Nuclear Insurance A Systematic Approach

When the Nuclear Insurance Association of Canada (NIAC) went looking for a new policy issuance system last year, it knew what it wanted. “We were trying to get automation, efficiency and flexibility all at the same time,” notes Colleen DeMerchant, assistant manager of NIAC. “That’s a lot easier said than done.”

DeMerchant says the association, which is a pool of insurance companies that provides coverage to nuclear facilities in Canada, previously operated on a Microsoft Office system which made use of familiar tools, such as Word and Excel. The system worked fine, but it had its limitations in terms of manual entry (and re-entry), awkward merging of documents from spreadsheets and unwieldy access to information for management reports. “For example, if a member of the association asked about premiums paid over the last one to three years, I would have to go digging for that information,” DeMerchant says. “I would eventually get it, but it was a time-consuming process.”

The types of policies that NIAC issues are typically more complex than standard coverages and they require the need for substantial editing and revisions. The association underwrites on behalf of a group of insurers for nuclear risks that are not insurable under traditional commercial general liability (CGL) and property policies. In many cases, it must include detailed policy declarations as prefaces to its policies. The “ammendents” of policies for individual customers or situations represented another labor-intensive task for the association.

AUTOMATED CYCLE

Ken Clarke, president of software consultants Pictech Inc., says that while NIAC’s multiple spreadsheet and Word-based document environment got the job done, it still represented a sluggish approach to underwriting, policy issuance and policy administration. “For things like collation of data on spreadsheets, information gathering and relational edits, the system was not as efficient as it could be,” he says.

DeMerchant concurs with this assessment. “We wanted to gain efficiencies in policy issuance and other management type reports, such as financial reporting,” she says. “With multiple manual data entry, there is lots of room for error and we wanted to develop a system that would eliminate this.”

For much of last year the NIAC looked at better technology solutions. Instead of reinventing the wheel with a completely different operating system, it wanted to leverage its current investment in Microsoft technology. The association decided on an insurance policy issuance solution created by Pictech that added more powerful technology tools to achieve the goal of straight-through processing. “There is new and robust technology available today that can make it much easier for insurance organizations to underwrite and issue policies and track information,” says Clarke. “We are helping NIAC with a fully scalable solution that will manage and automate the entire policy life cycle, from contact and issuance to billing and reports.”

“We are developing a system where NIAC staff enter data once and there are checks and edits to ensure it is correct,” says Ian De Souza, director of software development at Pictech. “Once the information is entered, the flexibility really opens up in that data can be easily exported to external systems via XML and Internet-type services, giving third-party users usable information.”

SEAMLESS PROCESS

In terms of the actual technology, Pictech uses Visual Studio.NET, a Microsoft development tool, that enables rapid application building for both Windows and Internet applications. It also uses C# (C sharp) object-oriented programming language for building XML-based applications and SQL (Sequel) server data management and analysis software. While these technical names may not mean anything to insurance business professionals, they provide the crucial links that allow for all the data in an insurance policy to be processed seamlessly.

“Microsoft Office, Excel and Word are great tools, but more complex cases such as NIAC usually require some business process management and code to ensure consistency and accuracy,” observes Raj Joshi, an insurance solutions executive at Microsoft Canada. “What we are focusing on in terms of the insurance industry is the ability to go from a customer contact right through underwriting, issuance and even to claims without having to re-touch the contract or re-key data.”

Many insurance companies are looking to migrate legacy applications to Windows and .NET, making use of Internet services and service-oriented architecture (SOA) to lower costs, improve communication across multiple parties and gain better access to vital information. “What PICTECH has built extends the Office tools set,” say Joshi. “Now with .NET and the ability to integrate XML into these scenarios, NIAC can still use the Office tools of Excel and Word to do things like document generation and some of the ‘what-if’ analysis.”

LEVERAGED BENEFITS

This technology approach clearly has broader applications for any insurance company or organization that may not be getting the most out of its operating environment. “All of our customers are running Microsoft platforms and using Microsoft productivity tools, such as MS Office,” says De Souza. “We want to help them leverage those existing tools through our application functions.”

Joshi says Microsoft sees a lot of room for improvement and greater efficiency in the insurance transaction and policy life cycle. “If you can extend the Office tool set and create value around it, there is broad applicability,” he observes. “I also believe it has applicability that can be applied to any scenario where a the customer is talking about dealing with a contractual obligation of this type.”

For DeMerchant, NIAC is just in the early stages of implementing this new technology. As a non-profit association, it underwrites policies on behalf of insurance companies and then distributes premium back to its members. The organization’s main renewal period is the beginning of January, particularly for liability policies. DeMerchant notes that the association will be ready to renew its policies in the upcoming season.