Think big: Consistent process management in the insurance industry

Process management is an old hat in the insurance industry — over the course of cost optimization, it had begun to look at the entirety of the operational process from and to the customer as early as the 1980s. Furthermore, the industry started to determine and leverage internal synergy potential. During this time, the typical cross-sectional departments for business operation emerged within insurance companies.

With the emergence of the “service-oriented architecture”(SOA) paradigm at the end of the 1990s and the positioning of SOA platforms by IBM, Oracle, Software AG, PegaSystems and the like, the first standard software offerings for insurance core systems in portfolio management as alternatives to the host, as well as the accompanying IBM “insurance business of the future” campaign at the beginning of the 2000s, the topic of process management and process efficiency clearly started to make its presence known. In particular, the essential focus was on the “workflow” of documents from the perspective of archive systems, with processing and annotation by processors.

The rising cost pressure resulting from increasing regulatory requirements, which had been caused by a demographic shift of customers and employees, as well as the emergence of InsurTechs, ultimately placed the focus of insurance companies on the consistent structuring and optimization of sales, portfolio, claims and benefits processes.

Processes, Business Rules, KPIs, and Service Integration

The current image of insurance company application landscapes is heterogenous: Often, the core systems for partner, portfolio, claims and payment management are still located on the host. These were already enabled in different aspects for real-time interaction that was integrated through the use of integration or process platforms (e.g., IBM, Camunda or Mulesoft ESB) for apps, portals, BiPRO, and CRM systems.

With many insurance companies, consistent process management viewed from beginning to end (or: from customer-to the customer) is currently either under consideration, in a conceptual preparation or implementation stage, or already implemented and established. As result, a continuous measuring and improvement process with respect to the selection of relevant automating (sub-)processes, increasing the automation quote, and in particular, optimizing the manual processing steps in “light” processing when a benefit period has expired, only occurs among few insurance companies nowadays.

What features are actually required for consistent process management?

  1. A process platform is required that enables the revision-safe creation and adjustment of processes, their execution and scaling to the quantity requirements as well as the administration of the process models in the life cycle. For this, the “business process management notation” (BPMN) is the most widely accepted standard.
    Within the insurance company, one needs to consider that standard systems for various domains, such as CRM systems or archive systems, already have such process solutions in accordance with BPMN and ultimately, from an architectural perspective, a decision must be made within the company about these features, in the sense of holistic usage or in co-existence with a central process platform. If this doesn’t occur and several different process solutions are used, this complicates all the evaluations and the entire control.
  2. Business rules are necessary for the processes that the required parameters specify. Here we recommend “decision modelling notation” (DMN) for the standard.
    These rules test the processes’ input parameters, such as for acceptance guidelines and compliance aspects, enrich the process execution with additional information, and control the process execution accordingly. An important aspect of business rules is the decision whether the process can be completely automated (“dark”) or must be overseen by a specialist.
  3. For the involvement of specialists – due to missing information for the process execution, for supervision due to rules or for the processing of complex matters whose complete automation would be inefficient – the inbox and workload control features, as well as that of a process assistant supplemented by a context view, are necessary for the processing. The workload control can in this case be complex rules based on organization, the presence of processors, as well as the competency and experience of the latter. If processing is only possible in the core applications, such as in the contract management, then a direct switch to the respective compartment system should be possible.
  4. For the automated process execution, the core systems features from the domains partners, policy issuance, contract management, claims and benefits management, provision and output management should be made available as services and tied to the process platform.
    Data enrichment for the processing of concerns from the partner and contract context can thus occur, and transactional services for processing and handling customer concerns follow accordingly. This includes managing feedback to the customer in output management and storing the information in the archive.
  5. For constant process improvement and to increase the automation quote, key performance indicators (KPI) must be compiled and made available for the processes and their flow instances. This data extraction and analysis process is very important with regard to process terminations, breaches of the agreed upon service level, and the workload control. In order to classify the indictors within the general context of specialist knowledge, and to enable a comprehensive evaluation, we recommend that you use an oncology-based approach.

With the replacement of the host-based core systems through standard systems with the option of real-time processing, the option of an event-based approach (e.g. through Apache Kafka Platform) emerges. The benefits of this approach are an integrated real-time KPI management as well a direct, native execution and scaling offering by Kafka that is ideal for cloud operating environments.

Learn more about process management in our blog article "Process Management: Input, identifying concerns, and extracting".

Would you like to learn more about increasing your efficiency through state-of-the-art process management? Then get in touch with our expert Carsten Voigtländer, Senior Business Developer at adesso insurance solutions.

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