The End of the Paper Trail

It's not often that an insurer can cut costs and improve competitive advantage at the same time. So, when Novato, Calif.-based Fireman's Fund Insurance Co. (FFIC) saw an opportunity to do just that, the carrier, a subsidiary of Allianz Group (Munich; $4.4 billion in 2004 gross written premium) that provides commercial and personal P&C coverage through more than 3,000 agencies nationwide, moved quickly.

Prior to 2003, FFIC printed, collated and shipped thousands of policy documents to agencies. That cost time and money on both ends, so the company decided to put as much of the paperwork as possible online. "We wanted to cut costs and make business easier for agents and our own employees," says John Glennon, information technology product manager for Fireman's Fund.

'Minimally Invasive'

In August 2002, FFIC issued an RFP for a "minimally invasive" solution that could cope with eight different policy issuance systems and a legacy printing process. An important goal was to reduce policy printing by 25 percent.

After narrowing the vendors to three, FFIC selected Toronto-based Xenos' d2e Platform to convert its IBM (Armonk, N.Y.) Advanced Function Presentation (AFP) files into a format that would work on the Web. "Their solution was the easiest," says Doug Ackerman, FFIC's lead systems engineer on the project. "Their tool transforms the IBM files into PDF format and can do so through a whole set of policies."

Development began in October 2002, and by April 2003, the new system - which FFIC calls Policy View Online, or PVO - was available companywide and in use by selected agencies. Most of the system development was done in-house, with technical assistance from a Xenos engineer who helped with customization.

"We took some of the 40-page documents out of PDF and put in a link to the form," says Ackerman. "This saves users disk space as well as time because they can find what they're looking for a lot faster."

Other tasks included building the front-end system for putting the documents on the Web. Still, implementation costs totaled less than 1 percent of FFIC's annual IT budget, says Glennon. The carrier declines to outline its technology spending but says 2003 savings were estimated at $640,000 above implementation cost, with full-year savings now running about $2.3 million.

Today, PVO is in use by about two-thirds of the 3,000 agencies appointed by FFIC. "They love it because an agent or a customer service rep no longer has to listen to on-hold music while someone in our office plows through a file cabinet to find the answer to a question about coverages or billing," says Glennon. However, "Some still prefer paper because they want something to be able to hold," he adds. FFIC expects more agents to switch to PVO as word gets out about how much time the online system saves.

In hindsight, Glennon says, FFIC wishes it had put a year's worth of prior data online, too, to make it easier for agents and employees to research older policies. But even without that capability, PVO is working well, he relates. "Anything that gives an agent more time to develop new business is a good thing," he says. "And in the business we're in, new business is the only way to succeed."

---

Case Study Profile

Company

Fireman's Fund Insurance Co. (Novato, Calif.), a subsidiary of Allianz (Munich; $4.4 billion in gross 2004 premium).

Lines Of Business

Commercial and personal P&C.

Vendor/Technology

Xenos' (Toronto) d2e conversion platform.

The Challenge

Reduce costs and increase efficiency by putting policies online.