Faced with a cycle time of three to four days to process an auto inspection report, Phil Horst, manager of Ohio Casualty Group's (OCG, Fairfield, Ohio, $1.4 billion 2003 net premiums) auto physical damage offices nationwide, knew that something in the process had to change. So, in 2002, he began looking for a solution that would increase process efficiency and reduce report turnaround time.
In the past, the OCG claim associates would telephone or fax one of the 120 field auto appraisers to alert them of the need for an on-site vehicle assessment. The next day, the appraiser would travel to the body shop, inspect and photograph the vehicle, and produce a report, which was then mailed or faxed to the home office.
"We just needed to speed that process up," explains Horst, who believed that such a step would not only reduce costs but significantly improve customer service. Turning to The Mitchell Group, a San Diego-based insurance applications provider with which OCG had worked in the past, OCG and Mitchell initiated development of a real-time wireless network for processing inspection reports.
Built around the eMitchell business line, a suite of Internet-based applications that can dispatch, receive and process claims electronically, OCG developed a solution that reduced report turnaround time to one day.
Now, instead of placing a telephone call or sending a fax, the claims associate fills out an assignment on the Web site and sends it electronically to the appraiser's laptop. When the new assignment is received, a cell phone beep alerts the appraiser of its arrival. From the scene of the estimate, the appraiser is then able to upload pictures and data to the Web site and send them immediately to the claims handler.
Equipped with IBM (Armonk, N.Y.) ThinkPads running Microsoft (Redmond, Wash.) Windows 2000 (containing CDMA data cards for high-speed, broadband wireless access), wireless modems, cell phones and digital cameras, the appraisers are able to respond in real time to new inspection requests. And, according to Horst, sometimes they find themselves at a body shop inspecting one car when they receive a request for a report on another car at the same body shop. "This solution saves so much time," comments Horst.
Time Is Money
To illustrate the amount of time the new solution saves, Horst points to appraisers' handling of photos. In the past, appraisers would take photographs of the vehicle, develop the photos and mail them to the home office. With the eMitchell solution, appraisers attach JPEG files to their electronic report and send them via the wireless modem, all of which can be done when they are still at the body shop.
Files are transmitted via packets to ensure fail-safe delivery. "If a file is sent and there is some problem at a cell site, the file automatically restarts itself," explains Horst.
In addition to saving time, Horst says the eMitchell solution has resulted in cost savings, too. "We measure our savings in terms of cycle time and the amount we can cut out of other soft costs, such as charges for rental cars, towing and storage," explains Horst. In the end, "OCG has realized up to 50 percent savings on those items we have been able to quantify," he adds.
But the most important result of the new application may be the considerable improvement in OCG's customer service index. "Reducing turnaround time for claims means that customers are happier, and we've increased retention rates," says Horst, who estimates that such an increase in customer retention has already translated into a savings of $2 million to $3 million.
As the first company to go live with the eMitchell wireless application, OCG was the first to create ways to train users. Horst explains that there is a "half-day of training to set up all of the systems and then an additional two-hour training session for wireless and transmission issues." Most users, says Horst, have adapted very well to the new application, particularly those who are more technologically savvy.
CASE STUDY CLOSEUP
COMPANY NAME: Ohio Casualty Group (Fairfield, Ohio; $1.4 billion 2003 net premiums).
LINES OF BUSINESS: Commercial and personal P&C.
VENDOR/TECHNOLOGY: The Mitchell Group's (San Diego) eMitchell business applications.
THE CHALLENGE: Reduce cycle time and costs of sending and filing off-site auto inspection reports.