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Focus on Fundamentals is Key to Insurance Companies
To survive and grow in today's challenging economy, insurance companies will need to successfully employ strategies for "getting back to fundamentals," Oracle Insurance executive Chuck Johnston notes in a recent articlein National Underwriter Property & Casualty magazine.
In a follow-up interview, the vice president of strategy and alliances for Oracle Insurance added that one of the keys to today’s return to fundamentals is finding additional ways to reduce operating expenses to improve operational efficiencies. And for many insurance firms, an essential first step comes with transforming traditional workflow processes using more sophisticated business process management (BPM) applications.
"In many cases, BPM is the best way to achieve new efficiencies because it can help you reduce ongoing expenses, such as head count, by automating processes for a relatively small capital expenditure," Johnston explains.
BPM offers recession-wary insurers a number of other advantages. First, insurers can use it to create end-to-end business processes that eliminate the "silos" that make it hard for individual departments to interact with each other. Smoother information sharing reduces the time and costs for issuing new policies or amending existing ones. "Expense reductions like that fall immediately to the bottom line," Johnston says.
Second, BPM can make it easier to create underlying integrations among separate systems. For example, with a platform BPM leveraging open source standards like Business Process Execution Language (BPEL) organizations can connect the policy-processing dots in applications that span prospecting for new customers through the selling and processing of insurance policies.
Third, BPM and BPEL allow insurers to orchestrate processes across new and existing systems without the costs and complexities of rewriting existing code. "This integration ability becomes important not only when you install new applications, but also when you're tying together legacy mainframe and client-server systems," Johnston says. "Insurers want to gradually renovate their IT architectures by adding new features to their house as they need them, not by rebuilding the entire house every time a new product or market arises."
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