All this talk about documents, content, imaging and workflow doesnt take away from the important role documents play in the insurance industry and the need to follow certain requirements. Johnson lists six specific document-related requirements for insurers.

The first is disaster recovery. Not surprisingly, it has been under increased focus for the last 10 months. The loss of paper-only assets can create unacceptable business interruption and potentially shareholder liability risks, Johnson said. Businesses can no longer operate without backup copies of critical business documents and files.

Next comes records retention. Insurers need to have a formal retention program in the event of litigation or regulatory audit. The unmanaged proliferation of business documents has both increased the potential liability of organizations, and decreased access to information across the enterprise, Johnson said.

In order to implement a formal records retention program, first, organizations must determine which records belong in the program and then manage them accordingly. They must also create retention/destruction policies for non-record documents types, such as e-mail messages. She said this allows organizations to optimize infrastructure assets while valuable content is pinpointed, retained, and reused as necessary.

The third requirement involves customer service. All this data doesnt do you much good if you cant use it, particularly in the area of customer service. Insurers of all sizes have a need to access both structured data and unstructured information to process transactions, answer customer inquiries, resolve problems, and develop targeted marketing and sales programs or leads, Johnson said.

The fourth requirement is channel communications. Johnson points out that forms and documents make up a huge portion of channel information flows. Insurers, particularly large ones, are using portal technology to centralize access to critical documents and streamline document-based processes between carrier, agents/brokers, and end customers, she said.

The fifth requirement is compliance. Government regulators, particularly on the federal side, have expressed concern over the security of customer information through HIPAA and the Gramm Leach Bliley Act. Appropriate policies must be in place to ensure that only parties who must or should have access to information do have access, Johnson said. That means managing both paper and digital assets. Having many critical information files on paper only complicates the day-to-day process of managing security and privacy, she added.

Complicating the issue is the Patriot Act with its list-checking and anti-money laundering provisions. Insurers must be much more cognizant of and nimble around handling potentially fraudulent transactions or those having potentially criminal intentions or associations at the time the transactions are occurring, Johnson said. To the extent these transactions are more document-based versus data-based, appropriate filtering and reporting is more complicated to implement.

Finally, there is knowledge management. Johnson feels insurers of all sizes must leverage the intellectual capital of key resources to ensure compliance with internal policies and procedures, leverage business assets to reduce costs, and optimize internal processes. Document management technologies provide both access to key documents and files and control or validation of the version and authenticity of the information being used, Johnson said.

More Robust Than You Think

Many insurers dont fully realize the capabilities of their document management systems, according to Shane Hughes and Eve Allocco, president and project manager, respectively, for Pyxis Consulting (www. pyxis-consulting.com). They may have a robust software package, but they are only using part of it, Hughes said. They need to build upon their investment. One way to do that is with forms processing.

Allocco added, There are a lot of insurers with imaging and workflow in place, but not a lot using forms processing. Thanks to optical character recognition (OCR) and intelligent character recognition (ICR), common insurance forms, such as beneficiary designations, are being read and the data pumped into the back-end system. The data are imaged, indexed, and sent via workflow to the right people, Hughes said.

Character recognition systems can pull off the data with between 80 and 90 percent accuracy, according to Allocco. That relieves a big burden on the staff, which previously had to manually enter data. They can repair and verify the data instead of entering it, she said. Weve seen cost savings of up to 60 percent. You can do the work of 10 people with just two or three. The first step in this area is to make the forms easily readable. The forms need to be able to be read. Businesses need to keep that in mind, Allocco said.

Dealing with hundreds or thousands of independent agents doesnt help the process either. You have thousands of agents sending in paper-based forms, Hughes said. There is a reluctance to move to electronic forms at this point by the producers. The option to submit everything electronically will happen, but it is a slow process. It will continue to be reduced, but only gradually. It will never go to zero (paper), though.

Paper will continue because people are comfortable with a physical document in their hands. Insurers are allowing their agents to issue an application electronically, but you are still going to need a signature on it. It will be a few years before we see a widespread adoption of electronic signatures, Hughes said. Some documents are still needed in paper form by underwriting.

The Next Step

As insurers have lagged behind other industries, they have discovered that the vendors have gone beyond imaging solutions to become business process/enterprise content management solution providers. These vendors appeal to larger companies who deal with tremendous amounts of documents and other content and need to streamline processes, both in the back office and in the front office, Johnson said. These vendors are consolidating core document management and imaging technologies with enhanced workflow, personalization, and cross-platform data integration and consolidation.

Smaller companies face a different set of problems. They have document technologies built around correspondence and document generation, but dont have consolidated business processes around document management. Johnson believes small carriers need to focus on the basics. The first goal is to manage business risk and the second is to manage business resources. Resolving these issues will have the effect of making the universe of unstructured company data smaller, more organized, and more easily accessible to interested parties, she said. If these bases are not covered, the larger issues of process management across borders cannot be easily addressed.

The Little Guys

As for small carriers, Hughes feels they have to examine their individual needs and articulate their ROI before jumping in. There are great benefits to working off imaging, he said. Companies need to examine the volume of their operation and the volume of customer service. It depends on how much money they have to spend and if they have a workforce willing to change, he said.

Mark Tucker, senior business advisor with the Delphi Group (www.delphigroup.com), agreed insurers tend to look at paper as the focal point of their document management program. That is why insurers are trailing similar industries. Its like the weather, Tucker said. Everyone talks about it, but no one does anything about it.

As in most business scenarios, size does matter. The bigger you are, the more money you have to spend for a system, Tucker said. Some companies have multiple document management systems. For medium size companies, adoption rates have not been as high. Some are trying to get immersed in it, but they were concerned with what the Web was going to do to documents. They wanted to develop a Web strategy first. Im still surprised people dont see the connection between the Web and document management. If you are diving into a swimming pool, you need to know whether the water is two feet deep or 20 feet deep, Tucker said.

Its about reducing cost, managing external relationships, and cross-selling products, Johnson said. Large companies have the resources, the IT staff and infrastructure (as well as the business needs) to take on these initiatives. She added that META is looking at vendors who offer enterprise application integration (EAI) or Web services to provide the missing pieces of the puzzle. These companies wont run away and hide from their older solutions, but some insurers have multiple document technologies to maintain. Johnson said ECM vendors such as FileNET and Documentum are addressing this issue with the necessary components.

Thanks to the Internet, the challenge of integrating a document management system is much simpler. How difficult or easy it is to deal with the documents is based on the extent that you are Web-enabled, Tucker said. When you look at document management for claims or underwriting, they benefit from looking at the document online, even if its not integrated, but that is the next step.

The Regulators

Hughes said documents and forms fall under the inspection eye of state regulators and the individual state insurance commissions do not make it easy on insurers to implement these technologies. Its not so much that the states deny the companies, but each state has different needs, he said. Regulators have slowed the adoption rate.

Tucker agrees. Youve got a highly regulated environment with 50 different bosses, he said. It is difficult to standardize a solution. That leads to a hesitancy among IT departments. They want one type of system and that mindset is difficult to overcome. You have to teach the IT people what can be done with a document. Show them the different ways that a document can be relevant throughout its life cycle, he said.

How Secure is It?

Insurers have to address several security issues. You need a document retention strategy, Hughes said. Knowing how long each document should be retained is important, as is storing the document in a long-lasting form. Some disc forms can be stored for 30 years or more, but life insurers know full well that documents have to last longer than that. Many times, legal actions will dictate a companys retention strategy, Hughes said.

Tucker brought up a personal example. A life policy was purchased for his father at the age of 13. Tuckers father lived until the age of 84. There was no electronic version of that policy, he said. I was able to produce the original document when he died, but otherwise I would have had to go through the lost policy process.

Another area of document retention involves e-mail. Johnson said she receives 200 to 300 e-mail communications a day. Id never get anything done if I didnt delete some of them without reading them, she said. I try to get it down to the core 180 or so. Johnson feels e-mail has pushed the issue over the top. Every organization has to decide what constitutes a record and what to do with them, she said. People dont treat e-mail the same way they treat snail mail, but it has become too broad a business tool to ignore its ramifications. Ninety-five percent of all e-mail is non-essential, she said. The problem is how to get rid of it quickly, not how to keep it.

The good news is that no matter what size company you have, there is something that you can be doing to improve the management of all your content, whether it is paper files or electronic images. The trick is to find the one that works best for you with the tools that will make a difference.

For Those Not There Yet

Document managing has been around for a while, but that doesnt mean every carrier has some type of software solution. The Columbian Financial Group (CFG at www.cfglife.com) has had its system up and running for two years now, and senior project manager/analyst Kathy Willis sees many insurers who are in the same boat CFG was sailing in before it installed a Tower IDM system from Tower Technology (www.towertech.com).

If your company is considering a document management solution, Willis has five recommendations for you.

Your implementation team has to be top notch, she said. They need an in-depth knowledge of the business side and the technology side.

Make sure you deal with a first rate vendor. The working relationship between you and the vendor is important, Willis said. Without it youre dead in the water.

Your companys procedures are also important. You need a breadth and depth of knowledge of your companys procedures, she said.

Start small is another recommendation from Willis. Especially if you have no experience with imaging, she said.

Finally, she said, Stay away from the big bang solution. Many systems have more applications than a company needs or will ever use. You may be paying for them and never use them.

CFG users working with the new system were in for a little culture shock, according to Willis. It looked and felt different, she said. Every bit of information about a policy is all there (on the screen) and it can be a little overwhelming. It surprised me with the resistance we felt, so you need to pay attention to your people. To them its a big deal.

Mark Tucker of the Delphi Group agrees. There are a lot of opportunities for technical impact with document management solutions, but there is also a cultural impact on the user, he said.

Willis describes CFG as a small mutual life insurer. With 400,000 policies, the company was getting buried under a mountain of paper. The bigger problem, though, was workflow. There was no information sharing, files got misplaced, an agent would call in and ask if we received something and if it wasnt on that persons desk it was difficult to find the answer.

Those days are gone now. CFG got a handle on its documents and couldnt be happier with their situation. RRH