Document management is complex, due to the high volume of documents insurers generate as well as the need to adapt to new communication vehicles and distribution channels. Insurance companies need to address a number of issues when creating and handling documents.
Insurance companies are faced with a high level of complexity in terms of document management. First of all, companies need to address different issues when creating and handling documents of all sorts (product definition, claims, underwriting, etc.). The high volume of documents is one consideration, but one that doesn't even begin to consider that insurers have to adapt to new necessities in terms of communication vehicles and distribution channels.
The Celent vision for document management starts with internal organization and document compliance. Then we determine why there is a strong business case for moving document and communication out-puts to portals. Finally, we propose an architecture that fits our vision.
The growing complexity and communication channels force insurers to rethink their document management approach. We think there are three principles insurers should pay attention to when reviewing their document management strategy. Among others, internal organization and how document compliance is performed internally require specific attention. We think there is opportunities to adapt the internal structures and procedures in order to gain flexibility without adding to the existing constraints imposed by an efficient control of communications and documents. In addition, to reduce the overall complexity faced by insurers, we think insurers should consider initiatives around consolidation of document management tools and better use of policy holder portals.
Our vision of document management in insurance voluntarily ignores financial constraints. Of course, insurers need to find the optimal trade-off between desired IT and human resources and expected return on investment. Therefore, we recommend them to define detailed priorities in terms of functionality and technology when establishing a short list of document automation systems. In addition, we recommend insurers not to neglect the evolutionary aspects linked to IT tools. Indeed, there are variables that are likely to change faster than expected in this domain:
- IT vendors develop new functionality. With the growing adoption of electronic documents and the willingness of insurers to dematerialize paper documents, document automation system vendors are doing a lot of efforts to develop new features. Investments done in order to develop new functionality allowing for the generation of interactive documents represents a good example of this trend and we think insurers should include questions about the R&D pipeline of vendors when selecting a solution.
- Competition between vendors put prices under pressure. The market of document automation system providers is highly competitive. It has experienced a wave of mergers and acquisitions recently with Oracle acquiring Skywire Software, EMC purchasing DocSciences and Exstream being acquired by HP. Two of these buyers, Oracle and HP, are also active in the insurance core application space. This market dynamics contributes to put prices under pressure and insurance companies need to understand its historical evolution and anticipate the next steps in order to capture the best opportunities.
NICOLAS MICHELLOD is a senior analyst in Celent's insurance practice, a research and consulting firm focused on the application of information technology in the global financial services industry. For the full study, please contact email@example.com.