Charles Hanna, senior insurance industry manager at Hyland Software, explains why enterprise content management (ECM) technology is helping the document-intensive insurance industry streamline processes and accelerate business growth
In addition to the seismic operational challenges arising from global events ranging from natural disasters to the Eurozone crisis, today’s insurance sector and other financial institutions also face considerable pressure to comply with a raft of new regulations.
More specifically, total compliance with the wide-ranging Solvency II directive includes not only the ability to demonstrate capitalisation requirements but also means adhering to best-practice governance, risk management, disclosure and transparency requirements.
Some insurers are introducing data warehouse technology to store information and records as required for compliance. Yet, in many cases, ECM can make a more compelling alternative, not least because it enables firms to manage data responsibly and demonstrates the appropriate data trail. In addition, ECM solutions create certified records management, allowing documents to be saved or removed in line with legal guidelines.
Better technologies, better business
Instead of turning to technology simply to demonstrate compliance to the Financial Services Authority (FSA), a more strategic view might be that technology can further the potential for business growth.
Put simply, it is not strategic to invest in technology simply for the purposes of compliance. Rather, the technology should be seen as mechanism to grow the business and, in turn, help to fund the capitalisation requirements. It is also an invaluable opportunity for insurers to re-evaluate data management, quality and general business processes.
Using ECM to automate standard processes can significantly accelerate the writing of policies, increase written premiums and bolster financial performance. Similarly, the technology can help improve service levels and manage soaring levels of insurance fraud through more robust claims management processing. Crucially, for many firms, ECM also facilitates real-time working and enables third-party self-service and retention.
To win trade and underwrite the right kind of business requires as much data as possible. Here too, by providing a central information repository and linking together all the available documentation on a claim using best-practice workflows, ECM technology can help in gathering all the facts and thereby help the underwriter make an informed decision on whether or not to accept a risk.
As well as speeding up the time it takes to underwrite new business, the use of technology to automate manual processes has also shown to significantly reduce human touch. This frees-up underwriters, admins and other users’ time to assist with other areas of business, such as delivering new products or servicing locations which previously the insurer did not have capacity to reach – effectively growing the business and improving operational efficiencies without increasing headcount.
In other cases, where the tough economic climate has taken its toll on the budget for staff costs, technology and the automation of processes reduces the need for organisations to replace staff as they leave through natural attrition. A further critical function of a good ECM system is the ability to standardise business rules and automation across workflows ensuring, for example, that a best-practice approach is automatic when opening and closing a claim and reducing the potential for human error.
The right time to invest
Further feedback from insurance executives worldwide also consistently reveals that many in the industry feel they are to some degree held hostage by their IT, due to the considerable effort and management it takes to administer and support home-grown systems.
Whereas, in a lot of industries, technology has moved quickly, many insurers are still reliant on old mainframe systems for underwriting. As technology helps facilitate faster turnaround of business, organisations which cling on to legacy systems could be at risk of getting left behind.
The fact that the UK market is still relatively immature in its adoption of ECM technology could therefore present those organisations yet to invest with a real competitive advantage. The stakes are high. Writing more good business – and having the technological support to do it at the same rate or faster than your competitor – could be central to future success or failure, not least in the face of fallout from continuing claims crises arising from natural and man-made tragedies, as well as the regulatory obligations connected with impending legislation such as Solvency II.
Learn more at www.hyland.com/uk.