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Stakeholders’ LensFour key quality characteristics of businessprocesses in Insurance Services are: Accuracy: Conformance with Client/Stakeholder specifications. Accessibility: Ease of access and communication with internal or external service providers. Responsiveness: Timeframe of contact after request. Timeliness: Product or service delivery within specified timeframes.Accuracy will be the focus of this presentation.
BPM and ACCURACYA standardized model was developed tomeasure accuracy.A process was designed to apply the model in aneffective and efficient way throughout theCorporation.A BPM tool was implemented to automate andmonitor the quality control process.BPM provides: Accuracy data capture ability Workflow management Process metrics (throughput, inventory, variation) Interface with Business Intelligence tool
BPM DATA FLOW Data Data Business available Rules available for for Accuracy Accuracy Control Control Sampling BUSINESS DATA Plans Accuracy Inspection Checklists BPM BPM Rules EngineBusinessIntelligence
RESULTSQuality methods integrated in culture.Accuracy metrics accepted for performanceappraisals.Non conformances decreased 6 fold in 4 years.Quality control provided valuable L&D information.Reduced rework recognized for significant bottomline contribution.Enhanced policy administration capacity.Improved customer satisfaction on ease of doingbusiness.
ACCURACYIn the insurance industry, accuracy has three mainstakeholders: • Customers: insureds require that all parts of the insurance contract accurately reflect what has been agreed upon and that basic information is correctly described. • Brokers or Agents: these require the same as their customers, but they are in addition held liable for any errors and omissions in the contract that could hamper the insured’s benefits. • Insurance Commissioners: regulatory agencies require that the contract and supporting documentation comply with State regulations and company filings.
ACCURACY LEVELS1. Customer Sensitive Level: those aspects of accuracy most visible to the customer and to which he/she would be most sensitive. Insurance examples: correct mailing address, exact coverages, proper forms attached.2. Regulatory Level: those aspects of accuracy that are monitored by state regulators to ensure compliance with filings and regulations. Insurance examples: proper documentation, correct protections, producer appropriately licensed.3. Procedural Level: those aspects of accuracy that are required by the different steps in the process. Insurance examples: clear instructions, precise data capture.
CHECKLISTSAccuracy is of a binary nature (correct/incorrect) relatingmore to attribute data than to variable data, thereforechecklists are one of the better tools to capture this type ofdata.Checklists are composed of questions that should reflect theaccuracy characteristics required by the differentstakeholders.The checklists are developed and agreed-to by all processparticipants, who will be held accountable for the results.Checklists are tailored to the different products/services (i.e.Auto policies, Package policies) and to the Levels required.Checklists should be easy to modify as accuracy attributeschange for the stakeholders or are no longer required.
CHECKLIST REPOSITORYAn electronic repository of all checklists and questionswas implemented.Each question is individually identified in order to trackits results.Questions can be used to tailor specific checklists.Checklist results are also tracked to create a scorecardfor the operator or process subject to the review.
METRICSAbsolute: Reflects ultimate customer/stakeholder satisfaction. Measures whether the product/service being measured (i.e. an insurance policy) is 100% defect free or not. Defect free is defined as having positive responses to all questions in the accuracy checklist.Proportional: Reflects the proportion of total checklist questions having positive responses. Shows the performance of an individual or unit on a set of accuracy characteristics. Provides training level feedback.
TARGET GROUPSDifferent groups are targeted for review depending onthe expected result: Production Staff: accuracy is included in the performance appraisal of most production staff. Their results are rolled up to Unit, Branch and Territory levels. Customers: managers may want results on certain customer groups for marketing or relationship management purposes. States: reviews are made in preparation for Market Conduct Exams. Business Units: in order to achieve behavior modification in a unit that has exhibited sub par accuracy performance.
SAMPLING PLANSA sample of products/services is selected for review.The sample size may vary depending on whetherabsolute or proportional metrics are being used. For absolute, a Binary distribution is used For proportional, a Poisson distribution is usedThe sample size selected is determined by theOperational Characteristic Curve at the appropriateprobability of acceptance for the expected defective rate.Sampling frequency depends on the period underreview; i.e. if a year’s worth of data is wanted, monthlysamples could be appropriate.Sampling plans need to be flexible in order toaccommodate different stakeholders’ needs; i.e. targetedreviews.
APPRAISALPre-issuance: performed prior product/service delivery tocustomer/stakeholder Specially used for recently trained individuals Impacts throughput for items selected for review Requires close workflow monitoring May have material impact on metrics if sample size is large enough Leading accuracy indicatorPost-issuance: performed after product/service deliveryto customer/stakeholder Provides the best view of accuracy of output actually experienced by the customer No throughput or workflow impact Sample can be selected from different points in the database Lagging indicator
QUALITY SPECIALISTSAccuracy appraisals are performed by specializedinspectors called Quality Specialists (QS).QS are sourced from L&D or from the mostexperienced practitioners; experts on existingprocesses and systems.Command peer respect through recognized technicalknowledge.Trained in the appropriate interpretation of thechecklists.Trained in quality control procedures.Are usually specialized in a line of business (i.e. Auto,Property).Are considered a shared resource.
QUALITY SPECIALIST CALIBRATIONCalibration: because of the dynamic nature of accuracycharacteristics, QS need to be calibrated in order toensure appraisal homogeneity. Tagged Reviews: the same review is sent to all QS and the results are then shared looking for best practices. Checklist Training: when new questions are added to the repository, or when their interpretation changes, QS are invited to special training sessions.Specialization: calibration risk mitigation is achieved byhaving Line of Business specialization: fewer personswith deeper knowledge.One Queue: in order to evenly distribute calibration risk,QS are asked to check the next item in the queue,without the possibility selecting specific reviews.QS Metrics: absolute metrics are produced for each QSand compared with other results in order to analyzevariance.
AUTOMATION Question BPM Application Repository (Metastorm) (Oracle dB) (contains checklists,(all questions sampling plans created and and business rules) stored here) Business Intelligence (Cognos) (provides full drill down dynamic and static reports for all metrics)
Business IntelligenceAccuracy improvement is achieved using Shewhart’sPDCA model. A significant amount of data analysis isrequired to isolate those elements that have thegreatest impact on Accuracy.Thus the need for a sophisticated BI platform allowingtwo forms of reporting: Static Reporting: standard KPIs are selected and distributed on a regular basis through the Business Intelligence portal. These reports have full drill down ability. Dynamic Reporting: data cubes are built and used to create statistical analyses (i.e. trends, correlations, distributions…) that provide better insight on cause and effect relationships.
ConclusionBPM is a great tool to ensurecustomer/stakeholder satisfaction, when usedas a standardized method, in an automatedplatform, containing rigorous business rules andsound statistical underpinnings.