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EQC Improves Claims Response With Guidewire Platform

The Earthquake Commission of New Zealand implements Guidewire's ClaimCenter solution to better connect with its field adjusters and claimants.

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The Earthquake Commission of New Zealand (EQC) is a government agency that is the country's primary provider of disaster insurance for residential properties. Whenever property insurance is purchased in the country, regardless of the carrier, a part of the premium is passed along to the Wellington, New Zealand-based government agency, which in turn provides the property with disaster coverage. This arrangement left EQC (approximately US$56 million in annual premium income) looking to solve two claims-related challenges when it sought to modernize a legacy claims system running on an IBM (Armonk, N.Y.) AS/400 system.

First, according to Lance Dixon, the organization's insurance manager, since EQC insures roughly 90 percent of the country's residential properties, how it allocates its adjusters and other resources is critical, but access to the organization's legacy claims system was restricted to on-site staff and its claims processing center. "We were looking for something that could be delivered out to the field to our loss adjusters and claims people, to be able to handle claims from remote locations," Dixon relates.

Second, the organization doesn't know the specifics of the properties it insures until claims are submitted. "We just get a block of premium," Dixon explains. "So one of the challenges is finding the address of the claimant." To help, EQC wanted a solution that could integrate with its geographic information system (GIS).

Simply, Dixon says, EQC wanted a system that could unite its people and processes. "We had a number of disparate systems beforehand. We had a geographic information system [GIS], we had a document management system and we had a legacy claims system. The three of those were completely separate," he notes. "So one of the main goals for us was integration and making sure that the systems we had could all talk to each other in one package."

EQC sent out requests for proposals (RFPs) in early 2006 and selected Guidewire's ClaimCenter system by December of that year. According to Dixon, 2007 was spent implementing and customizing the system with assists from San Mateo, Calif.-based Guidewire, IBM (which is managing the contract on behalf of Guidewire) and Eagle, an Auckland, N.Z.-based distributor of ESRI's (Redlands, Calif.) GIS software solutions. Dixon says the Guidewire deal will cost EQC US$11.8 million over the 10-year life of the contract.

While call center operators, loss adjusters and others needed to train on the new system -- "There was big effort that went into training from November 2007 to the end of 2008," Dixon relates -- the results have been worth the effort. The ClaimCenter implementation, he says, has helped EQC improve claims resource management.

By integrating the new claims system with its GIS solution, EQC has improved its ability to pinpoint the location of a claimant's property. "We have a database for all the residential properties in New Zealand," Dixon says. "When someone registers a claim, their address is matched against the property database, and then the claim is effectively plotted on a map so we know exactly where that person is claiming from. That helps with our allocation of loss adjusters and, when we have a specific [disaster] event, the allocation of resources within that specific event."

The ClaimCenter implementation also has helped EQC better manage its field adjusters. "We can see the workload we've got with each event, manage that workload and respond to where there are bottlenecks," Dixon says. In addition, because ClaimCenter allows those in the field to access the system, EQC is getting claims information more quickly, resulting in faster claims turnaround.

Though EQC has yet to realize dollar savings from the ClaimCenter deployment, the true benefits of the new system may not be known until the EQC is required to respond to a natural disaster, Dixon points out. "We are really event-driven, because we are a disaster organization," he says. "So we get big batches of claims, not an even flow throughout the year. The important thing for us was to able to manage those [batches] and track what's going on with particular events," Dixon says.

Case Study Profile

company: Earthquake Commission of New Zealand (Wellington, New Zealand; US$56 million in annual premium income).
lines of business: Residential disaster insurance.
vendor/technology: Guidewire's (San Mateo, Calif.) ClaimCenter platform.
challenge: Provide field personnel with access to claims information and integrate claims platform with GIS technology.

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