Winner
By Bill Kenealy
Farmers Insurance Group
Can an insurer make a significant improvement to its claims process while maintaining a legacy sys- tem? Los Angeles-based Farmers Insurance Group managed to do so by integrating a business process management (BPM) solution into its existing
claims environment.
The carrier’s ability to accrue immediate benefits
from the BPM system while it is still it in the midst
of developing and putting out its modern enterprise claims system replacement is
notable.
Currently in use for its auto lines,
the rules-driven BPM system was
built using technology from Cambridge, Mass.-based Pegasystems
Inc., and gives Farmers’ customer
service representatives a single,
simplified presentation layer to record first notice of loss. The new
system also includes workflow process managers to trigger alerts at
critical junctures in the claims life-cycle, such as document arrivals,
subrogation, recovery and reinsurance. It also provides a centralized
repository that captures a record of
historical data from various transactions throughout the claims process.
“The key is to keep it in one win-
dow for CSRs,” says Bob Evoy, SVP
for shared services, Farmers. “Be-
cause they are now getting more in-
formation, faster, they are now able
to have more of a dialogue with cus-
tomers. They’re pretty happy with
the tool.”
Since the systems’ rollout in Janu-
ary 2010, the evidence of its worth has been more
than anecdotal, Evoy notes. “We’re 25% more effi-
cient, and we’ve seen quality improve by 6%, which
was a pretty big leap because we were not poor to
begin with,” he says.
These numbers are all the more estimable considering the BPM layer is working with the company’s aging claims system.
Shohreh Abedi, CIO and VP of claims applications – IT, says she expects the company to derive
even greater benefits from the BPM offering as the
firm completes its concurrent and complementary
transition to a modern enterprise claims systems,
Oracle’s Siebel 8.
“Normally, with BPM you get
better functionality [paired] with a
modern claims systems,” Abedi
says.
From an architectural point of
view, Farmers is leveraging BPM to
build consistent processes. “We
looked at all the different adjuster
processes and came up with a
standard one to build into the BPM
tool,” she says. “BPM has helped
us take our best practices and
processes and automate them as
much as possible.”
One of the primary benefits of
automation is that it begets consis-
tency, Evoy notes, adding that re-
ducing complexity for end users
was another primary goal of the
undertaking. “My view from the
business was to give the informa-
tion to frontline people when they
need it and not rely on them re-
membering to go get it,” he says.
“If they have to remember, your
consistency goes out the window
and then so does your ability to
achieve the highest quality.”
Yet, Abedi notes, adding BPM is
not merely a technical endeavor. She says that carri-
ers that build BPM tools into their claims process
without first re-examining underlying business
Supporting Cast
Pegasystems
“This took
months of
working hand-
in-hand with the
business. Some-
thing like this
could not have
been achieved by
requirements
documents
passing back
and forth.”
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practices, and if necessary re-engineering them,
may simply be automating obsolete or unnecessary
steps. “To be successful, you have to look at the
processes and see what actually should change,”
Abedi says.
To accomplish this holistic reassessment of the
processes being automated, tight collaboration be-
tween business and IT units was vital. “This took
months of working hand-in-hand with the busi-
ness,” Abedi says. “Something like this could not
have been achieved by requirements documents
passing back and forth.”
Abedi adds that the company implemented a
formal change management process in order to
communicate the “hows and whys” of the process
to its broader CSR base. “Some companies feel that
change management is fluff, too touchy-feely or a
waste of money, but we embraced the process and
made sure we had solid champions at the senior
levels of the business,” she says. “People buy in
when they feel they have been heard. We didn’t sit
in an ivory tower, coming up with a plan to force
this on the masses.”
With the system implemented and end users happy,
Farmers can concentrate on the business advantages
it brings to bear. One large benefit is shorter training
time. Evoy says this benefit will pay dividends in
the event of a catastrophe when the company needs
to bring extra hands in to its call center and rapidly
get them up to speed. “When a hurricane comes,
you have a couple of days to prepare for it,”
he says. “We can now put 300 extra people on
the floor and have them do competent work. That’s
a big difference from the past. Now, we can
get consistent quality even though we’re adding hun-
dreds of people on short notice.” — Nominated by
Pegasystems
