Is business process management (BPM) underappreciated in the insurance industry? The answer is most certainly yes, according to Marek Jakubik, cofounder and managing director of the Insurance Technology Group. “It’s like anything else you and I do in life,” he says. “When we automate something and we repeat it, it has two effects—it becomes easier and more efficient. So, it’s a double win.”
Still, while BPM may not garner a lot of praise, it certainly isn’t neglected. Janelle Hill, research vice president for Gartner, believes just about every carrier in the insurance industry is doing something with business process management. “It’s way beyond just the top tier of insurers,” she says. “It’s much, much deeper.”
Jakubik takes a different view, though, seeing most BPM investments being made by large insurers. Some have gone to the level of adopting stringent programs and procedures, such as Six Sigma. “That’s a very complex and expensive program,” he points out. “It’s only done by the largest insurers.” For smaller companies, Jakubik suggests the interest dissipates proportionally with size. “The smallest carriers have the least of the [process] problems, but they also do the least,” he says. “[Process] is simpler for them because they usually have single channels, and the whole process of communication is much shorter for them. If I had to guess, I would say probably 30 percent in total are doing something about BPM, 30 percent talk or pretend they do, and the rest just don’t pretend—they don’t do anything.”
Mike Sciolé, CIO of the IFG Companies, sees BPM’s value as adding an element of transparency to a carrier’s operations and being able to forward information automatically to the appropriate person based on the metadata that’s involved with that particular piece of information. He feels carriers should monitor that process in order to ascertain hard benefits, but in terms of quantifying the benefits, it depends on what metric is being used.
“When you go out and surf the marketplace, you get some feeling [BPM] adds to the overall business process,” says Sciolé. “Even when a company is going to spend more on IT, [BPM] can make sense from a business perspective—more touches, customer experience, facilitating a process. There are those who don’t see the value and are more comfortable with the paper process or a manual process. It can be difficult to quantify what the actual gain or benefit is going to be by putting it in place. It comes down to it’s a business decision, and that decision is part and parcel to how they want to quantify the benefits to it.”