Discovering Challenges

Since most insurance litigation involves claims, the file-oriented nature of the claims process does give an insurer an advantage over other industries in e-discovery. However, opinions vary as to just how well positioned they are.

“Probably eight out of ten insurers don't have their act together,” when it comes to e-discovery, Reynolds claims. “Some have document management strategies that are little more than a glorified file-share system. They haven't put thought into indexing metadata and they have multiple places where content is stored, making it incredibly difficult to locate.”

“Most insurance firms have their business information in fairly good shape, with strong policies typically in place across the organization regarding information management,” counters Alan Pelz-Sharpe, principal analyst and director at research firm The Real Story Group. “Additionally, most insurance discovery requests are related to well-documented processes and information.”

Even so, e-discovery can be an expensive and resource-intensive process, Pelz-Sharpe maintains. “Where e-discovery really gets painful is when your information sources are messy. Finding the smoking gun in 10,000 locked mailboxes is a nightmare. Proving that you have proven yourself innocent is even harder,” he says.

Proliferation is at the root of many problems related to e-discovery. The volume of electronic information has expanded, with some estimates showing unstructured data growing at a rate of 80 percent per year.

“There are digital pictures of damaged vehicles; e-mail that needs to be stored 'somewhere'; voice files that are recorded in the call center.; adjuster notes that are just sitting there,” says Kimberly Harris-Ferrante, vice president and distinguished analyst for Gartner Research. “Now insurers also need to deal with content from the next wave of the Internet and Web 2.0, with instant messaging and chat functionality, and insurers' participation in the social media world.”

Additionally, information in unstructured content continues to pose a challenge for e-discovery because it is “petrified”–locked in unsearchable scanned images. “Despite the fact insurers were one of the first to spend serious money on imaging scan and capture, a fair number of companies don't do intelligent capture, which can be as accurate as or more so than manual entry,” says Pelz-Sharpe. “Technology has moved on, but insurers are stuck with old solutions.”

Users also exacerbate the problem of proliferation through duplication. “For so long we said, 'storage is cheap, so we can store everything,' and users wanted to access all the content on a particular policy in one system,” says Mike Carrier, systems manager at United Fire Group.

The problem is, that truly meant “everything”–images of legacy system screen capture, the same e-mail thread stored by 10 different users, massive color TIFF satellite images that weren't needed beyond the initial underwriting of a policy. Storing all that content in United Fire's ImageRight ECM system caused the content repository to swell. “It has grown exponentially over the last few years,” Carrier says.

The solution to the proliferation problem is a combination of people, process, and technology. “We've had to have meetings with the various users and provide education to get the situation under control,” Carrier says.

Insurers with an eye toward effective e-discovery create processes that govern the life cycle of documents: controlling and providing visibility into changes to electronic documents, establishing guidelines for the retention periods for different types of records, and having plans in place for document storage, archival, and disaster recovery.

And on the technology front, e-discovery solutions have emerged, particularly in the wake of the 2006 FRCP changes, which are targeted at the goal of looking through the electronic content of a company.

These solutions allow insurers to pull information and records from either centralized or federated repositories, perform legal 'holds' to ensure content is not changed, and perform functions such as deduplication to reduce the size of e-discovery files.

“It's search on steroids with a 'holds' facility,” says Pelz-Sharpe.

“What's different about today's e-discovery technology is that, for the first time, you can have a monolithic view across repositories,” Reynolds says. “Systems can connect into structured databases, repositories of content management systems, and file shares.”

E-discovery solutions deal with unstructured content and petrified documents by first crawling index information and creating what Reynolds calls a “thindex” of available metadata.

“Every document has some metadata associated with it, and e-discovery solutions can go through terabytes of index data very quickly,' he says. They will tell you what type of document it is, so you can then decide if it is relevant to examine manually or to process with intelligent capture.” Solutions will typically take a second pass to do a full text crawl of searchable documents, including Word, Excel, and PDF.

“The search engine is the key,” Reynolds says, explaining that the best insurers allow users to do linguistic analyses in their e-discovery. For instance, linguistic searching on “will” can return results relevant to the legal document, rather than those related to other meanings of the word.

E-Discovery Meets ECM

Under the theory that an ounce of prevention is worth a pound of cure, having an ECM strategy in place to control content can avoid a lot of problems in e-discovery.

“A content management system lends itself to the e-discovery process because content is centrally managed with metadata and–hopefully–searchable information. Electronic workflow also reduces duplication because people can view the same piece of content at the same time, rather than recreating it,” Reynolds says. ECM also provides lifecycle control of content, from creation to archival or destruction.

Carrier says Vertafore's ImageRight system has benefitted the insurer's e-discovery efforts by putting all content related to a policy or claim in one place. “ImageRight has a utility that allows us to export the entire file or just certain pages, attach a viewer, and create a CD or email to a law firm that is requesting the information,” he says.

Gleaner Life originally began working with ECM integrator ImageSoft to implement the OnBase ECM platform from Hyland Software to manage an influx of new business paperwork, e-mail and faxes. Since deploying the system, the company has continued to work with both solution providers, and has seen the benefit of OnBase to e-discovery as well.

“Whether it is for claims litigation, commission questions, billing questions, or other purposes, everything is right there to pull out the documents we need,” says Michelle Beal, workflow specialist at Gleaner Life. “The audit capabilities are also valuable. We can tell you who has looked at a document, changed a document, or e-mailed a document. If an auditor wants to see our document controls, we can show that we have [controls] built in and no one has modified or seen the documents they're not supposed to have access to.”

“With OnBase, the discovery process is much easier, and the easier you can make it for the user the less likely you are to miss things,” adds Debra Keller, vice president of IT at Gleaner Life.

More than e-Discovery

While e-discovery has heightened the interest in ECM, it is only one of the factors influencing carriers' decisions to invest in the technology. ECM is “both tactical and strategic,” Harris-Ferrante claims.

“There are a good number of cost-focused insurers who are focused on content management technology as a means to reduce the expense and improve the process around content accessibility,” she says.

Also, companies that currently have a number of department- or application-level content management systems in place are looking to the “enterprise” part of ECM in a focus on system consolidation. “From a tactical standpoint, consolidation provides the opportunity to reduce storage and maintenance costs. From a strategic standpoint, particularly as the industry becomes more highly focused on analytics, smart companies realize it's easier to mine fewer databases and content repositories in order to analyze information, do fraud detection, or perform predictive analytics or targeted customer segmentation,” Harris-Ferrante says.

The OnBase platform is actually Gleaner Life's second foray into content management technology. “We installed a system in the mid-1990s. We found the imaging and COLD components worked fine, but the workflow did not,” says Keller.

The company started with modest goals when it began deploying the OnBase platform to the underwriting area in 2001. “Originally we wanted to take everything that was in a file folder and microfiche and image that. Second, we wanted to shorten the time it took to issue new policies,” Keller says.

By providing an electronic file and automated workflow, Gleaner Life accomplished both goals–reducing the underwriting timeframe from a week to two days on “clean” life insurance applications and from two days to the same day on annuity applications. The time to process applications that needed follow-up also was slashed through a combination of imaging, replacing manual file pulls with automated and electronic workflows, and establishing EDI with labs and service providers.

“Combined with the workflow capabilities of OnBase, follow-ups can be done right away, which allows us to process things faster. We can do more work with fewer people,” says Beal. Integration of OnBase with the insurer's line-of-business administration system also enables policyholder correspondence and issue documentation to be prepopluated with policyholder information. In the new business area,

Gleaner Life has gone from ten to seven staff members due to attrition and did not need to refill the vacant positions.

Over time, Gleaner Life has rolled out the system to claims, customer service, field operations, financial, and executive areas and has achieved a 25 percent reduction in paper across the enterprise. The most recent project, completed early this year, was to automate the check signing process by matching payments to invoices and ensuring that the appropriate executive authorizes payment. Check processing time has been cut in half, and the solution aids compliance efforts by automating the verification of checks for OFAC compliance.

“The solution puts controls in place that were not part of our manual process,” says Keller. The system also puts users in touch with relevant content and aids in the e-discovery process by supporting custom queries, along with standard search capabilities at the document and keyword level.

“Being able to answer a question right then and there because users can easily search for information and have content at their fingertips also has raised our level of service,” Keller says. The next processes to be automated are agent onboarding and contracting.

From everyday business processes to the demands of e-discovery, enterprise search is one of the key benefits of ECM technology. Gleaner Life focuses heavily on taxonomy development as it rolls out the system to additional business units to ensure that documents are correctly indexed and searchable. “Many companies don't understand the importance of the indexing process to being able to locate content later on,” says Beal.

“We work closely with people to make sure we understand the big picture,” she adds. “The more we understand things, the better system we can build for [business users] to get them what they need.”

Likewise, United Fire has been rolling out its ImageRight ECM platform over the better part of a decade. “We began with our commercial underwriting group and have deployed it team-by-team,” says Carrier. “Today, there is no one within the company that doesn't use ImageRight.”

“The system has been a huge timesaver for claims and underwriting staff based on the accessibility of files alone. I can have the same file open as my supervisor. You don't have to have a copy of the file to continue working on it. Mail has been cut down from our agents because people have all the information available on-screen when they are answering calls,” says Sonja Hadenfeldt, imaging specialist, United Fire.

Integration of ImageRight and United Fire's e-mail platform enables attachments, such as photographs, to be automatically imported into content repository.

Web services pull content from ImageRight and populate the insurer's agent Web portal. The company has built out workflows not just around underwriting and claims processes, but also for project management in IT and employee onboarding in human resources.

The most recent workflow, deployed in August, was in loss control. It replaced a manual document handling process with one that automatically attaches electronic loss control documents to policy files along with photographs and routes the file based on the type of document received. Recommendation letters to the policyholder are automatically created and mailed, with letters barcoded so they can be automatically indexed and the underwriting file updated when they are received.

Both United Fire and Gleaner Life have taken a “start small, think big” approach to ECM. That approach can be successful–with the right governance.

“You need to have rules, protocols, and an overall governance structure in place to make sure that if 'enterprise' is your future objective, content management buying decisions do not happen that contradict the enterprise strategy,” says Harris-Ferrante. “Unfortunately, it's easy to have those rogue buying decisions happen because if a plan has my department fourth or fifth in line to move to the ECM system, I might not want to wait.”

The success of thinking big also comes from showing quick wins. “You can use a point solution as a proof of concept. And if it works well, you use those lessons and technology to roll that out elsewhere,” says Pelz-Sharpe.

“We were able to launch the initial workflow and it worked. Once they saw what it was doing, there was buy-in,” says Keller. “The great thing about our solution is that it touches all areas within the company, and everyone can see the benefit of the ECM platform.”

Letting users direct the focus of the system is a key to doing ECM right. “The end users are the ones who know the process best,” Hadenfeldt says. “They're the ones that are going to come up with suggestions. We don't use the system like they do. We're not communicating daily with people outside the company. Users are the ones that discover and uncover capabilities.”

“The buy-in at the executive level has been strong,” says Keller. “They're asking why we hadn't deployed the OnBase system before, and users are coming to us with new requests for the system. They're thinking outside the box about how we can improve our efficiency. Enterprise deployment has always been our key objective.”

The E in ECM

Not all carriers have had the successful experience of Gleaner Life and United Fire in the deployment of an ECM system. Across the industry, many insurers have a problem putting the “E” in ECM, says Harris-Ferrante.

“It's not traditional that companies bought 'enterprise' content management systems because funding was department-level and there was no corporate governance to enforce an enterprise system,” she says. “Additionally, if you peek under the covers of policy and claims systems, they often come with lightweight content management systems, too, with repositories storing content created by those systems,” which leads to platform proliferation.

“There are over 400 document management systems on the market today, and it's common to find multiple systems in place at any particular carrier,” Reynolds reports. “Some companies have more of an ad hoc deployment to content management technology, which creates the same problems of having multiple places where content is stored and multiple copies of the same document. It's hard to know where content is.”

But companies continue a scattershot content management strategy at their own peril. Although creating greater efficiency in the workflow has been the primary goal driving insurers' deployment of true enterprise solutions, e-discovery requirements make it more important than ever that insurers manage electronic information effectively, can locate it quickly, and are able to prove that content provided in the e-discovery process is accurate, complete, and controlled.

“I'm amazed that I can walk into a billion-dollar company and they look like they are in their infancy with the way they are storing information,” Reynolds says. “It is complex process, but you absolutely need a content management program, and you need the right technology. You need to deal with the problem.” TD