Firing up the paper chase: the world of insurance is built on documents, and a river of paper runs through it. After years of cost-cutting in the soft market, that flood of paper represents one of the few areas that insurers have left to cut costs. That has traditional document-handling vendors, and new entrants, looking at an old problem as a source of new profits

Risk & Insurance, Sept 1, 2005 by Michael Fitzpatrick

While many industries produce hard, metal objects, from automobiles to airplanes, insurers and reinsurers produce paper--a lot of paper. For decades, insurers and reinsurers have looked for ways to cut down on the money they spend printing, handling and distributing paper. Stemming that flood of paper not only offers improved efficiency but also the potential for higher profits.

"We've seen dramatic shifts in the last year or two from an exclusive focus on cost-cutting--trying to get profitable--to where there is now a lot of emphasis (by insurers) on how to grow their business, albeit grow it profitably," says Neil Betteridge, director of marketing for document-handling company InSystems Corp.

"This is driving insurers to get new products to market quickly," he says. "That translates into them taking a much harder look at their document systems in terms of are they a help or a hindrance in bringing out enhanced or new products."

The new willingness to invest in new document-handling systems has newcomers and established vendors jockeying for position in a market that's suddenly heating up. Not surprisingly, this is creating a new mix of players in the market.

"All these companies have looked to broaden their suite of products--they've looked at it and said, 'Why are we only in this particular aspect of the document? Can we handle the document through its full life cycle from start to finish?'" says Neff Weiss, director of insurance products at content-management company Mobius Management Systems Inc.

Document-handling companies such as InSystems, Docucorp International Inc., Document Sciences Corp., Exstream Software Inc. and Group 1 Software Inc. have been seeing competition from content-management firms such as FileNet Corp., Hyland Software Inc., Mobius and Vignette Corp.

In addition, bigger technology players such as Adobe Systems Inc. and Hewlett-Packard Co. also have come into the market, although from a different perspective that more often has them striking partnerships with smaller niche firms.

"There's a slew of vendors in this space, and each one does certain things really well. Some are working very closely in partnership. Others are trying to address needs in adjacent markets," says Cindy Saccocia, senior analyst at the consulting firm Tower Group.

Adobe, for instance, is seeking to leverage the ubiquity in the business world of its Acrobat Reader software for creating and reading PDF documents, while Hewlett-Packard is relying on its technology prowess,

RELATED ARTICLE: Streamlined workflow spurs growth.

Columbia Insurance Group, which offers commercial, farm and personal lines of coverage through its network of independent insurance agents in 10 states, was growing rapidly and facing increased competition. To help sustain its growth, the Columbia, Mo.-based company sought to streamline and automate its workflow and publishing process.

"We spent almost a year researching what was out there in the marketplace to serve as our backbone," says Dennis Roth, Columbia's vice president of change management. "We had an overall goal that everything had to fit together. We didn't care which vendors or software we used, just so long as we didn't have to enter data more than once."

After months of research, Roth's internal task force selected Docucorp International for its one-source solution for publishing, archiving, imaging and document workflow needs. Docucorp's policy production technology provided Columbia with the ability to create, produce and distribute personalized policy documents.

By automating policy production, Columbia can better manage creation of policies and correspondence as well as enhance customer service. Columbia cut costs for materials, postage and mailing, and shortened its nightly printing cycle by using duplex laser printing and batch mailing. Because Columbia no longer needs to manually sort, fold, staple and stuff policy documents, insured and agent letters are mailed sooner.

All of Columbia's homeowner declarations, bureau and company forms were converted into an electronic format and stored in a document library system. Columbia employees are now able to view policy information from their desks and reprint declarations and invoices on demand to send to claims adjusters and agents. By archiving all policy information, Columbia saves the time previously devoted to maintaining paper files, and finding misfiled documents, and also saves the cost of storing paper files.

Columbia has already realized significant savings. Recently, the insurer needed to mail an additional notice that involved printing more than 50,000 letters for more than 46,000 envelopes, with some recipients receiving more than one letter. With the new automated system, Columbia estimated that it had realized a 98 percent reduction in postage, handling and envelope costs and an overall cost reduction of 71 percent.

"We're now utilizing 5 percent less people than we did when started the project, and I expect that percentage to increase," says Roth. "It's had a big impact. The majority of the labor savings is coming from the Docucorp software, and we expect that to continue as we utilize all the functionality." particularly in the document-printing area, to help companies manage the flow of data and documents on an enterprise level.