Taming Paper Tigers

With Software AG's BPM product suite, American Community Mutual Insurance Co. automates its new-business underwriting process.

It's a familiar story: paper-based processes create inefficiencies. For Livonia, Mich.-based American Community Mutual Insurance Co. (ACMIC; $320 million in premiums), the underwriting process relied on client application folders that were circulated throughout the office by someone walking them from desk to desk. The process took 18 days to complete, and if a file were misplaced, everything stopped. Also, says Lynn Phillips, ACMIC's VP and CIO, "The process was not visible to agents, so there was no communication of where an application was in the process."

Following an assessment of the underwriting process by Software AG (Darmstadt, Germany) in May 2005, the vendor recommended that ACMIC implement business process management (BPM) to automate new-business application processing. ACMIC purchased Software AG's crossvision Business Process Manager that June. According to Sue McGuire, ACMIC's information services manager, the tool can model business processes, integrate automation of activities where appropriate and provide effective monitoring of tasks/cycle times. "The value of a model-based tool is the ability to continue to optimize the business process without major rework," she says.

"The moons aligned," McGuire adds of the solution. The Software AG product suite "really leveraged products we already owned or had purchased."

Among those products were a document management system from Stellent (Eden Prairie, Minn.) and Software AG's Adabas SQL Gateway, which enables the carrier to capture policy information in its mainframe systems, thus eliminating some manual data entry, according to McGuire. She adds that ACMIC primarily uses Microsoft (Redmond, Wash.) SQL Server databases that run on HP (Palo Alto, Calif.) servers.

"Our goal was to alter the underwriting process from a pull to a push process," McGuire continues. The first step was to capture the existing underwriting process and identify the interface points that support it, she explains. "Once the process was mapped, we evaluated the numerous interfaces to determine which ones could be integrated, thus eliminating manual activities," McGuire says.

The project was implemented by a team of roughly six full-time employees, including members from both ACMIC and Software AG. The vendor's Enterprise Service Integrator and Enterprise Legacy Integrator also were deployed to synchronize information and updates with the carrier's legacy policy management systems. Following 14 weeks of testing the business flows, user interface, and scanning and indexing process, as well as the effect of user volume on the system, the insurer rolled out the new solution on June 28, 2006.

According to Phillips, on Day 1, the company took exactly three hours to receive, process and approve a "clean" application from an agent, which sold everyone on the new system.

Since completing the project, which cost approximately $1 million, according to Phillips, other areas of the business already are looking to adopt the same technology. "The business has a tool it can use, they like the way it works and they want to use it," he says, adding that the group underwriting department is next on the list to receive the technology.

Business Process Management

company

American Community Mutual Insurance Co. (Livonia, Mich.; $320 million in net premium).

lines of business

Health insurance products for individuals and for groups of less than 250 individuals.

vendor/technology

Software AG's (Darmstadt, Germany) crossvision Business Process Manager.

challenge

Cut application processing time while allowing agents visibility into the underwriting process.