| Computerworld
May 2, 1988
INSURANCE FIRMS SEEK PAPERLESS OFFICE
Look to scanning devices, expert systems to help increase efficiency
By Kathy Chin Leong
PALM SPRINGS, Calif. -- More than 800 major users flocked to the IBM
Insurance Executive Conference here last week, anxious to make progress
toward the goal of a paperless office.
At the 12th annual meeting of domestic and international MIS directors,
electronic imaging and expert systems took center stage. Compared with
past years, these two technologies now seem to offer relief for the
truckloads of documents plaguing the $4 billion insurance industry.
Skyrocketing medical costs, legislative reforms and increased pressure
to offer new products all add to the job complexities in insurance,
noted David Griffin, vice-president of underwriting at Fireman's Fund
Insurance Co.
Kathy Wilson, IBM's director of insurance industry marketing, added,
"There is already tremendous diversity in insurance. You have life,
property, casualty and health, and if you start breaking this down, you
are hard-pressed to find a similar set of solutions.
Common to insurance companies, however, is the need to decrease
paperwork. Unlike other industries that focus on manufacturing goods,
the product for these firms is the paper document: the insurance
policy.
For that reason, users are hungry for information that would eventually
lead to a paperless office. They see an immediate use for image
scanning devices, which scan insurance policies and case photographs
and diagrams.
"That's why I came here," said one user from Physician Mutual. "It
gets really expensive to store files."
Adding to the excitement was a briefing on IBM's joint-development
image scanning project with United Services Automobile Association,
which will blaze a trail for others to follow. The San Antonio-based
organization has installed IBM workstations in a network of optical
storage devices, image scanners and IBM 370 mainframes. Users at the
company will store mail in optical disks, eventually reducing the need
to save orginal documents.
Another user offered his solution to reduce the paperwork load.
Provident Life & Accident Insurance Co. in Chattanooga, Tenn., has
developed a personal computer software package that enables staff
secretaries to create more accurate documents through the use of
boilerplate features.
Before, the staff was generating reams of wasted paerwork. Since the
software package was added, the cost of generating a letter has dropped
from $2 to 28 cents, said John Germann, vice-president of MIS
applications at Provident.
Leader of the pack
For many years, the insurance sector has been a leader in automation
because of the need for quick turnaround.
In such an industry, getting a policy to the client quickly may mean
the difference between clinching or losing the contract, according to
MIS directors. And if customers fail to receive reimbursement checks
in a timely fashion, they may not sign up for services the following
year.
This is why CNA Insurance Co. in Chicago urged MIS professionals to
adopt expert system software as a means of accelerating the work of
claims adjusters and examiners.
Danielle Barcilon, senior manager of life and health systems at CNA,
said she expects her claims adjusters will be 30% to 40% more
productive with the use of an expert system the company co-developed
with Policy Management Systems Corp. in Columbia, S.C.
CNA is currently testing the expert system package, which operates on
an IBM Token-Ring network. Among other things, the system is expected
to alleviate the hassle for claims adjusters of poring through manuals
to determine whether an accident or medical treatment is covered.
"We want to increase the productivity of our examiners and, at the same
time, make our claims payment consistent," Barcilon said.
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