Getting their feet webbed: for the past 18 months, Lexington has been automating policy administration in the underwriting process, and as many as nine products are distributed over the Web. The most complex transactions, however, are still paper-based

Risk & Insurance, Jan, 2005 by Tom Starner

In this case, Fireman's Fund Insurance Co., the Novato, Calif., property-and-casualty carrier, wanted to cut the costs of policy administration-related paper flow. At the same time, it wanted to make it easier for its 2,000 agents.

Doug Ackerman, Fireman's Fund's lead systems engineer, says the critical step was instantaneously converting IBM's AFP print language to Adobe's PDF format, enabling agents to view policy forms and endorsements online.

"This not only reduced the number of steps involved in policy generation and distribution, it made Fireman's Fund a much easier company for agents to do business with, regardless of location," Ackerman explains.

"Slashing printing costs was a big driver, but legacy system preservation was also a significant consideration," adds John Glennon, Fireman's Fund Information Technology product manager. "We have older systems integrated within our IT infrastructure and, as a result, we needed to be more responsive to our agents."

To make that change, Fireman's Fund implemented a solution from Xenos, a Toronto-based firm that offers a data and document management software platform.

"Implementing Xenos' d2e was minimally invasive and didn't require drastic customization, whereas other vendors were unable to satisfy our needs without large-scale infrastructure changes," says Ackerman.

"We've also begun to give serious thought to using the technology that delivers finished policies electronically to deliver other insurance products, or even quotes," he says. Today, if an agent and the insured come to Fireman's Fund and say they need a quote, a hard copy document is faxed or mailed, and that delays the process. We are looking at doing quotes using the same application," Ackerman says.

Since implementing Xenos d2e in April 2003, Fireman's Fund has saved more than $640,000 in printing and associated costs, with potential to cut as much as $2.3 million. Currently, more than 2,000 independent agents are using the new system after it was integrated with legacy systems.

"Independent agents are our primary business drivers," Ackerman says. "We recognized that other companies were providing agents with online capabilities and decided we needed to do a better job of arming our agents with the tools critical to their job."

TOM STARNER is a freelance writer based in Philadelphia. He can be reached at riskletters@lrp.com.

A 'Policy' for the Broken-Hearted

We have all heard those wise words, "If it isn't broken, don't fix it!" Equally wise, however, and more likely to be ignored by insurance companies making software decisions is, "If it is broken, fix it; better yet, don't buy it!"

The IT heart of an insurance company is its policy administration system, which allows agents to quote and service business and underwriters to evaluate risk. If your system is broken, the cost of not fixing it can rapidly escalate. If your is system is out of date or doesn't meet your current needs, you can also consider it broken.

If you're wondering if your policy administration system is effectively broken, there are a number of factors to consider: