accelerating the claims process: reduce costs and … · case studies throughout the paper will...

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For those in the insurance industry looking to optimize their claims processes, our white paper will guide you through a solution accelerator model that can be applied to your business. See how our work with best-in-class technology platforms—integrated with core claims systems you already have in place and existing business processes—can rapidly deliver cost savings and enhanced customer satisfaction. Case studies throughout the paper will show examples of how these claims automation solutions work to bring efficiency to organizations across the industry.

AcceleratingtheClaimsProcess:ReduceCostsandEnhanceCustomerSatisfaction

©2017ZiaConsulting,Inc.AllRightsReserved. 2

Introduction

Introduction

Acrosstheinsuranceindustry,organizationsaremakingprocessefficiencyapriorityinorderto deliver measurable business results, including enhanced profitability and improvedcustomer satisfaction. This comes after years of investing in the replacement of legacysystems with more modern core technologies—without seeing a significant impact onbusinessresults.Nowcompaniesarelookingtoenhanceoroptimizetheirprocesses,ratherthanseekinganotherreplacement.

For many companies, whether they provide propertyandcasualty insurance,specialty, reinsurance,orothertypes,someofthegreatestefficienciescanberealizedwith a focus on the claims process.When consideringthenumbersinvolved,it’seasytoseewhy.AccordingtoanAccenturereport,amere2percentimprovementinlosscostswouldresultina$11billionannualincreaseinbottomlineresults just intheUSP&Cmarket.1Fromacustomer satisfaction perspective, the Net PromoterScore(NPS)—ametricofcustomerloyalty—isalmost30percent higher in the US for those satisfiedwith theirclaimsexperience.2

Unfortunately,inrecentyears,whileorganizationsattempttoautomateclaimsprocesses,theirability to do so has become increasingly complex for two key reasons. First,many insurancecompanies have expanded by either purchasing or developing into new areas—whether byaddingnewlinesofbusiness,expandingintodifferentstates,oracquiringadditionalcompaniesthat issuepolicieswithin the same linesof business. This has led to challenges in the claimsmailroom, where the primary job often becomes simply identifying where documents aresupposedtoberouted—eventothird-partycompaniesprocessingcertainclaimtypes.

Additionally,the informationorcontentassociatedwithaclaimhasexpandeddramatically inbothcomplexityandvolume.Younolongersimplyreceiveatypewrittendocumentinthemail,potentiallyonastandardform,fortheclaimfile.Today,informationarrivesviamail,fax,email,upload,oreventextmessage.Often,therearedigitalimagesorvideosthatmustbemanagedandstored,withtheneedtoretainmuchofthisdataforlong-termgovernanceneeds.

Asaresultofthegrowingcomplexityinthemailroomandthegrowingvolumeandsourcesofcontent,thepainassociatedwithclaimsprocessingisontheriseformanyorganizations.Theyrecognize that a superior claims experience can provide a competitive advantage over othercarriers,buttheystruggletoimprovetheclaimsprocess.Intermsofcosts,approximately75–

USP&CMarketEstimate

2%

ImprovementinLossCosts

=$11Billion

IncreasetotheBottomLine


80percentofpremiumrevenuesarespentonclaims,with20percentofthatnumberrelatedtoclaimsexpenses,soanyabilitytoreducethatexpensenumberissignificant.3

Whilea company’s goalsmaybe clear,often themethod for getting there isnot. Thiswhitepaper walks you through how an intelligent automation solution, leveraging moderntechnologies and integrated with your existing core insurance systems, can deliver a rapidreturnoninvestment(ROI)inclaimsprocessing.

Wereviewhowtodeploy intelligentcapture technologies tocreateanautomatedmailroom,the role of enterprise contentmanagement (ECM) andbusiness processmanagement (BPM)technologiesinthesmartroutingofclaimsdocuments,andtheefficienciesgainedwiththeseand other next-generation systems. Through our methodology, insurance organizations canachieve the previously unattainable goal of simultaneously reducing processing costs whileincreasingcustomersatisfactionandretention.

Don’tReplace,Enhance

As noted at the outset, many insurance organizations have focused recent technologyinvestmentsoncoresystemsmodernization,includingclaimsmodules,movingtoproductslikeGuidewire,DuckCreek,andothers—bothon-premiseandinthecloud.Buttheyhaveignoredthe fact that many of the costs associated with claims come from the actual handling ofdocumentsprior toand throughout the interactionwith these systems.Often this remainsamanual,labor-intensiveactivitywithsignificantpeople,paper,andprocesscosts.Thiswasexactlythecasewithoneofourcustomers,aregionalpropertyandcasualtyinsurerinthesoutheastUnitedStates.Afterdeployinganewclaimsmanagementsystem(oneofthosementionedabove), they found theyhad limitedefficiency gains, andadeeper study showedthat many of their costs actually came prior to interaction with claims system—in theprocessingofinbounddocumentsassociatedwithclaims.Working closely with their internal IT team, we delivered an intelligent claims automationsolution,providinganalmost immediateROI for theorganization.Westartedbydeployinganewintelligentcapturetechnologyacrossagroupofremotescanning locationsclosetotheircustomers.Thiswasdone inordertoexpeditethedeliveryofclaimsdocumentstoadjusters.These digitized documents were then fed into a centralized content hub for processing andintegratedwiththeircoreclaimsmanagementsystem.

Introduction


In fact, for some companies described within this white paper, we’ve found that theopportunity for efficiency gains is often larger when starting with mailroom automationrather than core systems modernization. This is even true with older, mainframe-basedsystemsremainingasthebackboneofthebusiness.As with any technology-based solution, the critical starting point with claims automation isidentifyingthesteps inthebusinessprocessthatshouldbeaddressed. Inthiscase,questionsneedtobeaskedsuchas:

• Howareclaimsdocumentsreceived?Bypostalmail,fax,email,upload?

• Aretheybeingdigitized?• Howishandwritingcapturedandextracted?• How are the claims identified and routed? By

businessunit,territory,adjuster?• Howareexceptionshandled?• How are documents and records being

managedandstored?In each step of this process we’re able to applymodern technologies addressing costly andcomplexmanualeffortsthatdelaytheprocessingofclaims.Puttingthesetechnologiestogetheracross the claims lifecycle, in a way that matches your business and integrates with yourexistingtools, iswhatwedefineasaclaimsautomationsolutionand istherecipeforarapidROI.Let’slookatthecomponentsinvolved.

BuildingYourClaimsAutomationSolutionSolution


Virtuallyeveryinsuranceorganizationintheworldnowhastomanagethemultichannelnatureofinboundclaimsdocuments.Theseincludepaperdocumentsinamailroom,faxesandemail,moremodernmethodssuchasuploadsintoaportalorwebsite,andevenimagesreceivedbytextmessage. Given this reality, any claims automation solutionmust address eachmethodbeingusedtoday—ormightbeusedinthefuture.While it’s possible to craft a solution that treats each of these channels individually, thegreatestgaintotheorganizationcomesfromdeliveringaunifiedprocessforaddressingclaimsdocuments however theymight be received. Claims automation solutions from Zia typicallystartwithacentralcontenthuborrepositorythatcanmanageeachofthesemethodsandthebusinessprocessesassociated.TheAlfrescoECMplatformisourchoiceforacontenthub.Asanopenplatform,basedonopenstandards,itcansupporttheingestionofdocumentsfromvirtuallyanysource,andintegrateswithvirtuallyanybusinessapplicationwithin the insurancemarket.Because theActivitiBPMengine is embeddedwithin the software suite,we are able to deliver the intelligent routingdescribedlaterinthispaper.

Alfresco provides modern enterprise content management (ECM) software built on openstandards that enables organizations to unlock the power of their business-critical content.WiththecontrolsthatITdemandsandthesimplicitythatenduserslove,Alfresco'sopensourcetechnologyenables global organizations to collaboratemoreeffectivelyacross cloud,mobile,hybridandon-premiseenvironments. Innovatingat the intersectionofcontent, collaborationandbusinessprocess,Alfresco’ssoftwaremanagesoversevenbilliondocuments,poweringthedailytasksofmorethan11millionusersworldwide.

SelectingaCentralContentRepository


Most insurance companies are well into theprocess of going paperless, including thedigitization of claims documents. However,these efforts often lack the intelligence that isavailable from a fully integrated automationsolution—whether within the digitizationprocess or later when the claims are beingrouted.Many of the first-generation digitizationsolutionsinuseinvolvedtheoutsourcingofthiseffort to a third-party document processorknown as business process outsourcing (BPO).Whilebenefitscertainlyexistfromsimplygettingdocuments scanned, it can takemany hours orseveral days to return the final documents.Often,therearesignificantcostsassociatedwithtransportingdocumentstotheBPO,andtheriskoflostdocumentsorothererrorsisincreased.With a modern, intelligent documentautomation solution that leverages next-generation tools like the OPEX Falcon Scannerhighlighted in the sidebar, much of yourpreparation time, cost, and errors can beremoved—delivering almost an immediate ROI.In this scenario, we bring digitization into theclaims mailroom allowing documents to berouted into the virtual in-boxes of claimsadjusterswithoutdelay.Thecasestudyincludedinthispaperdescribeshowdigitizationeffortswerereducedfromanaverageofeighthoursdownto15minutes.

LearnMoreAbouttheOPEXFalconScanner

TheOPEX Falcon Scanner combinesinnovative one-step drop feed scanningwiththe performance of a high-capacityproduction scanner. It provides the onlyuniversal document scanningworkstation onthe market, which makes it ideal for anintelligentclaimsprocessingsolution.Enhanced Functionality. UnmatchedFlexibility. Falcon allows operators to prepand scan documents at a faster rate thanmost current prep-only processes. Thissignificantly reduces costs associated withpreparing documents for scanning. It is ableto scan everything from single sheets tomultiple, large stacks of paper—even whenintermixed.Theconveyorcanholdmorethan700 pages at any given time, allowingmaximum throughput and uninterruptedprocessing.

IntelligentDigitizationonClaimsDocuments


While it may be hard for some outsiders to believe,many insurancecompaniesmanageclaims-relatedemail communication (andsimilarlyfaxeswhichareoftenreceivedindigitalform)byprintingtheemailandany attachments, and then sending them through the digitizationprocessdescribedabove.Obviously,thisaddssubstantialcostsintermsofmanaging the printing and rescanning, aswell as the potential forlosingdocumentsineachofthestepsoftheprocess.

Withthiscomprehensiveemailintegration,claimsdocumentsaredeliveredtotherightplaceina timelymannerwith reduced error rates—providing substantial improvements to customersatisfaction.Beforeyouactuallybeginrelocatingcontenttothetargetsystem,checkthatthenewsystemisready.

Instead of this “print and re-scan”model, a modern and intelligent claims automationsolution delivers full email integration with different features based on yourorganizationalrequirements.Theseinclude:

• Centralized claims email address: emails and attachments are automaticallydeliveredintothecontenthub,thenprocessedandroutedasdescribedbelow

• Email forwarding: adjusters or processors simply forward emails into thecontent hub for processing/routing and records management (RM)

• Draganddrop:adjusterscandraganddropattachmentsintothecontenthubforprocessing/routingandRM

EmailIntegration


Onceclaimsdocumentsarereceivedanddigitizedasneeded,thenextstepistoroutethemefficientlyandeffectively.Thisisacriticalpartoftheprocess,giventhatcomplexclaimsareonly5percentofcasesforatypicallargeP&Ccarrier,butrepresent70percentofpayouts.4Fortunately,thisisanareawheremoderntechnologiescanbeappliedtoreducecosts,time,anderrorrates.Thesetechnologiesincludeintelligentcapture,advancedBPM,andexpeditedviewing.

Byeliminatingtheneedforsomeonetomanuallyrevieweverydocument,attempttofindtheclaimnumber,andlookuptheadjustertoassigneachoneindividually,insuranceorganizationscanrapidlyprocessclaims.Thisdeliverscostreductionsandenhancedcustomersatisfaction.Let’slookatsomeofthespecifictechnologiesinvolvedandtherolestheyplay.

Withintelligentrouting,youhavetheabilitytoautomaticallyperformpreviouslymanualtasksaccurately,allowingskilledworkerstofocusonexceptionsorotherhigher-valueefforts.Someofthefeaturesassociatedwithintelligentroutingare:

• Automaticroutingofclaimsdocumentstothecorrectadjuster• Alertsandtasklistsuniquetotheindividual• Simplereassignmentoftasksforworkloadbalancingorcoverageduringan

employee’sabsence• Expeditedexceptionhandlingwithmissingclaimnumbersorotherissues• Outsideorthird-partyroutingofclaimsasneeded

IntelligentRouting


Ephesoft, Inc.deliversSmartCapture® intelligent capture technologyon-premiseor inaSaaSmodel.Witha focusonefficiencyandreliability, Ephesofthas crafted thenextgenerationofintelligent document capture in a simple and cost-effective application. The superiorclassificationtechnologyallowsorganizationstoautomateandstreamlinemailroomprocessingandotherdocument-basedbusinessprocesses.

Today’smodern capture technologies utilize full-page optical character recognition (OCR) todeliver automatic classification, extraction, and validation without the need for separatorpages, barcodes, or othermanual interventions.While a number of intelligent capture toolsexist, our claims processing solutions generally leverage Ephesoft SmartCapture™ for severalkeyreasons.

With Ephesoft, we can leverage and utilize a capture tool wherever we need it within thebusinessprocess,including:

• Mailroomautomation:forcentralizedprocessingoflargevolumesofingesteddocuments• In-process capture: leveraging Ephesoft web services to embed classification, extraction,

andvalidationwithinanindividualbusinessprocess• Mobilecapture:tocapturedocumentsanywhereandatanytimewithEphesoftSnapDoc

Additionally,thebusinessvalueofEphesoft—providingbothasubscriptionandalicense-basedpricing model without click charges or page counts—sets it apart. It’s also favored by ITdepartmentsbecauseit’ssimplertoimplement,includinglearningnewdocumentsandtrainingusers, than legacy intelligent capture tools. It is also the only modern intelligent capturetechnology to run on Linux, in addition to running onWindows, delivering further businessvalue.

NomatterhowEphesoft isdeployed, the technologygivesus theability to reviewany claimdocument,fromanysource,andautomaticallyidentifywhetherthereisaclaimnumberwithinthe document, as well as other critical information. We can then perform a validation ormatching exercise, typically against a claims database, to determine the next steps for thatdocument.

Whenthereisn’taclaimnumberincludedonaninbounddocument,thesystemcanbetrainedto identify other details from the document—such as keywords, names, addresses, or otherinformation—torouteittotheappropriatedepartment.Itcanalsobeflaggedasanexceptionwithmanualreviewrequired.

AutomatedClassificationandExtraction


WhileOCRtechnologyhasevolvedsubstantially,itstillstruggleswithhandwritingrecognition.However,modernmachinelearningoffersnewtoolstosolvelong-standingchallenges.

Newsoftwaresolutionscannowoptimizecomplexbusinessprocessesby turningevenhand-filled paper documents—like insurance applications and claims—into business-ready dataautomatically.

Handwritingrecognitiontechnologyhelpsleadinginsuranceorganizationsunlockaccesstothecustomer data they need to optimize business processes, improve decision making, andenhancethecustomerexperience.

Acompletesolutioncombinesthepowerof capture technology with handwritingrecognition to fully automate dataingestion, classification, and extractionfor straight-through documentprocessing.

The capture solution first analyzesdocuments, sorts them, and identifiestyped or handwritten portions. Theintelligent shreddingengine sends typedfields off for OCR extraction andhandwritten fields off for handwritingrecognition. Once the data is extracted,validated, and enriched, the completedocuments are reassembled andmovedinto a central content repository. Thisunique integration allows organizationstoworkwithstructured,semi-structured,andunstructuredcontent.

DealingWithHandwrittenDocuments

The Captricity platform is the world’s mostaccurate data capture solution for complexhandwritten and typed documents, offeringthe savvy enterprise access to transactionaland legacy data trapped on paper—it’s fast,secure,and99.9%+accurate.


Afterthematchingidentificationhastakenplace(oranexceptionidentified),theclaimdetailsare then populated—including metadata—and the document can be routed to the correctclaims adjuster. As noted earlier, this can include alerts and task lists associated with theindividual,aswellastheabilitytoeasilyreassigntasksforsupportingstaff,clericalworkers,ormanagers.

Forsomeorganizations,anintermediatestepinvolvinganexamineroccursinordertoreviewtheautomaticallypopulateddetails andmetadata. Theymayalsoneed toprovideadditionalinformationprior to assignment to an adjuster.These examiners could be the ones to initiatethe process of managing exceptions includingthe creation of a new claim file when one hasnotalreadybeenstarted.OneuniquefeatureofSmartCapture is the ability to automaticallybypass otherwise required fieldswhen such anexceptiontakesplace.

Withthistypeofhigh-volumeclaimsprocessingmodel, where examiners are potentiallyreviewinghundredsofclaimsdocumentsaday,the value of time savings in any step of theprocesscanbeenormous.This includesviewingdocuments to check information or find otherdetails. For this reason, many claimsorganizations choose an expedited viewingtechnology, likeSnowboundSoftwaredescribedin thesidebar.This softwareallowsany typeofdocument to be viewed by an examiner oradjuster much more rapidly than the viewerassociated with an ECM system or businessapplication. In addition, the annotation andredaction functionalities within tools likeSnowbound are growing in adoption for claimsprocessingusecases.

AssigningtheDocuments

High-SpeedDocumentViewingwith

SnowboundVirtualViewer® from Snowbound Software ispart of a next-generation suite of high-performance applications designed forviewing, annotating, and redactingdocuments and images from any platform,anywhere. Used by the world's leadinginsurance organizations, these documentviewersarebuilttoenhanceproductivityandstreamlineworkflows.VirtualViewer HTML5provides unparalleledsupport for all popular document types(including SVG, AFP, Word, PDF, PNG, PCL,TIFF), aswell as robustdocumentand imagehandlingcapabilities.WithVirtualViewer,youhave the power to do more than just viewdocuments and images. You can zoom,rotate,redact,annotate,andprintdocumentsandimagesstoredwithinyourrepository—allthroughaweb-basedviewer.


Orchestration of our claims automation solutioncomes from an advanced BPM engine. As withintelligentcapturetechnologies,thereareanumberofvendorsprovidingthistypeofsoftware—andforanumberofreasons—werecommendActiviti.

Activiti isanenterprise-classBPMplatformtargetedat thewaybusinessesworktoday.At itscoreisahigh-performanceprocessenginethatallowsorganizationstomanageawiderangeofcritical business processes. Activiti integrates with a wide range of ECM systems, includingAlfrescoOne,andpowersthousandsofprocessesforhundredsofcustomersworldwide.

Many companies have high-cost, legacy BPM systems that canwork adequately for a singlestatictask,butaren’tadaptabletotheever-changingbusinessprocessesintoday’senterprise.TheflexibilitybuiltintoActivitiallowsforchangesinthewaythatclaimsaremanaged,whethernewlinesofbusiness,newwaysofreceivingclaimdocuments(i.e.claimsportal),oranyotherchangesthatcomealong.Activitiisuser-friendlyandallowsemployeestoparticipateinsettingupnewprocesses thataresimpleand flexible.A formseditorand librarywithdrag-and-dropfunctionalityallowsemployeestoeasilycreatetheformstheyneed.Decisiontablesprovideasimple way to set up rules in a spreadsheet format. Process analytics improve compliance;identifybottlenecksandinefficiencies;determinewhat’sactiveandcompleted;andprovideahigh-levelviewonwhattasksareslowingyourbusinessdown.

AdvancedBPM,PoweredByActiviti


As anyone involved in the insurance industry can tell you, the compliance requirementsassociated with insurance are incredibly complex. There are regulations at the state level—comparedtofederalregulationformanyindustries—andcandifferbylineofbusiness.Asfortheregulatorsthemselves,theyarehighlyfocusedonclaimssincemorethanhalfofconsumercomplaintsarerelatedtothatarea.

Typically, theworldofthosewhoworkwithclaimsdocumentshasbeenseparatefromthoseresponsible for compliance. This means records management (RM) was often a costly andcomplexmanualprocesswithRMspecialistsfocusedonmovinginformationfromonesystemto another. As a result, many organizations are not able to keep up with compliancerequirements—whetherrelatedtoindividuallegalcasesincludingtheneedfore-discovery,orthelong-termstorageofrecords.

Our EasyRM approach, built on the Alfresco platform, automates the RM process. EasyRMcreates complete file plans, with retention and disposition schedules, directly from actionswithintheclaimsprocess—whetherit’sclosingaclaim,payingaclaim,orotherevent.AlfrescoprovidesasingleDoD5015.02certifiedcontenthubfordocumentandrecordsmanagementtodeliverenterprise-classreliabilityandscalability.

Whetheryouarelookingtoarchiveclaimforms,worddocuments,images,videos,oranyothertype of content related to claims, automated archiving is critical to the success of yourcomplianceprograms.Andithastheaddedbenefitofdrasticallyreducingthecostsassociatedwithyouroverallgovernanceprocess.

ClaimsandCompliance


Mostinsuranceorganizationsaresomewherein the middle of a process of evaluatingwhether and cloud-based software solutionsmake sense for them. Few have fullyembraced the cloud for all of their businessprocesses,butmosthaveat leastconsideredthe topic. Fortunately, our intelligent claimsautomationsolutioniscloud-readywhenyouare, and is deployable into a private AWSinstanceorbyleveragingSaaS-cloudofferingsfromourpartners.

Ziacloudservicesincludeinstallationandintegration,migrationtothecloud,andevenafullymanagedsolution,forusecasessuchas:

● AlfrescoECMasacloud-basedcontenthub

● EphesoftSmartCaptureforcloud-basedclassificationandextraction

● AlfrescoRMforcloud-basedarchiving

Whenconsideringwherethemostimmediatebenefitmaycomefrom,thislastpointmightbeagoodplacetostart.Asthecomplexityandsizeofcontentrelatedtoclaimscontinuestogrow—withdigitalimagesbeingreadilyavailablefromallsmartdevicesandtheinclusionofvideosinsomearchives—leveragingcloud-basedstorageandarchivingassociatedwithaenterpriseRMsystemcanprovidesignificantcostsavings.

ThoughtsontheCloud


In closing, we’ll share the specifics of a customer who deployed our intelligent claimsprocessingsolutiontoillustratehowthestorycomestogether.Followingourmethodology,andworking in a true partnership with both business and technology teams, we worked with aleading specialty insurance company, Protective, to deploy our intelligent claims processingsolution.

Together, we were able to automate their processing and revolutionize their business. Oursolution reduced the time todeliver claimsdocuments toanadjuster fromanaverageof16hours toonly15minutes. Thiswasdoneusing the featuresdescribed throughout thispaperincluding:

• CentralizedContentHub–Alfresco• Digitization–OPEXFalconScanners• AutomatedExtractionandValidation–Ephesoft• AdvancedViewing–Snowbound• IntelligentRouting–PoweredbyActivitiBPM• All integrated with a complex set of both legacy, mainframe-based claims

managementsystemsaswellasamoremodernone

At Protective, documents are now digitized in-house, they have advanced OCR applied todeterminetheclaimnumberassociatedwiththedocument,andtheyareautomaticallyroutedto the correct examiner and adjuster. All of this saves time and money while enhancingcustomersatisfactionandretention.

To learn more about our intelligent claims automation, or the Protective Insurance casestudy,[email protected].

SolutioninAction–ProtectiveInsurance


1"ClaimsataCrossroads-AccentureInsuranceBlog."AccentureInsuranceBlog.N.p.,08May2013.Web.18July2016.<http://insuranceblog.accenture.com/claims-at-a-crossroads>.

2Kauderer,Steven,andRebeccaTadikonda.Bain.com.Issuebrief.N.p.,16Apr.2014.Web.18July2016.<http://www.bain.com/publications/articles/fantastic-claims.aspx>.

3 "Driving Operational Excellence in Claims Management." Deloitte Ireland. N.p., Feb. 2011.Web. 15 July 2016. <http://www2.deloitte.com/ie/en/pages/operations/articles/operations-excellence-claims-management.html>.

4KaudererandTadikonda.Bain.com.