IBM announced two new advances in the insurance industry – a solution for improving operational efficiency and a framework for process acceleration – that are designed to help insurance providers lower costs and increase customer satisfaction by handling core processes, such as claims and policy processing, more efficiently. Once implemented insurance companies will be able to automate and optimize their business tasks; allowing employees to focus more attention on customer-facing matters.

IBM’s new Insurance Operations of the Future (IOF) Solution is powered by a service oriented architecture (SOA) built on IBM software. The IOF Solution can automatically recognize inbound work tasks, including those coming from unstructured sources – such as paper mail, voicemail, Email, and the Web – and extract the relevant information, enrich it and then automatically route the work task to an automated process, a clerical process, or a specialist process path.

A key example of this is the bill payment process. While many bills are submitted electronically, high percentages are still received as paper invoices received in the mail room.  The IOF Solution can automatically recognize auto repair bills from the stacks of mail and various documents received in the mail room.  When an auto repair bill is identified, the IOF determines if the invoice can be automatically processed.  If it can, the IOF will execute the steps that a live employee would typically take to process and pay the bill.   If additional action is required to approve the bill or deal with an exception, the IOF will send it to the correct level of employee based on a set of predefined rules and policies.

The foundation of IOF is the new IBM Insurance Process Acceleration (IPA) Framework. The IPA Framework – which includes elements from IBM’s WebSphere, Information Management, Lotus, Rational and Tivoli portfolios – provides the SOA infrastructure required to enable solutions like IOF as well as others that target processes like claims management, policy administration, underwriting, new business processing and self-service inquiry and payment.

Based on open standards, IBM’s framework strategy enables clients to take advantage of their existing capabilities along with new packaged software applications and customized capabilities. IBM’s broad independent software vendor (ISV) ecosystem also enables leading software providers to participate in the framework, giving insurance providers full flexibility in choosing the business applications they need to address specific business processes and challenges. As a result of this new integrated framework, insurance clients will be able to increase business agility and drive innovation through a proven best practices approach.

“Insurance companies are still very dependent on paper documents and other forms of unstructured data to support basic processes such as contact center inquiries, policy processing, claims payments, underwriting and other service requests,” said Mark Lewis, General Manager Global Insurance Industry, IBM. “The IOF Solution allows insurance companies to dramatically cut costs and better respond to the growing needs of customers, agents and regulators while the IPA Framework provides an agile base for future insurance applications and solutions. These advances provide a glimpse of what the future of the insurance industry will look like.”

Many insurance providers are focused on improving communications with their  field agents and building stronger relationships with their customers in order to differentiate themselves and capture market share.  The IBM IOF Solution exploits the IPA Framework which leverages capabilities such as Information on Demand and the Insurance Application Architecture (IAA) providing consumers with better, faster and more personalized service.

Elements of the new IPA Framework have already attracted notice from the insurance industry – garnering two awards during the 2008 ACORD trade show. The WebSphere Business Services Fabric won the Early Adopter Award in the Standards Framework Capability Process Model and the IBM Insurance P & C Content Pack for WebSphere Business Services Fabric won the Innovative Implementation Award for ACORD XML Standards.

“On behalf of ACORD, I want to congratulate IBM on receiving two 2008 ACORD Awards,” said John Kellington, senior vice president, ACORD. “I also want to commend them for their ongoing commitment to the development and implementation of ACORD standards.

The new IPA Framework joins previously announced frameworks for the banking, defense, retail and healthcare sectors. These targeted frameworks have already had an impact in helping clients improve customer efficiency and service.  Clients who have deployed the retail framework have reported that they have cut inventory shrinkage by 20 percent, increased total inventory stock and reduced out-of-stock items by 25 percent.

The new IOF Solution is the first in a series of business solutions based on Composite Business Applications that will provide solutions in areas such as self service websites and portals for agents and consumers.

IBM is the industry’s SOA market leader with more than 6,550 client engagements worldwide.  This leadership is further illustrated by a thriving community of greater than 120,000 architects and developers, more than 134 universities advancing the SOA curriculum, and more than 5,000 Business Partners building SOA skills, solutions, and practices.  As part of its overall industry frameworks strategy, IBM recently announced the expansion of this partner community with the development of a new Industry Solutions partner program. The program allows partners to validate their applications on IBM’s industry-specific frameworks and build industry solution components that target key industry needs and take advantage of IBM’s extensive experience in the insurance industry.

For more information on IBM contact Stephanie Wieczorkowski, stephanie.wieczorkowski@text100.com at Text 100 Public Relations.