Imaging Workflow Turns Claims into Electrons

What a start-up insurance company lacks in a household name brand, it makes up with other efficiencies many traditional insurance companies cannot match—at least not as quickly as a greenfield operation.

Started in May 1996, executives from Canadian Direct Insurance Inc. (CDI, New Westminster, BC), a personal lines property and casualty insurer, knew that in order to survive, the company would have to operate more efficiently than its competitors.

"Typically in insurance, 90 percent of information is on paper," says Vince Muto, vice president of claims operations at CDI (US$45 million in gross premium, and owned by HSBC). "In relation to our main competitors, we are over 50 percent more efficient because of our processes and technology."

Muto attributes a large portion of CDI's efficiency to its imaging and workflow processes. "The combination of imaging and workflow power the technology," says Muto. In fact, Muto says some of CDI's rapid growth is attributable to its efficient processes. "We have more than doubled our size since inception," he says. "At the end of '97 we had 25,000 policies, 50,000 at the end of '98 and 100,000 policies now."

As a start-up in 1996 the company did not have the conversion problems an older carrier might face. "We were able to start with a brand new system, so there was no data or information to convert into the new process," he says.

Although launched in '96, CDI didn't choose its imaging and workflow system until late '97, Muto says. "I had a vision of what I wanted to see" in a workflow system, "but to transfer it into a blueprint is very hard," he says. Eventually CDI chose Eastman Software's (Billerica, MA) Enterprise Workflow package. "We also had an IT systems team from the HSBC bank," help implement the system. CDI also utilized services from systems integrator ISL Consulting (San Francisco).

CDI customized the system by working with some existing technology, mainly Lowell, MA-based Allenbrook's Phoenix property and casualty administration system. "Phoenix supports the claim, but there was some disjointedness between Phoenix and the imaging system," explains Muto. "We took the note-taking function out of Phoenix and we created a note-taking capability that attaches to the images."

Phoenix and Eastman's Enterprise Workflow package run on a Windows NT 4.0 server, with desktops on Windows 95. The database engine for claims information and images is Microsoft's (Redmond, WA) SQL server 6.5, and outgoing faxes are automatically imaged using Somerset, NJ-based Optus Software, Inc.'s FACSys 4.7. Incoming faxes are imaged by Eastman's Fax Manager. Finalize claims are stored on optical storage devices.

Despite the challenges of linking different systems together, Muto says the biggest problems were not getting the system up and running. "The problem was converting the traditional claims adjudicator to a new process," he says.

The resulting process for a claim is completely integrated, says Muto. "Claims information is processed immediately," he says. "The process has shifted from getting the work, to actually doing the work." Adjusters and call center reps "have the ability to receive and send faxes from the desktop. Because of the technology, the adjusters do not need clerical support. As a result, we have the ability to offer competitively priced products." CDI receives almost 2,000 claims each month. The number will continue to grow, says Muto, as CDI's book of business increases at a rate of 10 to 15 percent annually.

Currently, CDI is working to expand the workflow and imaging system to include e-mail and to offer Web connectivity to customers and partners, such as body shops.

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SOLUTIONS: At a Glance

COMPANY NAME: Canadian Direct Insurance, Inc. (CDI, a division of HSBC), New Westminster, BC, US$45 million in gross premium.

LINES OF BUSINESS: Automobile and homeowners' insurance.

VENDOR/TECHNOLOGY: Eastman Software's (Billerica, MA) Enterprise Workflow; Allenbrook's (Lowell, MA) Phoenix; Optus Software, Inc.'s (Somerset, NJ) FACSys 4.7; Microsoft (Redmond, WA) SQL Server.

THE CHALLENGE: Increase claims efficiency and reduce costs by imaging all claims documents.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio