BPM + CRM Yields Great Results for Insurer

Loraine Lawson

Updated · Mar 26, 2012

Gary Kirkham doesn’t need to wait for a question to start talking about Pegasystems’ work with Farmers Insurance Group. Coming off a session with a potential new client – one of the largest life insurance companies in the world – he readily rattled off a detailed description of Farmers’ recent overhaul of its high-volume call center system used to file automobile claims.

It helps that Kirkham has told this story many times, since the project has won at least six major IT and insurance awards, including Information Management’s 2011 Innovative Solution Award and Celent’s 2011 Model Insurer of the Year. Celent this year honored another Pegasystems project at Prudential Group Insurance Inc.

“Farmers’ philosophy is that people don’t call them to chat,” said Kirkham, Pegasystems’ principal, Insurance Industry Solutions. “They call to report a claim when they have a problem. So for Farmers, the philosophy is to service those claims in the fastest, most professional way that they can.”

The home, auto and life insurance company is the third-largest insurance group in the U.S., a status largely achieved through acquisitions. With each new company came a different claims system. The multiple legacy systems began to hobble the company’s claims process, reducing employee productivity and frustrating customers. With nearly five million inbound and outbound calls annually, the inefficiencies added up quickly.

Farmers needed to simplify. It developed a roadmap that included more than 300 separate initiatives for business and IT. It decided to start by overhauling its HelpPoint Claims Centers, which handles the complicated first notice of loss process for automobile claims. Because customer service associates use the system when customers call to report an accident, it is a critical, high-volume point of contact for customers.

Match Made in Process Heaven

The aim of the project – nicknamed HERO – was to standardize business processes while simplifying the call center interface. After evaluating four solutions, Farmers chose Pegasystems SmartBPM as the front-end of its HERO system. The BPM tool had three key capabilities:

  • Its rules engine could power the processes, directing the customer service rep to ask the right questions and respond appropriately, based on information given by a caller. For instance, “Is the car drivable or not?” triggers a different set of processes for yes than it does for no. A customer may need a tow and a rental, in addition to repairs.
  • The BPM software decouples the processes and functions, allowing Farmer’s to move toward a service-oriented architecture.
  • Pegasystems supports integration with the company’s Seibel CRM-based claims system, making the information part of the case file immediately.

The HERO system uses the BEA AquaLogic Service Bus to integrate legacy vendor services, claims and, in some cases, the coverage engine applications. Information is sent to claims adjusters in the field through Siebel CRM. The data integration flows both ways, giving customer service associates real-time access to claims information.

The BPM tool serves as the front-end for all the acquired claims systems, which meant employees only had to learn one interface. The system notifies the employee of which insurance the caller uses, then directs the call according to that insurance’s business rules and processes.

This makes it easy to balance the 1.5 million calls a year between the company’s four contact centers.

“Pegasystems has a unique architecture that allows it to integrate with every different system that they have,” Kirkham said. “They could do what they needed to do to service the client, while in the back end the Pegasystems gathered the data, ran the process.”

Experts say using BPM solutions to improve customer-facing processes is on the rise. Making customer service representatives more efficient and improving call center resolution rates is one of 10 reasons to combine CRM and BPM, said Kate Leggett, a senior analyst at Forrester Research.

How Teamwork Helped

The successful revamp of HelpPoint isn’t just a case study in technology. The way Farmers’ IT department worked with the business to develop the new system was a key reason for the project’s success. Business analysts defined the requirements and provided tool templates to IT, which in turn translated the templates into designs. The business analysts then reviewed and fine-tuned them.

“The people who examined these applications, they looked at how they were designed,” Kirkham said. “They spent a tremendous amount of time on deciding what the technical architecture should be, how the plumbing should fit together, what systems they needed to get involved, how they needed to be able to integrate all these different systems together and yet build it for change so as new companies were acquired, they could integrate them as easily as before.”

As a result, the company was able to reduce its average time for handling claims by 20 percent. That’s the equivalent of adding 20 percent more staff, at no extra cost, Kirkham pointed out. The new system, with its single intuitive interface, also reduced the training time for new customer service representatives from two weeks to one day.

“The quality scores are better. The customer experience is better,” he said. “It’s all because the customer service representatives are able to focus on the customer needs and not focus on how to operate the system.”

Getting technology out of the way so employees can focus on the customer? That’s an idea that certainly deserves to win awards.

Loraine Lawson is a freelance writer specializing in technology and business issues, including integration, healthcare IT, cloud and Big Data.

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