provide better workload distribution and more effective management of internal resources.
  • Creation of a fl exible platform to respond to business needs and market conditions. The insurer’s legacy mainframe claims system lacked web-based capabilities and the ability to automate business processes or create new workfl ows. Its COBOL coding also made it expensive to maintain and resulted in a backlog of system change requests. The company was under increased competitive pressures because carriers with newer and fl exible claims platforms could resolve claims more quickly, provide better customer service, and offer web-based self-service. Other carriers were also able to effectively automate claims workflows and claims-related processes, such as fraud detection.
  • Service for a changing customer base. The demographics of both the agents and the customers of this company had changed. Users who had grown up with the web, instant messaging, and other social networking technologies demanded to conduct business and file and monitor claims over the web instead of through phone, fax, or green-screen system interfaces. 

It was clear to the company that it needed to upgrade its claims technology. However, it lacked an internal consensus on the best course of action for its unique operations, including whether to buy a claims administration solution, rearchitect its existing platform, or build a new system internally using investments that had already been made in development platforms and BPM technology.

Faced with very important drivers and myriad set of options, the company turned to X by 2 to create a technology strategy that would enable best-in-class claims processing.

Services Provided

  • Business Capabilities Analysis
  • Application Architecture and Strategy
  • Integration Architecture and Strategy
  • Buy v. Build Analysis
  • Package and Solution Evaluation
  • Time and Cost Analysis
  • Implementation Strategy and Roadmap

Our Work

The insurer engaged X by 2 to provide a detailed and objective analysis that would translate into the best solution for its business. The company chose X by 2 for breadth and depth of expertise, a specialization in the insurance industry, and successes with previous engagements. 

X by 2 began by developing a thorough understanding of the company’s goals and objectives for optimizing and differentiating its claims process as well as the company’s existing systems environment and enterprise architecture. Working with the insurer’s business staff, X by 2 established and prioritized goals and objectives. Analyzing both strategic problems and tactical pain points, X by 2 identified root causes of problems, tied root causes to limitations in the current claim platform and architecture, and arrived at new business and architecture requirements.

The analysis included both the “build” and “buy” options and fully explored the impact of the different implementation alternatives, internal development resource requirements, and overall risks of either option. All leading solutions in the marketplace, based on X by 2’s industry experience and a thorough review of independent analyst research, were considered.

X by 2 accomplished the following:

  • Established critical success factors. Based on X by 2’s analysis, knowledge of the solution marketplace and claims best practices, a thorough set of business and architecture requirements was established against which vendor solutions could be measured. X by 2 was also able to assess pre-existing assets at the client and from global consultants and systems integrators in order to jumpstart the project and reduce costs and risk.
  • Identified and evaluated required resources. X by 2 assessed the sources that would be needed on both the business and technology side to ensure project success. These included both domestic and off shore consulting firms and system integrators, who were evaluated for their ability to address the critical success factors that were established. The existing systems were then analyzed relative to the functional needs of the various user groups, the technology architecture, capabilities for integration with legacy systems, and total costs of ownership. X by 2 recommended a course of action that would meet business objectives and fulfill the needs of the enterprise.
  • Identified potential risk areas and established risk mitigation strategies. X by 2 conducted a deep architectural review of these systems, conducting multiple, full-day meetings with vendors and putting systems through customer-specific business as well as architectural “use case” scenarios that would be encountered in production, rather than simply relying on vendors’ prepared demos and scenarios. In addition to assessing specific features and functionality of systems, vendor solutions were evaluated for their technology architecture, security, workflow functionality, integration capabilities, and SOA readiness. X by 2 also calculated the total cost of ownership of each platform, including upfront development and customization costs, licensing and maintenance, hardware and software requirements, and support.

Benefits Realized

X by 2 performed an objective and thorough analysis of the entire spectrum of options available, including solutions developed using in-house resources and available within the marketplace. Because X by 2 evaluated available options across multiple dimensions, the insurer can fully understand the business implications and consequences of all viable choices.

Due to the extensive due diligence done, the insurer was able to embark on the initiative with clear understanding of common expectations across business and IT, which is essential to success, as well as potential challenges likely to be encountered and ways to overcome them.

Additionally, by providing an objective voice that speaks the language of both business and technology, X by 2 enabled the company to bridge the gap between business and development staff and, within the IT organization itself, between the proponents of “buy” and advocates of “build.” It also allowed all constituents to have confidence that every aspect of the situation was considered and that all voices were heard, which made it easier for people to rally behind fi nal decision.

Today, the insurer has an action plan that is rooted in factual information and aligned with its enterprise architecture. This framework provides a specific roadmap for success regardless of the option chosen. With clear direction established, the company has also expressed interest in having X by 2 assist with project planning and mobilization.