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Farmers HERO First Notice of Loss Application Improves Service Quality and Efficiency

Leveraging Pegasystems BPM software, Farmers' HERO first-notice-of-loss application links to back-office systems to power sequenced questions for call center reps, resulting in improved call handling and CSR training.

Shohreh Abedi, VP of Claims Applications, Farmers Insurance Group
Shohreh Abedi, VP of Claims Applications, Farmers Insurance Group
Farmers Insurance Group has replaced a complex legacy first-notice-of-loss systems environment with HERO, a proprietary application that provides customer service representatives (CSRs) with an easy-to-use front end. HERO presents information and logically sequenced questions to guide customers through the FNOL process, says Farmers VP of claims applications Shohreh Abedi, who reports that the new Farmers system has resulted in shortened call times, higher service scores, greater call center ramp up ability during catastrophes and reduced training costs.

HERO is part of a larger business and technology architectural initiative designed to decouple capabilities within an enterprise services-oriented architecture, according Abedi. "We wanted centralized capabilities and to be able to rapidly leverage them rather than face multiple months of development for a single feature that has to touch a complex technology environment," she explains. "The HERO contact center piece puts all claims first notices and status calls on a common platform so that CSRs only have to train on one system, regardless of the back-end claims or policy system."

The HERO initiative kicked off at the end of 2007 and went into pilot in the first quarter of 2009. The application was built using Pegasystems' (Cambridge, Mass.) business process management software and services, with systems integration work from Capgemini (New York), Abedi relates. Rollout for auto and workers' compensation lines was completed in September.

Development Departure

According to Abedi, Los Angeles-based Farmers, a subsidiary of Zurich-based Zurich Financial Services (US$32.4 billion in annual revenue), departed from the typical development model whereby the business side submits requirements and IT reviews those requirements and re-engages the business once having built the solution. "We took a different tack, where the business people represented each of the sections for auto and they spent eight months with IT at our development center in Simi [Calif.]," she says. "Throughout the whole development phase, they could see what they were asking for in the presentation layer, which helped to minimize the surprise at the end. It also enabled them to see whether the options for the CSRs within the GUI were either overboard or where it might need more functionality."

Abedi characterizes the significance of the HERO application as its potential for use across multiple lines of business. "The power of the tool is the scripting logic enabled by the Pegasystems BPM capabilities," she says.

"HERO presents predefined questions in drop-down menus, such that the CSRs don't have to remember what to ask," Abedi explains. "The answers to questions lead to logically dependent subsequent questions and processes. It will present the CSRs with different vendor services, rental car services if appropriate, repair shops, or with total loss activities, if that's appropriate to the way the policyholder answered."

The HERO Pegasystems capabilities are integrated with back-end applications, including both claims and some policy administration systems, through an Oracle (Redwood Shores, Calif.) BEA Aqualogic Service Bus, Abedi relates. "Most of the information is passed through our main [Oracle] Siebel claims system so that the adjusters in the field get everything they need -- all the assignments are passed through and Siebel knows exactly what has been handed to it," she comments. "Basic information is also retained within HERO, so if there is a subsequent status call on a given claim, the CSR can present the current status of the claim. It is a true front layer of the main claims application."

'The Cadillac of Claims Reporting'

Since going live HERO has driven up CSR quality assurance scores in terms of of both efficiency and file quality, as measured by appropriateness of the claim paid, according to Abedi. The application also has driven reductions in overall claims handling times and queue times, enabling more calls to be handled by a representative in a given day. Further, the application facilitates rapid ramp-up in response to catastrophes. "I can easily ramp up to what I need within a couple of hours rather than be stuck in queue for four hours trying to figure out how to put more bodies on the floor to answer calls," Abedi says, adding that HERO also enables CSRs to be trained in a single day rather than over a two-week period, as was necessary with the legacy system.

The application's ease of use, Abedi continues, thus drives both efficiency and CSR morale. She cites an e-mail from a trainee that ends with the following statement: "I cannot say how grateful I am to every single developer, every dollar spent and all the people who travelled for so long to make this remarkable product for us to use. ... This is the Cadillac of claims reporting; it is our future, and it is our HERO!"

Farmers currently is rolling out HERO for auto business related to the carrier's acquisition of 21st Century Insurance, as well as for additional lines of business, including property, specialty and commercial, according to Abedi.

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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