Regional insurers cant always afford the benefits of the latest technology. But a quick ROI allowed Western General Insurance Company, a personal auto carrier in four western states, to improve the speed and efficiency of its claims management with a software solution that integrated with its successful legacy administration systems. In some cases, the carrier was creating two claims forms for each claim, and Joseph C. Smith, assistant vice president information technology for Western General, says it was obvious changes were needed. However, we wanted to make sure our investment in our legacy systems was not lost, Smith says. The problem was how do we get one centralized claims system.
Western General divides its claims into liability and physical damage. If a claim from an accident involved both areas, the company created separate paper files with different adjusters handling separate parts of the claim.
But the company was satisfied with its legacy systems and the enterprise solution from CSC POINT that handled most business functions. We went through three different vendors [looking for a claims solution], but what made us choose Bridium [and its Claims3 product] was the way it would fit over the top of our legacy system, Smith says.
Some claims solutions had capabilities Western General felt it didnt need. We selected [ Claims3] for the management side. We didnt need another financial, statistical claims system, Smith says. Everyone has claims reporting and statistical gathering down pat. Theyve had 20 to 30 years to do that. What you need now is a better management systemworkload and folder tracking.
One initial issue with Claims3, which has since been addressed, was its inability to handle certain document types, most notably PDF files. At the time, the system supported only JPEG and TIFF files. It took them a few months to get that resolved, but now it handles the PDF format. It will also let you store Word documents directly, as well as Microsoft Excel, and auto-loads a reader to open any of those formats automatically, Smith says.
Western General operates on a Windows NT platform with the local fractional T1 access to the Internet provided by the Pacific Bell telephone company. The legacy systems run on an AS/400. What Western General found after using Claims3 was the PCs used by the claims department were not ready for the files they were receiving and the speed of the Internet. It took us some time to get up to speed, he says. Using the Internet in an efficient way and using a product like Claims3 does require certain horsepower on your PC.
Western General found the best way to meet the challenge was to purchase new memory chips for the PCs. While the minimum requirements published by Claims3 were 128 [bits], the memory you really need is more like 256 just to work with the document side efficiently, says Smith. We went out and bought $30 to $60 memory chips for virtually everyone in the claims department, so it wasnt a huge hardware investment. Although 128 bits is the minimum needed, notes Peter Govek, national account executive for Bridium, its not the recommended level.
Western General signed its contract with Bridium in the summer of 2001, but the carrier was in the process of moving to new headquarters in Calabasas, Calif. The move was completed around Thanksgiving, and the installation was then started. It was completed in February. Seventy percent of the implementation work was making sure the interfaces between POINT and Claims3 ran properly, Smith says. He wrote the interface programs himself, but he was quick to credit the Bridium staff, including CTO Ramesh Natarajan, for its help.
Bridium offers three pricing models. A usage model relies on the volume of claims. A licensing model is a traditional up-front fee. The third is a hybrid.
We had an almost immediate return on investment, Smith says. The elimination of the extra files was one improvement, but Western General is more pleased with the upgrade in workflow that allows multiple members of the claims department to work on a file at the same time. Weve cut down on the physical storage of folders, and weve cut down on the amount of paper in that whole department, he says. There was a lot of efficiency gained there. Robert Regis Hyle
CaseFile
The Problem: To implement a claims management system that could work with existing legacy systems.
The Company: Western General
Insurance Co.
LINES: Personal, commercial automobile
Web site: www.westerngeneral.com
Net written premium: $40 million
The Software: Claims3 Bridium
Web site: www.bridium.com
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