Hastings Mutual Insurance Company (Hastings, Mich.) has been underwriting households, farms and businesses since 1885. Our long history of high-quality service to policyholders has made ours a trusted name in five Midwestern states, while our financial stability has earned an A+ rating from A. M. Best.
Historically, Hastings Mutual has always sought to use technology to improve the way we do business with our agents and policyholders. For example, in the early '90s, we implemented a client-server claim handling system to help our adjusters provide faster, better service to insureds and claimants. However, by 2002, there were a number of areas where our operations could benefit from improved technology. In agency interaction, underwriting and claims, fundamental business trends demanded that we upgrade our infrastructure.
Business Trends Requiring Change
To sell insurance through independent agents, a carrier must be easy to do business with. The expansion of Internet technology meant that more and more agents were looking to do business with carriers over the Internet -- submitting applications, checking on claims status, etc. To meet this need, we launched an initiative to provide Web-based tools to agents in select lines of business.
At the same time, we began a workflow and document management project to streamline our own internal underwriting processes. By automating the way applications are routed through the department, we can accelerate the underwriting cycle and improve our service levels to customers.
Finally, in claims -- where we were still relying on that same client-server system -- both business and technology factors led us to deploy a new core platform. A cumbersome and manual claim setup process meant that claims did not always get to the right person as quickly as we would like. A simple diary system limited our ability to proactively manage the claim process, and supervisors had limited visibility into the status of their teams. On the technology side, an outdated architecture was preventing us from migrating to Windows 2000/XP.
Modernizing the Claims Process
After a thorough evaluation process -- including research into more than 20 vendors, an RFI (request for information), a detailed RFP (request for proposal) and extended examinations of four finalists -- we selected Guidewire ClaimCenter as our new claim system for all lines of business. In addition to its modern, Web-based architecture, a key factor was ClaimCenter's flexibility to accommodate our requirements both now and in the future; one of our overriding imperatives was to deploy a solution that could continue to evolve with our business, instead of becoming out of date after just a couple of years.
Tailoring ClaimCenter to our needs was a collaborative process involving a small team of Guidewire (San Mateo, Calif.) consultants and Hastings Mutual resources from both claims and IT. In a series of workshops, claim supervisors and adjusters worked out specific functional requirements -- what fields to add and remove, how claims should be assigned, what activities should be assigned, etc. Then the configuration team made those changes to the system, using XML and business rules. Because changes were visible in minutes, the team was able to give iterative feedback to refine the configuration. At the same time, a small integration team was defining integration requirements and configuring interfaces to the mainframe policy system, check system, bill review system and other systems.
ClaimCenter then had to pass a series of rigorous tests, using every possible policy type and every known sequence of financial transactions. Adjusters performed user-acceptance tests to ensure the system could support their day-to-day activities, and two weeks of "financial integrity" tests verified financial accuracy during simulated production operations. Finally, over a five-week period, the entire claims department began using ClaimCenter. Because many adjusters had participated in the project, a large majority of users were highly satisfied and able to make a smooth transition.
Benefits of Modern Technology
Today, Hastings Mutual's claims organization is accustomed to ClaimCenter's intuitive layout and easy access to information. In addition, the new system has made possible several significant improvements in the claim process, such as:
- All losses are reported directly to the home office and assigned out automatically for greater efficiency;
- Segmentation of claims by cause of loss and severity automatically directs claims to the most appropriate adjusters;
- Initial reserves are calculated immediately based on claim characteristics;
- Supervisors have real-time visibility into their teams' workloads;
- The time to train new claims staff has been significantly reduced; and
- Multiple people can be working on the same claim at the same time.
Ray Rose has worked at Hastings Mutual Insurance Company since 1975 and has been a project manager for the last three claims systems deployed at Hastings Mutual. Ray holds the Associate in Claims and CPCU insurance designations and recently completed a two-year tenure as president of the West Michigan CPCU chapter in Grand Rapids, Michigan.