Case Study Highlight: Enabling One-Day Health Claims Payments at Aflac

Matthew Josefowicz

As we approach the announcement of the Novarica Impact Awards in the fall, we will be highlighting one Impact Award nominee each week on our blog. The Novarica Impact Awards are voted on by over 300 members of the Novarica Insurance Technology Research Council, making them the only purely peer-reviewed awards program in insurance technology.

Many of this year’s impact award nominees share some common characteristics – the use of Agile methodology, a focus on communication, strong executive support, and planning for substantial user training as a key part of unlocking value creation.

This week, we look at an Aflac project to enable one-day health claims payments.

The One Day PaySM initiative was a response to a direct challenge from Aflac’s CEO to create a unique claims payment process. Aflac’s goal was to reduce average claims processing time from four days to one. Over the course of the 12 month project, Aflac used Agile methodology to ensure delivery and quality, which they credited with enabling their speedy delivery and enhancing collaboration between IT and business teams, especially when supported by co-location of IT and other business units. The lessons learned have since been applied to a full restructuring of the IT organization. The project has resulted in 87% of online claims meeting One Day Pay requirements—a year-over-year increase of 43%. Customers submitting claims online reported a satisfaction rate of 91%. The direct deposit capability also reduced the company’s carbon footprint, saving an estimated 16,000lb of paper.

For more detail on this project and more than 30 others, including cases from MetLife, Prudential, The Hartford, and Trustmark, see Novarica’s Best Practices Case Study Compendium 2016.

Common Characteristics of Successful IT Initiatives

Matthew Josefowicz

Our fifth annual Novarica Impact Awards are underway, which recognize impactful IT initiatives executed by insurer CIOs and their teams. More than 30 initiatives qualified for this year’s Impact Awards across data, digital, core systems, and IT best practices. Case study subjects include AIG, CSAA, Everest, Great American, GuideOne, Homesite, Merchants, NORCAL, AFLAC, MetLife, Prudential, The Hartford, Trustmark, Unum, and more. Among the qualifying initiatives, some commonalities emerge that reflect the changing state of IT in the insurance industry.

Executive Support

A consistent factor in successful projects was support from executive leaders. Strong executive support ensured the coordination and communication necessary to execute complex cross-departmental projects. The vision of executive leaders was also important in clearly defining project goals and benefits for all departments within a particular carrier.

Training

A key component of many projects was ensuring that employees received necessary training. In some cases, this was practical: users needed to know how to use a new feature effectively. However, many projects needed to overcome resistance from prevailing corporate culture and reluctance to embrace change.

Effective Communication

In order to overcome internal resistance and ensure cross-departmental coordination, clear communication was essential to many projects. In many cases, demonstrating the benefits of new technology was a key factor in overcoming resistance to change. Many projects also required interfacing between multiple internal carrier departments as well as frequent coordination with external units.

Agile Development

Insurers whose projects used Agile development methodologies realized gains in time to delivery, project costs, transparency, and improved communication between IT and business units. Agile helped many teams manage large projects while staying flexible. In particular, Agile helped kept multi-part projects on schedule, as distinct project components could be completed in parallel. Agile also helped project teams adapt on the fly to changing requirements during the development process.

Voting is currently open to members of the Novarica Insurance Technology Research Council, and winners will be announced in the fall. To learn more about the Research Council, check out http://novarica.com/council.

Related reports:

  • The Impact of Impact Awards

    Frank Petersmark

    My colleagues and I recently had the opportunity to present some of the 2015 Novarica Impact Awards to worthy winners. The goal of the Impact Award is a straightforward but powerful one: recognize those insurance technologists (and their business colleagues) who have made a qualitative and quantitative impact at their company.

    For 2015, just a handful of winners were selected from nearly forty submissions. The winners ran the gamut across the insurance spectrum in terms of size, geography, and business spread. However, they all shared a few things in common:

    • Clear articulation of expected business value
    • Consistent executive sponsorship
    • Consistent and frequent communication during the project, with an emphasis on newer software development methodologies like AGILE
    • Close coordination with vendors
    • Clear use of success metrics

    The common denominator between all these elements was something that has proven difficult for IT groups historically: being collaborative and communicative partners with the business and with any other key stakeholders. Each of the 2015 winners did this exceedingly well, and in the process built an effective and sustainable model for future business technology efforts. That’s important stuff.

    When I had the pleasure or presenting two of these awards recently, both of the award winners I visited spoke more about the impact and value their efforts brought to their respective companies than they did about any particular technologies or solutions.

    FG
    Me presenting an Impact Award to Fidelity and Guarantee Life for launching their e-app

    HCC
    Me presenting an Impact Award to HCC for launching their new product line and portal

    My colleague Chuck Ruzicka recently visited Ameritas to present an award for the company’s use of a project execution framework. There, the drive for business models was also apparent. As CIO Richard Widenbeck said, “Ameritas understands the value of executing projects and making well informed decisions. By creating and maturing this process foundation, we believe we can drive value-based outcomes, align risk and investment levels, and improve execution excellence in a way that creates sustainable advantage. We are thrilled to receive this award.”

    Chuck
    Chuck Ruzicka presenting an Impact Award at Ameritas

    My colleague Robert McIsaac also had a chance to present an award at Tokio Marine North America for their deployment of analytics to improve agent performance management.

    TMAS
    The Tokio Marine Impact Award Presentation

    In all the award-winning organizations that we have visited so far, the emphasis on creating an effective model for all business technology efforts has been clearly evident. This should be the focus of all carriers in 2016. If there’s a project at your company that deserves recognition, there’s still time to submit information for a 2016 Impact Award.

    Novarica Impact Awards Summit Recap

    Matthew Josefowicz

    Our recent Novarica Impact Awards Summit provided a forum for IT leaders to present and discuss their nominated case studies with a broad group of Novarica council members and clients.

    The projects presented ranged from Philadelphia Insurance’s adoption of a legal bill review solution that delivered a multimillion dollar payback to MetLife’s successful transformation of their global trading systems. Panel discussions highlighted the importance of IT’s ability to communicate effectively with other business units in delivering impactful projects, and many cited the adoption of agile as a success factor in their projects. While most of the projects involved working with technology vendors, some focused on the adoption of new practices and frameworks, and others on custom development in both traditional platforms and in the cloud.

    Speakers-Comp

    The panels also presented an opportunity for IT leaders to compare notes on project priorities and strategies, with many attendees noting that their organizations had faced similar challenges and worked toward similar goals. Several presenters and audience members described the importance of securing other executives and end users to act as champions throughout the organization, to speed adoption of new technology and processes.

    One theme that rose to prominence this year was a focus on user experience—not just for customers, but for agents and carrier employees as well. AFBA/5Star Life incorporated the needs and requirements of more than 40 third-party administrator customers when designing a new List-Bill solution. CNA deployed an enhanced agent self-service portal for quoting and issuing endorsements, drastically improving agent experience and satisfaction. And Tokio Marine North America introduced a new analytics system to aggregate customer and agency data, empowering business users with insights into previously-unknown market segments.

    Taken together, these and many other nominees represent a trend towards end-user focus. Insurer CIOs are recognizing that usability of a system by all its stakeholders must be a priority, whether a project involves cutting-edge analytics or core systems replacement. These projects have successfully balanced user needs with business and system requirements—essential for ensuring a project’s positive impact throughout the organization.

    INN_Video_8_14

    All of the nominated case studies are featured in Novarica’s Best Practices Case Study Compendium 2015, which is free to Novarica clients and council members.

    Insurance Networking News was there to cover the keynote and conduct a short video interview on themes of recent impactful projects.

    Project teams from nominated companies received their awards, and had an opportunity to network with each other an the other attendees.

    Nominee-Comp

    Networking Comp

    To learn more about the Impact Awards program, see http://novarica.com/impact2015/

    2015 Novarica Impact Awards Summit

    Matthew Josefowicz

    Novarica’s Impact Awards are the only pure peer-recognition honor for insurer CIOs. Each year, a panel of CIO members (no consultants, no vendors, no analysts) select from dozens of case studies submitted by their peers that highlight IT initiatives that had a real business impact.

    This year’s Impact Awards Summit taking place August 13th at the Westin Grand Central in NYC will give attendees an opportunity to hear directly from most of the nominees through a series of panel discussions. Panels and panelists include:

    Practices and Quick Hit Projects

    • Ameritas Project Execution Framework, Josh Everett, VP IT
    • Trustmark Testing Center of Excellence, Eshwar Pastapur, VP IT
    • Philadelphia Insurance Legal Bill Review, Joanne Curry, Business Relationship Manager

    Expansion Projects

    • Citizens Property Online Marketplace, Steve Bitar, Chief of Consumer and Agent Services
    • CNA Enhanced Agent Portal, Brooke Groulx, Director of Automation Strategy
    • Tokio Marine North America Analytics and Agent Performance Management, Brent Cavan, Manager, Predictive Analytics

    Transformation Projects

    • AFBA/5Star Life List Bill Solution, Birye Abebe, Director of IT
    • HCC New Product Line and Portal, Partha Srinivasa, CIO
    • MetLife Unified Global Trading Platform, Richard Leechchow, Investments IT

    The nominated case studies above appear with more than 20 others in the fifth annual Novarica Best Practices Case Study Compendium, which is available at: www.novarica.com/compendium2015

    Past nominees and winners have included AIG, American Safety, Allstate Financial, Amica, Assurant, Brickstreet Mutual, Capitol, Cincinnati Financial, Encompass Insurance, Erie Insurance, Foresters, Great American, ICW, Legal & General of America, Oregon Mutual, Patriot National, Penn Mutual, PURE Insurance, RLI Insurance, Tokio Marine North America, XL Group, Zurich North America, and others.

    I hope to see you in NYC! For more information about this unique learning and networking opportunity visit: http://novarica.com/impact-awards-summit-2015/ or contact inquiry@novarica.com

    IT and Other Business Units

    Matthew Josefowicz

    “Don’t Align with the Business, Be the Business” has long been a mantra for CIOs seeking to ensure that IT is an integral part of their companies’ business strategies.

    But too many IT professionals still refer to “The Business” as if it were an alien entity, and as if they were not part of it.

    TheBusinessJar

    One of our CIO panelists at the recent Novarica Insurance Technology Research Council Meeting raised this point, and we decided to change our terminology then and there.

    Instead of “IT and Business” we will now use the phrase “IT and Other Business Units.”

    After all, IT is a business unit like any other. It should think of itself that way, and encourage others to think of it that way as well.

    And for anyone who uses legacy terminology? Put a dollar in the jar.

    Novarica Impact Awards 2015

    Matthew Josefowicz


    Today we announced the nominating committee for the 2015 Novarica Research Council Impact Awards.

    This will be our 4th annual celebration of case studies of effective technology initiatives by insurers, as recognized by a peer jury of hundreds of insurer CIO members of the Novarica Insurance Technology Research Council.

    An average of 40 case studies per year are submitted for publication in our annual Case Study Compendium, and the best ones are nominated for awards by our committee of CIOs. Unlike other industry awards, no vendors, journalists, or consultants (including the Novarica team) have a vote in selecting nominees or winners.

    Past nominees and winners include: AIG, American Safety, Allstate Life & Retirement, Amica, Assurant, Brickstreet Mutual, Capitol, Cincinnati Financial, Encompass Insurance, Erie Insurance, Foresters, Great American Insurance Group, ICW, Legal & General of America, Oregon Mutual, Patriot National, Penn Mutual, PURE Insurance, RLI Insurance, Tokio Marine, XL Group, Zurich North America, and others.

    Rules and submission forms are online at http://www.novarica.com/impact2015

    We’re looking forward to hearing about your successes and honoring them next spring! Please contact us at inquiry@novarica.com with any questions.

    ACORD/LOMA Forum 2013: Novarica on Growth, Modernization, and IT Impact

    Matthew Josefowicz

    Chad, Karlyn, and I will be speaking at a number of this year’s ACORD/LOMA Forum, on topics ranging from modernizing your distribution channels to preparing insurers for new technologies and business strategies in 2014. If you’re planning to attend ACORD/LOMA this year, please let us know.

    Our sessions are:


    Tuesday, May 7

    • 2:15-3:30 PM. Creating Market Expansion Capabilities: Capitalizing on New Growth Opportunities (Karlyn Carnahan)

    There has never been a better time for insurers to develop a strategy for capitalizing on new growth opportunities. The marketplace abounds with opportunities for carriers to offer critical products and services to commercial and private businesses. This panel discussion will cover how to get started on setting up your business for successful expansion, outline the benefits of industry partnerships and provide a comprehensive overview of the technology available to successfully expand your business to serve the markets you want to serve.

    • 2:15 PM – 3:30 PM e-Signatures: Implementers Discuss Their Experiences and the Benefits of Adoption (Rob McIsaac)
    Rob McIsaac participates in a panel with Genworth, ESRA, and Warwick on e-Signatures benefits and challenges.

     

    Wednesday, May 8

    • 8:30-9:30 AM. Evolving Your Distribution Channels: Modernization That Matters (Karlyn Carnahan)

    Insurance isn’t purchased the way it was a decade ago. Unfortunately, insurers have maintained static distribution channels with little potential for significant growth. So, how can insurance distribution channels change with the times? For insurers, the evolution of distribution channels is modernization that matters. Attend this session to learn how automation can help distribution channels roll with the punches and improve producer management at the same time.


    • 10:00-11:15 AM. Analyst Panel: What is New in 2013 and What Should We Expect in 2014? (Matthew Josefowicz)

    While many new technologies and business strategies are discussed during the event, is anything really new that is changing the industry? This panel will present point of views from the analysts on what is new this year and how much change is really happening within the industry. Panelists will discuss the major industry changes of 2013, whether insurers are really innovating, and what we can expect in 2014.

    • 1:15-2:15 PM. Core Policy Transformation: Real-World Insurer Stories (Chad Hersh)

    This interactive session brings together technology, consulting and data conversion industry experts to discuss the different strategies insurers are taking to fundamentally improve their business. Hear real-world stories of insurance transformation from the teams that are executing on these projects. Topics will include understanding the compelling business reasons to transform, including product agility, excellent customer service, and reduced cost; and how business context impacts transformation strategy and business value of modern application architecture in a changing insurance value chain.

    • 2:30-3:30 PM. IT Initiatives That Deliver Business Impact (Matthew Josefowicz)

    This panel of insurers presents case studies of real-life IT projects that delivered business impact by adopting new practices, delivering quick hit new capabilities, expanding the capabilities of existing systems, or transforming entire platforms. Learn how these insurance IT leaders worked with their business partners, overcame challenges, and delivered real business impact.

    Novarica Research Council Impact Awards: Nominating Committee Announced

    Matthew Josefowicz

    The deadline for the 2013 Best Practices Case Study Compendium and Impact Awards is at the end of this month, and we’ve already received our first submission! We’re looking forward to many more by the end of the month.

    I’m very pleased to announce the members of the 2013 Novarica Research Council Impact Awards Nominating Committee. These insurer CIOs will review all submissions and select the nominees for vote by the full council of 300+ members.

    The committee members are:

    • Alexander Bockelmann, Fireman’s Fund
    • Don Desiderato, New York Life Investment Management
    • John Heveran, Liberty Mutual
    • Nimesh Mehta, National Life Group
    • Peter Moreau, Amica
    • Murali Natarajan, RLI Corp
    • Tony Paris, Pioneer State Mutual
    • David Shaw, Sammons Group
    • Samir Srivastava, The Hartford
    • Wayne Umland, Glatfelter Insurance Group
    • Richard Wiedenbeck, Ameritas
    • Andy Wood, Wilton Re

    The submission form for the 2013 compendium and awards is online here, and you can download a summary of last year’s report here.

    December New Research Roundup

    Summaries of all reports are available for free downloads on our site. Some of our recent reports include…

    Business and Technology Trends

    • Business and Technology Trends: Commercial Lines. Commercial market pricing is showing a decided recovery, leading commercial lines carriers to invest in core systems replacement, agent portal functionality, and business intelligence and predictive analytics.

    (see full list of Business and Technology Trends Reports at http://www.novarica.com/sectorreports/)

    CIO Surveys, Best Practices, and Case Studies

    • US Insurer IT Budgets and Projects for 2013. Modest budget increases, core PAS replacement projects, business intelligence, agent portal enhancements, and mobile and social media pilots are all on the 2013 priority list for insurer CIOs.
    • Best Practices Case Study Compendium 2012. These case studies, the fruit of the first annual Novarica Research Council Impact Awards, provide a useful set of examples of impactful IT projects. They offer insurer business and IT executives detailed examples across a broad range of diverse industry initiatives.

    Novarica Market Navigators

    Executive Briefs and Checklists

    • Minimizing Project Risk Checklist. Insurers’ core missions are tied to managing risk in a cost effective and predictable manner. This brief illuminates common factors that contribute to IT project failure and offers a checklist to reduce project risk.
    • Insurance IT Transformation Checklist. In order to survive and thrive in the future, CIOs need to facilitate and support business transformation efforts. This report provides a roadmap of things to consider for a transformational program.