“There are a lot of ways these carriers are using their content systems,” says Packer. “In the early stages when people were going from paper to document imaging, they relied on the workflow capabilities that came with those systems. There was a rudimentary workflow capability and that took an effort to define those processes and how the workflows should be set up. Now we are seeing more people modernize their core systems and most of the modern core systems include their own workflow capabilities, so when a carrier deploys, say, a new claims system, that system already has workflow capabilities and the carrier ends up tapping into the ECM almost for storage of documents.”

With more and different information being collected each second by insurance carriers and the methods in which that content is being collected also changing rapidly, many insurance carriers are looking closely at their ECM systems and the upgrades that may be needed.

Steve Callahan, practice director at the management consulting firm Robert E. Nolan Co., points to portals, social networking, agency automation, and self-service functions as new ways carriers are employing to collect data as well as the shift away from paper to new forms of electronic data.

“This is forcing insurers to take a new look at the mature technologies like workflow and imaging” that carriers have been using for over a decade, says Callahan. “Those two areas have been around forever, but we are finding more companies taking a step back into the well-proven realm of optimized workflow and are re-doing it in the context of some new technology, new processes, new sources of data, and new kinds of data. They are making an impact.”

When carriers were first introduced to content management, the technology had a great impact in the number of ways data was being used. That number continues to increase and Callahan maintains carriers are now studying how the data gets routed.

“They are revamping a good deal of the traditional technology,” he says. “There's also a geographic dispersion with remote employees. This is causing people to step back and maybe restructure their approach to storage and management of data. As changes come in the industry they are revisiting the infrastructure and looking at different solutions.”

Workflow Rules

Great American Insurance Co. has been using the FileNet ECM solution from IBM as its primary ECM solution for over a decade, according to Karen Elliott, Great American's divisional senior vice president with responsibility for information technology governance, compliance and supporting services. Fortunately for the property & casualty carrier, the solution has evolved to accommodate many of the changes that have taken place in content management over that timeframe, such as text analytics, predictive analytics, and case management.

“Right now our ECM solution is all around workflow and we are considering turning the unstructured data coming through our workflows into structured data so our business intelligence and business analytics tools can take advantage of the content,” says Elliott.

Elliott reports the carrier will look to capture some of the rich metadata from documents entered into the ECM solution.

“At that point it becomes available for the business units to use to make their business decisions as well as to trend and predict,” she says. “We are currently looking at tools to take advantage of [the content] when we ingest documents either through imaging or a file import.”

Glatfelter Insurance Group is an ImageRight customer and when the insurer purchased a book of business last year the purchase included a newer version of the ECM.

“We have both of them so our challenge is to move the much larger business files and get them converted to the newer version [of ImageRight] as well as update the workflows,” says Wayne Umland, executive vice president and CIO, for Glatfelter

Umland explains the challenge isn't so much in the data as it is the workflow. The older Glatfelter workflows are pointing to the records, fields, and documents and how they were defined in the earlier version. Umland believes the company needs to take some time to properly create new workflows to avoid “hiccups for the people in underwriting and claims as we go through it.”

Glatfelter has been steadily moving toward paperless processing in underwriting and claims. The switch was not difficult for underwriting, but Umland describes work on the claims side as “more methodical—a conservative approach.”

Atlantic Casualty Insurance has had automated workflow with some rules-based processing going back to 2002, according to Greg Ricker, senior vice president and CIO of the excess and surplus lines insurer.

“We continue to tweak and refine our workflows and put more business rules and business processes into our rules-based systems,” says Ricker. “If you look at the business model [for E&S], you have the retail agent key-in data, the wholesale agent key-in data, the carrier data, and you may have to send it off to a reinsurer for a facultative piece of business. There is a lot of data being touched and in some cases re-keyed. It's an expensive proposition.”

In recent years, with a declining market from a price perspective, there are policies that may have been written in 2006 for $20,000 that carriers are now writing for $12,000, even though the same amount of work is being done.

Ricker believes the redundancy in the binding authority and brokerage business, the duplication of steps, and data entry has to be eliminated.

“The margins get smaller,” he says. “When people are re-keying information it takes a long time to do a submission and there's no money in that. Wholesalers have stepped up to make the process more efficient because they can't afford it. Retailers feel work is getting pushed down to them, but it's not either of their fault. Everybody has to step up and be more efficient and quit relying on so many steps and processes. It has to be a more efficient and cost effective process.”

From a workflow perspective, Great American uses the ECM solution to evaluate the changing needs of the business.

“We have made significant enhancements to accommodate the business needs,” says Elliott. “We use business needs as our driver and plan to implement additional evolutionary features into our system as needed. We are satisfied with the solution because it has evolved with the technological advances around it, but we continually look to evolve the application.”

Analyzing the Content

Glatfelter brought all of its productivity data into the company's data warehouse. Because workflows are tailored to the different underwriting departments, Umland explains that the insurer is in the process of making those workflows and definitions consistent.

“We decided we are going to take our productivity reports from the data warehouse because we can capture more information,” he says. “We are coupling that with some underwriting information so we if we have a non-renewal we can tie it to the cause of the non-renewal. Did a competitor take the business or did we decide to let it go. Our warehouse is robust. It has all the policy level data, account level data, and premium in there. We can put it all together and come up with a good representation as to what's happening.”

Packer has not seen a lot of interaction between ECM and analytics. He has witnessed more carriers starting to focus on analytics in the data warehouse.

“I see significant effort and progress with data feeding through core systems and into the data warehouse where you can do fairly rich analytics,” says Packer. “I'm not seeing the ECM system as a source for feeds into the data warehouse, but certainly there is some information that comes out of [the ECM systems] that could feed those processes.”

Umland explains there were fewer integration issues with the data, but more on how the workflows were being used and how the users were recording information as they went through the ImageRight workflows.

“One department would say they didn't perform a particular step and by the time we got to the next person [the step] was already included,” says Umland. “We're working to correct that right now. We implemented the reports as they were defined to show the different units why it is important to stick to workflows that make sense. It was almost like a beta for the business units to demonstrate the value of getting things right and getting them clearly defined.”

Atlantic Casualty is not focused on using the analytics within the ECM system, but rather the analytics from the rate-quote-bind and claims systems, according to Ricker.

“We are seeing classes, high hit ratios, what limits are being quoted, what deductibles are being quoted,” he says. “If you have a 33 percent hit ratio on plumbers in one state and 15 percent in another state that borders it, we can start to understand why that is the case and we have the data that backs it up.”

Callahan reports that an insurer he has worked with has conducted text mining research on workers' comp business where they are running tools against the claims files looking for words that would profile risks or exceptions. Their system also is going through images stored in their imaging systems “like they were adjustors going through a file.”

Callahan believes this is a good use of text analytics.

“They are not changing how data is stored, but they are changing the way they are looking at it,” he says. “The industry is very effective with structured data. The biggest challenges with structured data are redundancy and quality, not infrastructure or management. When you look at unstructured data it becomes the volume and indexing that makes it more challenging.”

Callahan also has seen telephone tools work well at creating links to integrate into a carrier's administration systems.

“You have recorded calls on service transactions that have a link to the legacy or new admin system so you can get to the entire experience of that client,” he says.

The extent that carriers are now dealing with unstructured data is overwhelming, points out Callahan.

“If you look at telematics on the p&c side and the flood of data coming in from social media, indexing is the key and that's where I see advances,” he says “The metadata is the key to get to the analytics. If the analytics tools know where to look, they can give you the answer. Knowing where to look is the challenge.”

Cloudy Content

Content management in the cloud remains fairly nascent, according to Packer.

“I work with large carriers so they are dealing with terabytes of storage behind these ECM systems,” he says. “The volume of data they are dealing with makes using the cloud border on impractical. I don't think the network bandwidth is commonplace yet. For smaller carriers it could be a quick way to start with these capabilities and not deal with the storage and disaster recovery requirements.”

Data warehouses from an analytics perspective and ECM systems for storing all these documents and content are each drawing big investments, points out Packer. Slowly, this will move into the direction of cloud computing.

“The resistance I am seeing is carriers are still uncomfortable with the idea,” he says. “Their whole business runs on this content so if their claims files suddenly became unavailable their business could not function. At the moment there is too much anxiety about storing all that content into the cloud.”

Another area of resistance involves regulatory and legal issues, such as control and discovery.

“Those capabilities in the cloud aren't there yet for the requirements large carriers are going to have,” he says. “The cloud is a big part of the future though.”

Ricker hasn't spoken to anyone who has said they are going to pick up and move their policy or claims data to the cloud, but he detects some changes coming on the agency side.

“A cloud solution for them is fantastic,” he says. “For the larger wholesalers and carriers, I don't think you will see the cloud having a huge impact. I know there are companies talking about analytics in the cloud where they will offer a hosted solution and a run-on-sight solution. I think you will see maybe the small mutuals go there because they don't have the expertise or budget to run some of the other business intelligence tools and they don't have dedicated expertise to build the reporting table and structure. Cloud will introduce a whole new world for them that they don't even know about.”

Until recently, Glatfelter had not done anything in the cloud, but now the company recently decided to move a financial implementation into the cloud and have it hosted.

“For an IT shop as small as ours, it takes a lot of database support to do the upgrades, testing, and make sure [systems] work properly as you go from version to version,” says Umland. “We took a step back and decided to do it as a hosted solution in the cloud. We are going to look for a cloud solution for disaster recovery and business continuity to see if it might make sense to do these things in the cloud rather than have virtual servers in another office. The data warehouse has potential there as well.”

Glatfelter initially stayed away from cloud computing because the insurer felt it was more important to be in control of its own destiny with its own servers and its own applications.

“It doesn't make sense to do that for some of these things anymore,” says Umland. “It clearly makes sense to do that for things that differentiate us where we can move quickly and do what we need to do. But for the more generic applications I don't know why they can't be in the cloud as long as whoever is providing the services has good SLAs and you have a good out-clause. That's what we're going to see.”

Great American does have cloud solutions in place, but Elliott explains that at this time the carrier is not considering putting its ECM solution in the cloud.

“That's not to say we wouldn't at some point, but not yet,” she says. “There potentially could be savings in the area, particularly with the cost of the infrastructure.”

With so much data coming in, Callahan believes storage remains an issue, although he sees some leading-edge carriers moving in the direction of the cloud, although most carriers are more cautious because of security concerns.

“Whenever customer data is leaked it certainly sends trepidations through the insurance industry,” he says. “Given that most data centers are not proximate to where the operations are, you are operating in the cloud, although it's a walled-off cloud. I'm not seeing a major rush to put all the data out there in a cloud. When I look at cloud I think of timeshares. If I run a variable product off someone's data center, you are effectively running that business in the cloud. It's not necessarily a new concept; it's just being presented differently.”

Unstructured Future

One of the key areas to focus on is unstructured data, which to many people means audio and video files and photographs, but Callahan points out that some text files also are unstructured and if insurers cut up the unstructured data pie, text data is the largest portion of the pie followed by images—accident pictures, inspection pictures of a house—and then audio files, such as recorded reports for claims investigations.

“Companies are trying figure out how to get into the data in an automated manner,” he says. “Some text analytics tools are doing mining through actual unstructured images of data and are getting out meaningful information.”

Unstructured data is the latest challenge for managing content and Packer finds the advantage for loading video and photographs into the ECM system—particularly for claims—is the ability to index the content. Indexing connects that data to a specific claims file.

“Carriers not only bring the content into the system, but attach it logically to a claims or underwriting file, an application or someplace where they can retrieve it,” he said. “As the source of those videos become easier to manage we will see this more and more.”

Big data has brought more complications to insurers, according to Ricker, but he believes carriers still have a long way to go with their structured data.

“What everyone is working on now is the analytics that they are getting out of their online rating systems. Things like hit ratios, loss ratios, if business is being declined, why is business being submitted,” he says. “I don't see people wrapping their arms around the video and pictures that come with that.”

Ricker does see more carriers using mapping technologies. For example, if their guidelines are within 10 miles of the coast there may be a five percent wind deductible or there may only be replacement-cost coverage for roofs if the roofs are under 10 years old.

“You see people using mapping tools to determine distance to coast, but they are not diving in to get the applications and photographs,” he says. “We're just not there yet.”

Coming Up

People that Ricker has spoken with believe the hard market is coming, but he doesn't believe it will be what the industry has typically experienced in the past with other hard markets.

“Instead of companies making broad changes where the loss ratios are good and they are satisfied with hit ratios, they are not necessarily going to make broad changes, but they will go into specific areas that are problematic and make change,” he says. “If tree trimming is not a good risk in Arkansas but it is in Tennessee, we'll make the changes in Arkansas where it is needed, but not necessarily make changes in other places. We really view analytics as the next game-changer in this industry because you can hone in on the areas that are profitable and you can better understand why there are areas that are not profitable”.

Modern core systems have their own document management capabilities and workflows, explains Packer. Through web services, carriers will call out to the ECM systems to restore, retrieve, and search through documents. They are not necessarily interacting with the ECM solution, but the new core system as the front end.

“There are different approaches being taken and the effort going forward and finding how these systems work together and how the workflows work together is proving to be a big job for carriers,” says Packer.