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AAA of Southern California Chooses Guidewire

Automobile Club of Southern California begins replacing its legacy claims environment with Guidewire Software's ClaimCenter.

Seeking greater functionality and ease of use, Los Angeles-based Automobile Club of Southern California (Auto Club) -- the largest member of the AAA federation of motor clubs -- selected Guidewire Software's Web-based ClaimCenter solution for end-to-end claims functionality. Auto Club ($2.3 billion in 2006 premium) began the implementation with consolidation of its legacy claims systems on the Guidewire platform and plans to complete its first rollout of ClaimCenter within nine months, with a full implementation across all lines within two years, the company reports.

Auto Club decided to replace its legacy systems in order to deliver competitive claims services in the property and casualty industry, relates Cortland Ray, the carrier's VP for claims. "We have several legacy mainframe claims systems that have been in place for 10 to 20 years, and we have also expanded in the market and acquired more claims systems in the process," he says. "The idea of our replacement strategy was to move to a platform that was more user-friendly and had more functionality."

Auto Club's current claims environment includes many manually intensive tasks and does not permit real-time data sharing across the organization -- a capability that the company identified as key to providing competitive member service, according to VP and CIO Michael Kerrigan. "We didn't want system or technology limitations to hinder our business growth or service capabilities," he says.

The selection process for a new platform began more than three years ago, according to Ray. After test driving three solutions, he says, Auto Club ranked San Mateo, Calif.-based Guidewire's ClaimCenter system No. 1. "One [criterion] was Guidewire's track record in the marketplace," Ray explains. "Another criterion was ease of training, and a third was the ability to use the system out of the box without extensive customization," Ray adds, noting that training time for new claims adjusters on the Guidewire system will be reduced by more than 50 percent.

Multiple Claims Benefits

In addition to eliminating manual tasks and enabling sharing of electronic claim files, Ray says, Auto Club expects the benefits of the Guidewire solution to include improved claims practices through automatic assignment and rule-driven handling, enhanced management-reporting capabilities with expanded data collection, reduced loss costs resulting from the ability to identify cost-reduction opportunities and recoveries, and the reduction of IT maintenance costs by moving to a single platform for all lines of business.

While Ray declines to share the cost of ClaimCenter, "It certainly had to make the threshold of meeting a good ROI, but that was secondary to the fact that it could get the job done in the first place," he says. In terms of the magnitude of that job, Ray adds, he expects the implementation "will likely have the biggest impact on claims workflow that we've seen in the last decade."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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