Data Fuels our Business

By Doug Grant CIP, Principal,

(as published in Alberta Broker, June/July 2003 issue)

Data is the core of your business, and mine. In today’s small and large business alike, data feeds our financial reporting and our payrolls to keep our owners and employees happy. Good customer data help us provide the level of service our customers demand while feeding cross-selling tactics. Marketplace and demographic data, in the form of prospect information, help us replace lost customers and grow the business. And in insurance, data is the heart of the product, for product features and prices are based on historical data – although with recent industry results, the fortune tellers overpowered the actuaries for a while. Everywhere we turn, we are gathering, validating, storing, managing, analysing, using data to help meet objectives. Like any resource, it is not how much data we have, but how we use it that counts.

How quickly technology has evolved. Thirty years ago data capture was a long and arduous process. Transactions were copied out onto coding sheets, which were transported to key punch departments, with the resulting cards moved to the computing glass house before the data was finally captured and stored in electronic format. Today, with the power of the Internet, rooms full of servers communicate among themselves and with others across the country. With the goal of “once-and-done” clearly in the sights of IT and corporate visionaries, a person entering a transaction of a few characters may instantly trigger related transactions in a half dozen organizations – broker, company, prior claims, MVR, credit, bank etc. Each of these will capture data on the way by. This “once-and-done” implementation is at the heart of today’s insurance IT development, for most every aspect of the business.

Insurance Canada’s fifth annual Claims seminar explored how technology is being leveraged in a variety of areas.

In auto insurance, especially when there is an endorsement covering depreciation in the first year or two, totalled auto’s are replaced. Several firms have sprung up to provide cost savings in such situations. Car manufacturers provide a variety of incentives to their dealers and customers. Communications and data technologies enable these data to be gathered and the erstwhile entrepreneur to develop relationships with dealers who will provide new cars with a minimum margin. With such leverage, most local dealers will then respond with equivalent pricing to retain a customer. Viraf Baliwalla, President, AutoMallNetwork, described how they use new technology to internally manage and analyse their transactions and then to share electronically with each particular insurer customer the information about that insurer’s replacements across the country. They use old technology – the personal touch — to develop and nurture relationships with their car dealer suppliers, insurer customers and most importantly, the end insured buyer. That person is the one everyone needs to satisfy, and AutoMallNetwork’s objective is to help that person through the entire experience.

Although directly applicable to Ontario at the moment, the government has mandated a common invoice for health services providers to use when billing insurers for services for BI claims. Collecting data from standard invoices, and related forms, will help achieve the objective of fair and cost effective treatment. IBC and the industry have been working towards the development of an automated billing process that could be adopted easily by providers and insurers. This should improve the efficency of the billing process, and provide an objective and reliable data source for analysis and controls. As one can appreciate, considerations include personal medical information, the high costs of BI claims, diametrically different points of view of the various players, the negotiations and implementation will be challenging.

ClaimsPath from Castek is a claims processing hub which provides the technology infrastructure to enable the people involved in a claim to share a common user interface, workflow and underlying data. Rob Gow, Castek, explained how ClaimsPath brings computer and communications tools to the communications which occur among the participants in a claim. Whether an insurer, or a claims service provider like a body shop or rental firm has a simple or sophisticated internal claims system, ClaimsPath serves to connect the people and systems involved. Each participant has his own view of the data which he is authorised to process and view. An update from a body shop, indicating the delay of completion of a vehicle repair for example, can trigger a number of messages and/or automated transactions – to the adjuster for authorisation to extend the car rental, to the car rental firm to indicate that the car will not be returning etc. It is almost irrelevant that the data underlying these communications can be stored most anywhere – in ClaimsPath or in one or more of the participants’ internal systems.
Matthew Turack, Manager of Special Projects, Kingsway General noted their basic claims systems prior to the implementation of ClaimsPath but the value derived from it has been significant in even a short time. He and Rob noted that:

  • change management through training, setting expectations, and support is the critical part of making this type of communication successful.
  • Adjusters and vendors have different levels of technological expertise and each has unique needs that must be addressed for them to realize the full potential of the system.
  • Experience has shown that acceptance becomes inevitable as the product is implemented and customized to fit the adjusting staff’s needs, reducing duplicate effort and adding efficiency to their daily tasks.

Extending the use of data through extended processes beyond the borders of one organisation is representative of the use of technology in the new Internet age. Matthew indicated that Kingsway’s brokers take the first notice of loss, and that the next phase will be to give them access to the ClaimsPath function to initiate the claim and then have inquiry access afterwards for claims status.

Christine Haeberlin, Vice President, Sales, The Innovation Group, notes that technology can be used to address efficiency. To reap the best rewards however, the focus should also be directed to that of claims effectiveness with close attention being paid to claims leakage, management of the supply chain, control of legal costs, identification of fraud, management of recoveries and injury settlements.

For example, extra time spent upfront handling a claim notification gives more complete information resulting in: better control of the claim process through to resolution, greater rates of re-direction to chosen specialists and hence greater control of the overall cost. The savings made significantly outweigh the costs of the additional time expended. They view upfront capture of the “right” data as a leading practice for claims.

Data is the basis of so much in this insurance business: Contact information and x-dates for prospecting; transit numbers and premium amounts for pre-authorised payments; coverages, deductibles, wordings in setting up a new claim; terms and amounts for commission reconciliation; family member details for employee benefits; contact information for vendors. In the long run, gathering too little or too much data adds cost while managing data successfully – integrity, currency, privacy, security – saves cost. These are just some of the issues. The days when the warts and blemishes in the data could be hidden within a department, or within a business are disappearing. The emerging frontier of Web Services, beyond the CSIO portal for example, with connected businesses and cross-company processes, is already reinforcing the need for solid data. For the successful business stands on a three-legged stool: good people, solid financing and quality data. Treat them all well.

(note: Canada’s leading Insurance Internet Resource Centre provides current information for you at and can help you reach your target audience).