AA double digit growth phase put Frederick Mutual Insurance Company ($52 million in total assets) at a crossroads: hire more staff or automate manual processes. Opting for the latter, the Frederick, Md.-based insurer began a long-term IT systems overhaul in 2005. "One significant area we identified was personal property policy renewals, where 100 percent of the tasks were manual," relates David Pitzer, VP and CIO.
Frederick Mutual sought a rules-based method for accomplishing administrative tasks that would also flag potential issues requiring human review. "Our goal was automating 75 to 80 percent of all personal lines renewals with a solution that was hands-off for our three-person IT staff," Pitzer explains. "Additionally, it needed to feed into our ImageRight (Conyers, Ga.) workflow, which we had already deployed as our primary user interface."
By late 2006, Frederick Mutual had rejected in-house development. "Eventually we looked at six different [vendors], and Blue Cod Technologies [Marlborough, Mass.] really stood out," Pitzer relates. "Not only was their Watchdog solution exactly what we wanted, but they also had numerous satisfied users within a hundred miles of us. Plus, Blue Cod's representatives had previously worked for insurance companies, so we didn't have to teach them the business."
After a comprehensive planning phase in March 2007, Blue Cod spent several months integrating Watchdog across Frederick Mutual's Microsoft (Redmond, Wash.) Windows-enabled LAN environment, including AMS (Bothell, Wash.) Phoenix, Exchange, an agent portal, iiX (Insurance Information Exchange) links and numerous preferred-vendor interfaces. "Our team's primary task was creating fields in our database to hold items that were previously kept in notes files or stored in people's heads," says Pitzer. "Then, we moved data into those fields."
Launch went smoothly, and results were spectacular. "Watchdog eliminated manual intervention for 95 percent of our renewals," Pitzer remarks. "When Blue Cod predicted this at the outset, I dismissed it as marketing."
Watchdog's unexpected secondary benefits are nothing short of phenomenal, says Pitzer. "For the five percent of renewals that do require underwriter attention, Watchdog is reducing underwriting research time by 50 to 75 percent," he states. "It goes beyond flagging a suspected issue to locating every possible issue within a policy. Research that previously took hours, or days, now takes less than five minutes."
The dramatic efficiencies led to expanding the solution's scope. "Currently, we're automating commercial lines, which we'll finish in Q2 2009," Pitzer explains. "Then we'll adapt Watchdog for new-policy processing, where we hope to achieve a no, or minimal, touch rate of 70 to 75 percent. Completion target is fall 2009, with new lines added as they are developed going forward."
Of all the technology projects completed thus far, Pitzer credits Watchdog and document imaging as fundamental game-changers. "The combination has moved us light-years ahead," he says. "Despite our growth, our underwriting head count remains the same and we still have plenty of capacity," he says. "We don't even have anything on our wish list for Watchdog, and that's rare. The solution has really increased our quality, improved our response time and lifted our entire business."
Case Study Profilecompany
Frederick Mutual Insurance Company (Frederick, Md.; $52 million in total assets).
lines of business
Property and casualty: personal and commercial.
Blue Cod Technologies' (Marlborough, Mass.) Watchdog.
Streamline and automate manual policy renewal processes.
Anne Rawland Gabriel is a technology writer and marketing communications consultant based in the Minneapolis/St. Paul metro area. Among other projects, she's a regular contributor to UBM Tech's Bank Systems & Technology, Insurance & Technology and Wall Street & Technology ... View Full Bio