When Things go wrong...

   'Resurrection' is life....Well, hold on!....I am not being philosophical...atleast not at a level that i will start giving you dictums of wisdoms. But i can definitely share with you something that i am absolutely sure all of you must have faced and experienced ( or something similar) somewhere in your personal/professional life.
Somethings things go great and sometimes they don't...that's just life... 
And when they dont, that is when it becomes a cause of concern. Be it a Project worth 1000s or millions of dollars or be it your pefectly planned weekend getaway gone awry.

So professionally, to manage these situations, we have this breed of specimen called 'Project Managers' - whose job is to ensure things stay on track. Project Managers ensure that the project are run and executed smoothly, Projects meet their set goals and objectives and we all achieve and even overachieve our targets.

Examples of Awry
Personal
In our personal lives, say, we buy a house, we start to pay our mortgages diligently and then somewhere down the line, we miss a payment due to something unforeseen - a medical emergency, a job/family situation, mortgage plan changes etc, we start spiraling down the Rabbit hole.

Professional
Imagine a situation when you are on a project that is just not going the way as planned, the reports are all pointing that things have started to go wrong and it is time to raise the red flag....Hopefully you find this, before the Captain asks to abandon ship.
So what do we do when things start spiraling the path it was not meant to be...a Project down on its knees...
A Policy Admin implementation which kicked off with a much held fanfare and furore but suddenly somewhere down the way failed to keep up.
I have been a part of such a project which i will say, is a classic case study for this article. This project was a 3 year - multi Million dollar Enterprise level P&C Admin apps Setup project. It was a new organization entering P&C business that had engaged us for a policy, billing and claims solution setup....Successfully execution would have made the careers of many a people on the project, not to mention the benefits to the client, if it had met the roadmap timelines.
 Initially things went well as planned for a few months then we started missing deadlines, good resources were leaving the project, client was having 2nd thoughts on using us as successful partners. It came to such a point that our consulting Org was threatened with a liability lawsuit, as we had risked the client's plan of going live with its new programs and products in a new market that would have really given them a competitive edge.

How did we come out of this mess.
First Things First
First we calmly took stock of where were on the project
   - We had all our key stakeholders, responsible parties together. Tried to understand and outline how and where things went wrong.
Once we know the 'what' and 'why's, we decide to focus our energies positively, be constructive and stay away from the blame game as it was not going to help anyone....we remained focused and started to work on 'how' to fix the problem.

Come up with a plan to go from point A to point B  
   We had regular meetings with the Stakeholders and finally arrived at a consensus on what needed to be done
In your case, it may include things like,
Timeline changes
 - Extending the project timeline
Scope changes
 - changing the work scope to fit the timeline
Resourcing changes
 - Lining up your A resources to get the job done, shuffling resources per competencies
Cost and budget changes
 - Increase project budget
Unthinkable option
 - Dumping the project altogether. Sadly, this happens in many cases when you are on a time bound project and you completely miss it.

Once you have the plan ready, make sure to dot your Is and cross your Ts. Have an executive summary of your plan ready. This will serve you 2 purposes, you will need it to convince your project sponsors that you are taking the necessary steps to get on track and the funding should continue.
Also this presentation will also help curb the project level noise, if any. You can use the same presentation with maybe a little tweaks for removing your team fears on where the project is going. Proper communication within Team is absolutely essential.
Later on, when things get back on track and project completes successfully(i am sure!...), remember to have a lessons learned session with the whole Team so we learn from our mistakes and future run is a lot smoother.  
One of the major takeaway for our project case was, have regular status reports, meetings set that will highlight slippages right at the onset.
 
Summary
So all in all, as they say...'stuff happens'...It is all about how do we separate the men from the boys and get our act together and make sure all of us march towards the common goal of a successful project implementation.

Let me know if you all agree or have a different perspective, input on things based on your experiences.

Training, Coaching and Mentoring-II - Insurance

Continuing our Topic....Today we will touch upon "Insurance Basics"

Firstly, Who should read this?
If you are a beginner in the Insurance Industry or Insurance related field like IT, Business.
If you are an IT Techie and are working in the Insurance domain for sometime now...this article is for you
If you are someone who has a liking for insurance or are curious about the inner know-hows and basics
or someone who wants to have some valueadd to his knowledge and skills.....go ahead and read

I came to the insurance industry quite by chance. For around 4 years since i graduated i had worked on C++ and Java assignments..all non-Insurance. Then i joined a company which specialized in Property and Casualty Insurance - Policy, Billing and Claims Administration Product development and Installation. I was the solutions architect for the product. I loved what i did there....This job Introduced me to the insurance industry and showed me how product functionality and performance considerations gave us Happy customers...and sometimes poor management and mis-alignment of objectives gives unhapy customers, but let's keep that for another article.....

Coming to Insurance basics,
Why do we need Insurance?
Insurance is a very thriving and an absolutely necessary industry which has borne the shocks of the failing economy. To think of it, be it an bear market or bull, everyone needs insurance, right from buying a home to a car or your personal health and life to insuring smaller electronic gadgets and devices...Insurance is everywhere.

Insurance is a form of risk management and mitigation technique wherein you pay the insurer a "Premium" to accept a portion or all of your associated "risk". And if god forbid, things do go wrong, as they sometimes do, you-The Insured, will file a "claim" and based on the Insurance premium you pay, the "coverages" that you have applicable on your "policy", the insurance company "Adjuster" will work with you and try to work with you on the "Actual Value" or the "Market value" based on the years of "Depreciation" of the Item that you are insured and are claiming for...with the objective of ensuring the "Insured" gets to the "same economic situation" as before. The Objective of Insurance is to cover the loss, so that insured bounces back to the same economic state as before the loss.
This is as elementary as i can get to explain what is insurance to a Layman.

Where did the Insurance concept come from?
Long time ago, when there were to TVs, planes or IPods....when traders and merchants took their goods to faraway places for trading, sometimes they lost the goods to weather conditions, pirates or some other Loss making situations and had to bear a loss. So they came up with rather ingenious ways to "self-Insure" their goods or mitigate their "Risk" or losses.
The Merchants would get together and pool a set amount of money so as to compensate the trader who lost his goods or they would sometimes give extra amount of money to the lenders, from whom they bought goods as a means of insuring against losses in trade.

What are the types of Insurance?
As i said, Insurance is applicable and available in all walks of life...right from Personal to commercial..within that at a very high level, you can dividie insurance into Life, General and Health. Within General you have personal, Commercial. Within that you have Property and Casualty.
The area within Personal and Commercial at a High level would be,
Auto, General Liability, Property, Worker's Comp, Home Owners, Inland Marine, Specialty Lines etc. Each of these, as their names suggest cater to a specific area of Business. There are certain insurance companies that deal with certain specialities or some that do a mix.
There is also another interesting area within Insurance called Re-Insurance wherein, an Insurance Carriers (also called Ceding Company) reinsures part or all of his associated risk with another Company (Reinsurer). The Insurance agreements between them are of various types namely Facultative or Treaty reinsurance etc based on the risk selection criteria etc

What are the industry known and recognized certifications?
Now that you have a basic background and knowledge about insurance, to gain more insight into your particular area of expertise, be it a specific Product like Guidewire, Pega, DuckCreek, Accenture etc related to Policy, Billing and Claims Administration or you aim to become to Business SME for Policy, Billing or Claims...
Make sure you find a right mentor to lead you and guide you in the right direction. Take firm and steady steps towards your career goals and confidently rise the success ladder.

Let me know if you have any specific questions or doubts, i will be glad to help and will try to guide and direct you in the proper direction

Do let me know through your comments if you found the article helpful.

Training, Coaching and Mentoring-I - The Basics

"Practice makes a man perfect"...But before practice comes - getting knowledge (or trained) in your area of choice....
To achieve excellence in any field you need to start with Training and Guidance,...followed by your Hardwork, dedication and gradual experience.
In today's competitive world, nothing comes easy....To gain an entry and make your mark in the favorite field, it has becoming increasingly difficult.

This article is for all those who are trying to enter the IT field or are looking to gain experience in their favorite area of work.

In one of my projects, I had a colleague who was an excellent integration developer and a solutions architect, but somehow he felt his calling was being a business analyst.
Then there were those who were Insurance business domain experts and want to try their hand at Project Management, based on their leadership qualities.

One of my colleagues from India recently got married. His wife was from the IT background back home, but had stopped working for past few years. Now she wanted to restart her career. I sat with them to see where her skillsets and background would fit, so she could contribute her knowledge and grow professionally and personally as well.

I gave them my two cents and that somehow led me thinking to this blog article and maybe a few subsequent few to follow. Bear in mind, i can only write about areas that i am know of.

So coming back, here are the steps i advise to my friends who are planning a change in their area of expertise or planning to gain more exposure to their favorite area of work
Analyze your interests - strengths and weakness
  - Helps you gain insight on what you can do and need to work on. Builds your  focus areas
 
Plan for the area of work
  - Systematically find mentors or someone who can coach you, guide you and point you in the right direction
 
Gain systematic knowledge and exposure
  - Gain knowledge, experience and real time exposure which is key.
 
Confidently march towards your dreams
  - Last but not the least...go get'em tiger....

All the above steps are very important because once you have the requisite knowleldge and exposure, it helps boost your morale and confidence when you go for an interview.
If you are new to the IT Industry or going to enter a specialized Industry like IT for Insurance, it is always to your advantage to have some project background.
In the next few posts i will try to give some guidelines on some specific areas of work like Project Management, Business Analysis, Insurance basics, Packaged solutions for Insurance etc..so keep reading..

Also, please let me know your comments and feedback

Thought process Transformation

They say..If you show a dollar coin to an IT and Business Person both will look at it differently...
Business person will say "I wonder what is today's exchange rate?" and the IT person will say...""hhhmmm, this coin is shaped more like Alpha character "O" (Letter Oh)  rather than numeric Zero"..(Not true...just made it up....but you get my point)....

IT developers and the business folks live and operate in 2 different worlds....unfortunately sometimes it is true...There should be steps taken by both sides to minimize this gap as much as possible...

Why?
A very basic necessity of working in today's world is to understand the business you are in and work towards supporting the business using your technology acumen and skills.
This is true, unless you work in a IT product based environment or somewhere else, where you may be working only to service your internal IT customers e.g. IT Infrastructure in a IT Company etc or you work alone on a marooned island manning a lighthouse switch.
Beyond that you have to work with the business.
This is required because Business is what drives Profits, Revenue and Sustainability to an Organization. Business has drivers like internal and external customers and partners, Competition, Compliance etc that decide and drive business and its exective decisions.

Coming from a Technology background, sometimes it becomes really difficult to think in terms of business, it is very easy to go back to the "Ones" and the "Zeros". During my initial IT Career days, being a consultant you have to wear the hat of an IT Developer cum Business Analyst, it becomes very difficult, to not think in terms of Tables and Columns and integrity data checks, rather in terms of Actors and Use cases, in front of the customer, who maybe as a Claims adjuster, is trying to explain how to send data to a glass vendor from the claim screen and wait for an amount estimate for damage repairs and then has to follow an escalation process so it gets approval if amount for repair was above the assigned claim adjuster's limit.
This really requires a major mindset change, a paradigm shift, if you may... wherein you get away from the developer mindset, where you in your own world do an efficient and scalable High level and low level designs and develop and unit test your own software to a Business person who tries to understand the people who run the business, their process and thinks of ways the technology can help them to make their work easier, better, faster and more efficient and smoother.

How?
The most important way to do this is, "to place yourself in the other person's shoes" and think the way he/she goes about the business day. This will help understand their painpoints and in turn help you to help them.
Certain steps that can be taken to overcome this chasm would be,
1> Get IT and Business aligned...In terms of Corporate Business goals and Objectives.

2> Companies to organize trainings, seminars for IT folk and business alike to make each side of the other side. For instance, hold workshops for business expaining them an IT lifecycle, what is a Functional document, high level designs, Integration, System Testing etc. Similarly for IT Folks, explain them the business processes and not just give them specs and expect the work to be done.

3> Have regular IT/Business meetings, maybe on a monthly/weekly basis where there will be general updates from both sides, Q&A to understand more and better

4> More involvement of IT Developers in Business meetings so they can understand the discussions and business painpoints and start thinking in terms of making those better.

Let me know your comments if you feel there are some points that can be added/modified to help you.

Vendor Procurement and Management

Family man, family problems....My wife and i have been working on finding a Nanny for our 3 year old for past few weeks....Let me say its not an easy task....you have to go through classifieds, talk to your network of friends, interview people for the position, negotiate terms, the whole nine yards...
This activity made me think about writing this article.

Working as an IT Manager, many a times we come across similar scenarios wherein the Client would want to go through a Vendor procurement Process.
For the sake of simplicity, we will refer to the Organization seeking Vendor Services as a "buyer".

Here are a few scenarios from my Insurance world, why a buyer would look for Vendor services,
1> Outsourcing Services
 - An Insurance company say. wants to focus its attention on the Insurance Business and does not want to be sidetracked with IT Issues. So it would naturally want to partner with one or more IT Firms to run its business applications, maintain hardware, do application modifications to maintain and Competitive edge in its business domain.

2> IT Consulting Services
- An Insurance company in business for years and decades would have lots of in-house and Third party applications and services communicating with each other. Thus if the company wants to overhaul and upgrade its infrastructure, hardware or software systems for better and reliable performance and scalability, it has to procure services from Vendors who have handled similar Business Transformation Initiatives.

3> Technology Solutions
- An Insurance Company wants to (say.) move away from its Legacy applications and march towards the latest and greatest state of the art application suite available in the market to better run its business.
 
These are some of the reasons why the procurement manager would want follow proper Vendor Procurement guidelines. Failure to do so, may lead to problems and issues in the whole venture and many a times may lead to scrapping the whole deal either midway or towards the end of the project.
Here are the top 3 reasons why Procurement process may fail,
 1> No clear requirement specifications and hence no clear understanding of the exact scope of work.

 2> Carelessness in terms of contract clauses negotiations. No clear review of Vendor Contract terms and conditions.

 3> Unrealistic targets and deadlines promised and accepted by both parties during the procurement process.

 A Vendor Procurement process just like any project life cycle has 4 distinct phases, They are,
 1> Requirement scope and Elaboration
 - The Buyer has to elaborate on the exact requirements that will be shared with the Vendors and clearly defines why you are seeking the vendor services. These requirements may be Technical, functional etc as the case demands.
There will be a team of Business analysts and Functional experts who will meet the necessary business users to gather the exact requirements and thus prepare the requirements specifications documentation.

 2> Vendor Selection
 - The requirements specifications created are used to prepare an RFI (Request for Information), RFP (Request for Proposal) or RFQ (Request for Quotation) etc as the case may be.
The buyer Organization prepares a selected Vendor list and sends RFIs/RFP to them. The set of vendors must meet a predefined selection criteria set by the buyer organization. These prospective vendors will be someone, who already do similar service for the buyer organization or are in similar business as the work scope demands.

 Before sending out the questionnairre to the Vendor make sure there is a confidentiality Non Disclosure agreement signed, as here the buyer may share some Business sensitive information with the potential vendors. It is necessary to safeguard the business information and Intellectual property from competition.

 After this, if the vendors have some technical questions or need any clarifications, the buyer may arrange for a common Q&A session or they may request the vendor questions via email.The buyer sets a deadline for the questions and queries so they can be reviewed and answered.
 The prospective Vendors have to be aware of the milestone dates and the formal processes like routing the questions through the procurement Manager etc.
 The Procurement Manager is responsible for responding to the questions. The same information should be shared with all vendors, so that no one gets any unfair advantage in this process and in turn will also help the vendors understand the requirements better.

 3> Contracting and Contract Administration
 After receiving responses from the Bidders or Vendors, the buyer has its own selection criteria to finalize the vendor for the job. This is usually based on some weightage program, Vendor rating system, Proposal evaluation technique or expert judgement etc.
 After the vendor selection is complete, then comes the contracting phase. In this phase, the contract agreement (this may also called as the Statement of work, Letter of Intent etc) that is sent by the vendor company has to be carefully read and scrutinized so that both parties agree to the terms and conditions in the contract and it is favorable to both parties. If there is any clarification, ambiguity in any of the points, seek clarification from the Vendor representative immediately.

Contract Administration is a very important phase for successful execution of the Contract. During execution, there may be some changes required to the Project scope, milestone and deadlines approval processes set.

The Contract should also be a project acceptance and completion criteria specified. e.g. For a new Policy System installation and enhancement project, the acceptance criteria specified should be in terms of service or scope delivery timeline (say 12 months) with (say) 2 Critical, 4 Medium and 6 low level bugs open.
 There should be software SLA specified in the contract.

 There should also be processes set for change controls. This includes tools, techniques and activities that help to monitor the change control process and control the project scope and timeline.

 These contracts are generally prepared and reviewed by the legal departments with definite help and inputs from the procurement manager who forms the main coordinator. So make sure the contract is well understood by you - the Procurement Manager. It is detailed and elaborate. The contract has to specify the penalties to be imposed on the vendor in case of missed deadlines like any pricing credits or additional resource guarantee etc
 
 4> Exit and Renewal criteria
 The contract also has to specify the exit criteria for extreme cases like either party wants to exit out. e.g. If the buyer wants to default on a contract, there will be a penalty of (say) $500,000 and 2 months notice period and the entire knowledge base will become the Intellectual property of the Vendor Organization.

 In case the buyer wants to extend the contract with the vendor, the renewal criteria also has to be specified.
e.g. Annual Maintenance contract for supporting Policy and Claims Administration system can be extended with IT vendor 'X' provided the application went live with max 2 open defects and specified timeline. This will have an elaborate pricing, resourcing and timelines specified.
 The service SLA for Annual Maintenance is response in 1 business day and solution within 2 business days for critical issues and 3 business days for regular issues.

Thus Vendor procurement and Contract Management is a very important process for organizations that do business with external vendors. So proper knowledge of the process is an absolute must for both the Buyer and Vendor Organizations.

IT Spend in Insurance

Gone are the times when Insurance companies viewed IT as a mere tool with no direct benefits from its implementation and usage. IT was looked upon as a MIS functionary - i.e. statistical and executive reporting toolbox with no potential and direct cost benefits to the business.
Fastforward to current times, despite the economic downturn all over the world, according to a recent study more than 50% of the insurance organizations are expected to revive their IT budgets.
After all companies that have a surplus balance have to make sure that money is well spent.

There are numerous reasons that leads organizations to improve their IT Infrastructure, Systems and processes

1> IT Industry Business expertise
Looking at the technological advances today, Insurance companies (or any other industry for that matter) have to compete and excel in the business arena.
There are so many IT vendors, application and solution providers who provide a wide range of applications and support that not only ease the way Insurance companies do business but also add to the overall bottomline.
This has only become possible for the IT Vendors becuase of their number of years of consulting and hands on experience in the Insurance domain, understanding and working on the customers business model, closely watching their pain points and business naunces.

2> Enterprise solutioning advantage
IT has become a very important function of Corporate strategy and solutioning, even though IT does not always have a tangible impact on business benefits, be it Policy, Billing or Claims Administration or overall Operations, Customer service, Underwriting, Adjusting, Claims Investigation or Financials like Payments, reserving, Quotations etc. IT is still one of the major functionary that can make a difference for a company to have an edge over its competitors.

3> Cost Benefits
In today's times cost of IT hardware, Software, Infrastructure and resource costs due to Competition, offshoring and Application managed services, hosting solutions and consulting solutions - has really made the entire realm very exciting thus helping your business in all ways possible.

4> Cutting edge Soulutions
With the number of IT solution vendors, service integrators, consultants in the market and the level and maturity of IT solutions based on the number of years of experience input, the solutions are really cutting edge in the sense they address all of end user and customer needs, they are very user centric and friendly and at the same highly customizable and scalable.
For instance a legacy Policy administration system that has been installed and developed 15 years ago compared to a current state of the art Policy administration System solution developed using Java, .NET technology solutions, using web services architecture having plugins, integrations, web service calls to enterprise level authentications, third party integrations like CLUE Reporting, ISO, Glass estimation solutions, Comparative rating engines etc. All of this at a very competitive rate too.
No prizes in guessing which solution wins hands down.

A lot of CIOs and IT senior exectives are now turning their attention to better front end processing and more competive software solutions that can be easily integrated to their current what i call the "Spaghetti IT architecture" and infrastructure and also provide much improved software benefits in the long run.

So what are the areas where companies are spending money on,
1> Data Warehousing applications -
Data warehousing is like the pulse of Insurance business. The data analysis reports indicate the financial health of a business and are indicative of times to come. They also prompt for corrective actions that can be taken by exectuves if and when required.
Data Warehousing spend is on Predictive analytic solutions, Data mining and Business intelligence solutions

2> Business Applications and Solutions
If Data Warehouse is the Pulse of a business then the applications that run the business is the blood and lifeline.
The better, functionally rich, efficient and powerful the applications that help you process your business, the more ease for you to do your business.
Increase spend for better applications and application management that would give companies a competitive edge allowing the Company to shift their focus on more important matters like running their core business competitively rather than worry about IT applications crashes, bugs and poor performances.
This requires increase budgets for more application development resources, better and more powerful infrastructure. More money spent on IT solutions like cutting edge Policy, Billing and Claims solutions, enterprise level CRM solutions which would help improve customer-carrier relationships etc
Another important factor that helps reap better IT benefits are business level process changes to better suit the business needs and aligning the features and functionality supported by a Product software with the business.
For example, i have worked for numerous organizations that would follow the traditional manual triaging and assignment of claims even though the daily average of new and reassigned claims volume was around 200. By making use of application generated diaries and automated assignment triggers, the organizations saved atleast 20% of their processing time due to the automated workflow solutions.

In today's world insurance companies can reduce their operational costs and processing costs using IT methods and in turn achieve better efficient operations and hence more profits.
Let me know if you have any special comments on this or have seen some other aspects that are not covered in this post.

Technology and Claims Fraud

Think of the science fiction movie - 'The Minority Report'. The movie concept is, certain humans with Extra Sensory Perception (called 'precogs'), prophesise about crimes that will be commited in the future and Police detective jump in action to arrest the criminals and thus prevent the future crime.

This is the theme of our post today.

 

A Typical scenario in today's Insurance Organization -

A fraud case is being investigated, an Insured has filed a claim for rear ending other vehicle. But it was detected by the diligent Insurance adjuster that this is a dubious claim.

How did he do this? He made use of software tools and techniques and found a similar trend of the insured's past claims.

 

The savvy adjuster has saved the insurance company possibly thousands of dollars just by detecting 1 fraud case. Think of the big picture - how careful investigation and early fraud prevention and detection techniques can save Insurance companies hundreds of millions of dollars.

Advnatages of early Fraud Detection

Following are the reasons why an insurance organization would detect or prevent fraud cases

 

 1> To reduce overall claims and associated policy costs

2> Guard against future adverse risk selection

3> Optimal and accurate product pricing due to saved costs

4> Pass the profits and revenue saved, to Shareholders and insured (via reduced premiums or dividends)

Insurance Organizations have always been hit by fraud claims and in the current economic scenario, they are trying their best to identify these fraud cases and thereby minimize their losses. Today literally tens of billions of dollars are lost by insurance companies due to fraud claims or due to over inflated claims.

 

Structured and organized Data is something that can help curb or prevent these fraud cases by providing uniform and superior claims information. There are several tools and software available in the market that will allow insurance companies to identify and reduce these fraud cases.

When an insurance company pays for a claim, it involves Indemnity payments and expenses (Legal + Claims Handling + Other). All this is paid on basis of its earned premiums and income from investments.

For e.g. If an Insurance company has an earned premium of $100 and pays out $80, it has a loss ratio of 80%. The rest of the 20% accounts for Administrative expenses, operating costs, profits etc for the Organization.

So logically if an organization eliminates or even reduces these fraud payments and associated expenses like legal costs, investigation costs etc, that would add to the profits of the organization.

 

Tools and resources to achive this
Normally organizations have experienced Underwriters, Adjusters, SIU departments that carefully scrutinize and help to identify and avoid dishonest claims and thereby save company money. They also make use of Third party investigators who specilize in handling and investigating certain types of Fraud cases.

Now these type of cases are not Line of Business specific and thus occur in every line of business (Auto, GL, Property, Workers Comp etc).

 

Fraud Indicators and Claim Ranking

Based on the company experiences + the historical claims data collected + analyzing fraud claims from various third party agencies, Insurance organization can come up with their own Predictive analytics solutions or make use readymade tools available in the marketplace which help analyze the data and come up with scoring models that help reduce the total claims outcome.

e.g. There are few red flags identified on a claim, the predictive analytics tool applies these to the claim and assigns it a claim rank or score.

These claims with a high score are then passed on to an investigator for further inquiry.

 

Red flags examples (but not necessarily fraud cases)

1> Insured uses several different mailboxes for addresses.

 

2> There are multiple claims filed by this insured and there is a specific pattern to the type of claims filed.

3> Insured has medical bills which are overinflated

4> Insured is on a medical disability leave and wins the National Marathon championship

5> Insured has a claim on property much above the actual cost of damage.

6> Insured has filed a theft claim for a high value and secured property like an antique picture.

7>  Multiple Claims for same occurrence filed with different insurers.

ISO ClaimSearch

There are some third party organizations like ISO ClaimsSearch which diligently collect P&C Insurance Claims data of hundreds and millions of Insureds. Insurance companies in turn make use of ISO ClaimSearch for a fee to research prior claims history of their insureds, identify claim trends and pattern. The Insurance companies then, will feed their Insurance data to ISO ClaimSearch so as to strengthen the ISO database.

 

The key to identifying and eliminating fraud is collaborated data - data that is clean, organized and structured. The more structured data that organizations have access to, the more these companies can use their experiences to analyze the data and make some meaningful reports out of this information anfd thus help eliminate fraud. So collecting and analyzing this data becomes the key to investigating this data.

 

How do companies get good and clean data -

• By improving on their claims processes
• Having Data Models that are well structured
• Having strong Business rules and validations in place that identify every entry point into the system
• Technology and process improvements are the key to good and clean data which will help in better analysis

Predictive analytics

Predictive analytics consists of data analysis techniques and methods which help to develop predictive models used for trend forecasting. These tools typically assign a predictive score which is very similar to an individual's credit score obtained from various credit bureaus. The credit bureaus also similarly look at various criteria for a consumer (viz Income, credit history, balances, loan etc) and come up with a credit score for that individual.

 

Process

Data Mining and Analysis

Data is first mined from various data sources within an organization along with the relationships between the data elements. This data is then analyzed with the help of various Predictive models this helps an organization in achieving its fraud curbing objectives.

The data that is obtained is analyzed for identifying trends and relationships which may point to some wrong doing.

 

What can companies do to move towards Predictive analytics?

1> Have consistent and structured data

 

2> Latest tools and technology

3> Budget and preparation throughout organization for implementation and have process changes for clean data entry points

Above post highlights the importance of having organized and structured data. The advantages are manifold, in all domain verticals and not just insurance.

Predictive analytics helps insurance companies identify potential fraud needle claims in all of its millions of claims haystack. In any case, all these are crime preventive and minimizing techniques.

 

Any other points you feel that should have been covered or added here please feel free to comment on those below.

Technical Manager

What is a Technical Manager?
I often see Managers branded as a Technical Manager or a People Manager or a Coordinator or a Business Manager.So what exactly is a Technical Manager?.
A Technical Manager is usually a person who has worked in the Technical Domain and is a master of his skillset, knows his stuff like the back of his hand.
He is a well rounded individual with great Technical prowess as well as Management skills.
Focus of his Job profile includes Technical aspects of Project execution i.e. he acts as a liaison between the business teams and the development, QA and testing groups.
What would a Technical Manager do in a P&C Insurance Policy or Claims System implementation?
The Business Analysts have interacted with business and documented the requirements, now it is the job of the Technical Manager to understand and translate these requirements to proper design documents, Identify risks and mitigation strategies, Test plans, test cases and scenarios with the help of the requirements, development and Testing Teams. He is wholly responsible for the design, execution, control and monitoring phases of the project.
There is also the people aspect i.e. resource management, stakeholder management activities that require strong communication and soft skills. A Technical manager has to have these qualities to translate technical issues and topics to non technical stakeholders and get their buy-ins.
This point needs a mention here as Technical people are known to be less 'people friendly' and are more aligned towards a silo-work or are lone rangers as that, because that is how they must have worked during their pure hands on development days, the Technical Manager role requires you to be someone more than just a Technical expert.

Roles and Responsibilities
So at a very high level the roles and responsibilities of a Technical Manager include,
 - Help identify the correct standards, procedures, tools and techniques to be followed in a project so as to benchmark and track the project progress
 - Help identify the correct resource pool based on their strengths and weaknesses for requirements, development, testing and QA etc
 - Help identify the configuration and change management procedure and ensure adherence to the same.
 - Help in properly guiding teams in requirements, design, development and testing phases.
 - Help identify the risks and issues associated with a project and plans to mitigate or resolve them.
 - Plans for code reviews, testing plans and strategies as per the project standards set
 - Help in System, user, regression testing and post production support activities.
 - Lastly, monitor and control the project financials, so the projects stays ontime and within budget and within scope.

What makes an effective Technical Manager?
To be an effective Technical Manager
1> Strong Technical skills
Make sure you know what you are talking about. Be knowledgable about the Technical aspects of your project.
  - Your Team members will respect you either for your Authority (which will not last long if you do not have the command over your Technical skills) or they will respect you for your 'Skills and Technical' knowledge - make your choice
 
2> Good communicator
Like i said before, your Technical development and Tech guru background will only get you so far. To progress to the next level, go up the career chain, you MUST have this one skill. As a Manager you will have to interact with different folks. e.g.
Stakeholders like the policy underwriters, Claims Representative, Financial executives, operations personnel etc.
Project Teams - Requirements, development, Testing, Infrastructure etc
This communication skill is a definite must because
- Internal development Teams will need to communicate with them about the development topics, milestones, issues faced, propose and discuss resolutions etc
- Stakeholders - To communicate the project risks and status items. To negotiate and get buy-ins on project topics etc

3> Good TeamPlayer
A project is as successful as the Team. So first and foremost, the project Manager has to ensure he has selected an effective team. The team is on mark with their deliverables and development and testing schedules. In case of any issues - personal and professional, you will have to work with the team to iron the issues out. A Project Manager has to be a strong influencer for his Project Team, there has to be a level of trust and understanding between the two.
Technically make sure the team follow the project standards and guidelines. Ensure that there are sufficient rewards and recognition, reviews and appraisals occur throughout the project. Ensure that there are some morale boosting activities like Team building workshops, team gettogethers
All of this is not possible unless the project Team works together.

How to progress your career as a Technical Manager?
Some of you may have got to this position as a part of career growth path or some may have been taken this option as an alternative job path. Whatever the case may be, make sure you perform your job sincerely and effectively.
All of the above points, not only help you be successful in your project, but they will also help you be a better Project Manager in the long run....What do you think? Let me know your thoughts and comments.....

Clean Data - Policy and Claims Systems

This post is a slight deviation from our usual Project Management topics. Many of the projects that i have been are severely haunted by data issues.
Data is the heart and soul of any business. Everyone needs data that is clean, consistent, reliable and secured. Quality and Utility of data improves as and how we add volumes of proper and relevant information.

Insurance carriers like any other industry are often plagued with bad, inconsistent or non reliable data which may have happened due to various factors like application shortcomings, poor system and/or data model design, End user competence levels, user application knowhow etc.

What exactly is Bad data?
Data which is not normalized, inconsistent and thus non reliable is bad data. To give you a simple example, Same information can be represented in multitude of ways e.g. Contacts information stored in the system can be saved based on individual user's preferences.
e.g. Doctor identifier can be stored in system as "Doctor", "Dr", "Dr.", "Doc" etc. So if we need to run a report on all doctors in Systems or if we need to convert this data, we need some logic to handle care this inconsistency.
This is just one example of a potential data issue. There are multitude of other cases that are party to this bad data issue.

Why do we need good data?
Like we said earlier, an application is a bare body skeleton without data. Data is used for various purposes by insurance organizations for e.g.
 - First and foremost Policy, Billing and Claims processing
 - Customer service
 - Internal Organizational and statistical analysis
 - Risk analysis
 - Predictive analytics
 - Reporting to 3rd party agencies
 - State and federal regulatory and compliance reporting
 - Sending data across systems to interchange information e.g ISO, DMV etc

Impacts
Impacts of bad quality data are
1> Coverage Denial
Insureds may be incorrectly denied coverage, if policy number, date of loss, cancellation, reinstatement, renewal, coverage etc data is incorrectly entered or not entered when it should (No Mandatory checks in the System)

2> Incorrect Reporting
Incorrect data may cause claims to be incorrectly reported to 3rd party agencies which may lead to potential issues for the insureds and the carrier alike.

3> Claims Leakage
Claims may get incorrectly paid if policy, claims data is incorrect leading to leakage

4> Operational Efficiency
Severely impacts the organizational efficiency of Intake and operations groups e.g Claims System forces Intake to capture claims story as long winded notes rather than structured data. Consequently when Customer service or executive Management when references this claim file has to read through pages of data to get a gist of the claim or even report some status to the customer.

5> Functional Impacts
Data logic errors, poor system designs and incorrectly written business rules can cause problems for eg today's claims and policy systems use address standardizations or postal address lookups based on the address data entered in the system. If there is no uniformity in the  city, street, zip entered throughout the system, then good luck with doing a proximity search when looking for a company prefered low cost Auto Bodyshop within 5 miles of your home location.

6> Third Party Impacts
There have been cases where an insured's policy was not recognized by DMV and have caused insured problems when he was stopped during a routine traffic check.

7> Statistical Impacts
Internal actuary and management level executives do a business health check and future policy rate predictions to be competitive based on the Loss ratios, premiums, outstanding payments etc. Sometimes incorrect or poorly designed data structure prevent this. This impacts the organizational data quality and process effectiveness.

8> Conversion Issues
When an old application is retired and data is moved to a new and better system, bad data is the worst possible issue that development and business Team have to tackle. In this case, each scenario has to be correctly identified and workaround have to be reached and agreed in order for the data conversion to proceed.

Handling data Issues
All these and other such problems are surely avoidable or can be solved if steps are taken to resolve the issues identified.
The first and foremost thing that has to happen in this case is proper and effective investment in the area of technology, leverage business knowledge and expertise and finally effective data management to reach the end goal.

Usage of the ACORD Data Model
Many of the companies who go for system transformation or remodeling do so because
 - Many who move away from legacy system need to understand the power and importance of good data. For this it is important to have a consistent and a normalized Claims, policy and billing data structure. There is a generic data structure that is proposed by ACORD
It makes more sense to effectively leverage new technology for data interchange, data setup and storage e.g buying a leading top of the market claims system rather than investing in legacy system short term fixes that offer no long term gains, are fairly costly and therefore a bad investment.
Make sure you have your key stakeholders involvement. Their go ahead, business vision and knowhow is extremely important to guarantee success in your project ventures.

Organizational Change Management - Policy and Claims Systems replacement

They say about habits - When you take "H" out of a habit, "a bit" remains,
If then take "A" out, still "bit" remains,
If you then take "B" out, still "it" remains  - habits are hardwired.
If you teach a person to do something a certain way, no matter what are the repercussions, he will continue to do things the old way. I have seen this happen at several of my claims system implementations where people were asked (say), not to follow a long winded process to input claims, rather use the structured application process for this which was quick and easy, but people were hesitant to do that for multiple reasons. This brings us to our topic for today - "Change" and "Change Management".
Insurance Transformation projects (or any large projects for that matter) as such are pretty complex, with lots of factors in play such as - multiple systems to integrate, legacy data dependencies and statutory requirements and restrictions, business and competitive pressures etc. For all the Policy and Claims transformation projects that i have been, there is always and will be a need for change management.
For a multi million dollar project, involving hundreds of people, impacting hundreds even thousands of people in the insurance organizations, you cannot afford to ignore change, you have to make sure this change happens effectively and smoothly throughout the organization.

What is Change Management?
Change management is simply transitioning from current state to future state and addressing the problems that come along the way. The most important aspect in change management in 'Awareness'. This one factor changes the game altogether, An aware and trained organization accepts and adapts to change more easily than one that is not. Change Management is not just user training, but it also requires changing and shaping user attitudes and perceptions towards the change overall. Change Management begins from the time you start your project planning. First you have to identify the correct stakeholders, their roles in the organizations, how they can help shape and translate the change throughout the organization, followed by training needs, pilot roll out, issue resolution etc all goes hand in hand.

There are some factors that should definitely be considered for Change Management.

Perform a Organizational readiness study
Study the overall organizational perception towards the change, are they people open to change?, are they defensive?, subdued? not concerned?, worried? etc. Have a plan to address each of these areas by either one on one sessions or having regular meetings and get togethers to sort doubts. Remember it is very important that you have the buy in from your people on the change and they are not just 'sold' on the change..

Stakeholder study
As i mentioned earlier, after identifying individual stakeholders, perform an individual stakeholder study so as to understand their viewpoints and then produce a focused training material. There should be a detailed issue resolution process spelled out for the pre deployment and post deployment stage.

Develop your own change leaders
Executive and higher Managment cannot reach each and every person in the organization to explain the need to change. The organization has to identify, develop and nurture the right change torch bearers. I say, the 'right ones' because the change champion has to be very clear on what is changing and why. How is it going to benefit the organization in the long run.
These ideas have to be translated to all levels in organization, so that all involved are engaged and are a part of the whole change movement.
If they see any concerns, they should try to address those and if they cannot, bring it out to the top management.

Highlight the organizational directive
It is not enough for you as a project manager to provide your version of the change, but you have to focus on the overall organization objective and group direction. For instance in the Insurance world, organization direction is not to use the old excel sheets method to calcuate the reserve estimates or calculating policy rates, but use the application reserve setup, rating  worksheets etc. Do not use notes to capture the claims history, but use the data fields and elements to create and develop the claim file story.

Visual Training, Support and Learning
Sometimes as i mentioned above, it becomes very important to visually depict a particular paradigm shift (like showing the 200 MPH bullet train to travel from point 'A' to point 'B' rather than using the 70 MPH subway or in my world, using the highly structured and organized new policy and claims administration systems vs the old rigid legacy system with only notepad functionality).

Plan, plan and plan
Each organization has different dynamics at play in terms of different organizational structures, different executive priorities and politics. So this means you need a unique plan for your organization. A plan that is well though of, has bench marking and change tracking templates, regular communication meetings and bulletin board updates scheduled, undergoing a few levels of pilot testings and dry run implementations definitely helps.

Organizations that down play or underestimate the importance of change management, do so just because there is not enough awareness of the Change Management factors or the impending implications if it is not implemented or implemented incorrectly. It is the job of the C Level executives, Project Managers, Business executives to make sure that any implementation has minimal disruptions during the change imlementations and the change leaders are there to support the end user needs. The business is happy with the change and ultimately realise the application really does help them do their jobs better.

Remote Project Management

We all know that Project success is dependant upon constant communication, interactions and coordinations between all parties so that project is successfully executed and all risks and issues are identified and therefore addressed, mitigated in a timely and correct manner.
Project Manager is one of the most integral part of a project who can make all the difference between a project success and failure based on his constant Team interactions, coordinations and negotiation skills.
Project Manager taken out of the loop even for a few days, leave alone working remotely, can cause lots of issues and problems. Client communications, risks identification, coordination activities everything will get impacted.He is like an orchestra conductor who makes sure that musicians play the right music according to the plan and the orchestra is conducted harmoniously and synchronously.

I have been on projects where i had to manage my Teams remotely i.e. the project was being executed from multiple geographies - Development was from India. The Business users were in the mid west and i was on the east coast. So how is all this possible if the project manager or the Teams involved are not co-located?
First of all, why would anyone want to manage a project remotely. There are numerous advantages of doing so.
1> Cost effectiveness
  - In today's world most organizations are focusing on cost budgeting, resource optimizations and operational efficiencies, while also maintaining the organizational business level needs
  .
2> More flexibility 
  - In terms of work hours, resource schedules and timings. Resources when working remotely have more control over their time and schedules and are therefore more efficient.
 
3> More Effective
  - By using well proven communication tools and techniques for project coordination, reporting and follow ups etc

Here are a few logical and proactive steps that will ensure your project is a success even though you are working remotely. This can be achieved by following 4 simple guidelines

1> Communication Plan
Have a clearly defined laid out weekly, monthly communication plan for stakeholder, team meetings. Have the Agenda clearly defined for these meeting so time is not wasted in going through unnecessary details.
    - Communication, communication, communication...this point cannot be stressed enough. When the project manager is remote, it is all the more necessary for the Team to be in sync and on the same page with the PM on every aspect and detail of the project. This can be achieved by having regular frequency meetings with the Team.

2> Remote access tools
Make sure you make use of remote sharing tools, voice and video conferencing facilities where applicable and possible.
    - There are a lot of tools available in the market today that can help you manage a project remotely and successfully. Tools like Video conferencing, Remote desktop sharing etc helps you have face to face conversations, share desktop sessions with Teams and have meaningful and productive interactions.
   
3> Meeting Frequency
Increase the frequency of communication with your team. Plan more get togethers and Team outings. Increase frequency of your customer calls
    - Being remote makes it all the more important to maintain and develop a healthy team rapport. For this, i will suggest, have frequent site visits to meet the teams, have lunches, outings together with the Team. The Team should not look at the project manager as a daily 9 PM - Channel 7 News broadcaster, but a project facilitator, Team Leader and motivator.

4> Management Reporting
Increase the frequency of your executive management reporting
    - Make no mistake here, out of sight is not out of mind, especially for the project sponsors and the C Level executives who are paying for the project. Make sure you have regular detailed and elaborate reporting. Let them know, build their confidence that even though you are remote you are aware and on top of things and issues.
   
All these steps will ensure not only project success but will also fetch you the brownie points of being an effective and proactive leader who can confidently get the job done remotely or not.

Manage Stakeholder Expectations

Many things have been written and said about Managing Stakeholder Expectations. This is one of the most difficult tasks a project manager has to perform throughout the life cycle of the project depending upon the type and number of stakeholders involved. Essentially what may mean as a 'perfect and successful' project to the project manager, may turn out to be a complete disaster in the eyes of the stakeholders.

During Concept Phase:
A Project is conceptualized when the stakeholders or project sponsors meet and layout the project idea. Objectives and goals are set at this stage and a project is born. Once it has taken a definite shape and the ball has started rolling and the project progresses from the concept or initiation phase to design, construction, testing and finally delivery and closure. At every stage, we, as Project Managers have to manage stakeholder expectations.
Every stakeholder comes from a different arena or a different functional area and therefore has different definition of success. Hence it is very important at the onset, to make sure all stakeholders are on the same page and are driving towards a common goal. This is achieved in the Project Kick off meeting. The project sponsors or the ones who had laid the project high level objectives may not be the only ones who are the actual stakeholders that are involved with the project, as the project progresses you will find the number of stakeholders and actual representatives may also vary.
So, from the initial requirement sessions you may find that the stakeholders that get involved are deviating from the ground rule and are asking for something that is not in project scope or not inline with the general project agenda.

This may happen due to various reasons,
1> Stakeholders not clear on the Project Objectives
2> Need some understanding wrt different project areas or how projects are executed.
 It is the job of the Project Manager to make sure these risks are addressed at proper time by proper planning.

Example:
Coming to an insurance industry example of this scenario,
say the project deals with integrating your Policy-Claims administration system with a Contacts management software and during the stakeholder meetings, the discussions lean towards tweaking and tuning of another dependant 3rd party interface - CMS upload for medicare.
Agreed, the 2 items may be related, but that does not definitely mean that the other interface is to be handled in this project scope (Unless that is the way the project has been scoped out).

To handle this situation make sure the project objectives are strongly and succintly communicated to the stakeholders that we are integrating to a new contact management software and this may mean some changes associated to some middleware bridge to make the other contact dependent interfaces work as expected, with minimal to no impacts. This lays a ground rule and restricts the deviations that may otherwise happen.

How to:
Major steps to stakeholder management in any project large or small are,
Step 1:
Conduct Stakeholder interviews:
 - Study your stakeholders - their roles, who they are - organizational positions, their project roles - e.g. sponsors, end users, business SMEs, what they do? How would they influence the project outcome - completely understand their 'needs' and 'beliefs'? All this can be managed by having a 'Stakeholder map'.
 - Know them wrt likes, dislikes, project expectation etc

Step 2:
Stakeholder Communication:
This is the most important thing in any project. I cannot stress on how important is this factor to guarantee a project success.
 - Involve your stakeholders in all stages of the project right from initiation.
 - Try to understand the project objectives from the stakeholders perspective. What does it mean to them by project success/failures/key painpoints etc? Let them define this in their own terms.
 - Familiarize them with project financials, give them an overall project picture by having regular project status report meetings. In these meetings, make sure you concentrate on areas that are important to the stakeholders rather than delving into your project management methodologies and bravado stories.
 - By effective communication and holding them accountable to project realities in times of project changes we can definitely and successfully manage stakeholder expectations. Remember Stakeholders and Project Sponsors have as much vested interest in project success as everyone.

Insurance and IT Projects

I have been associated with the Insurance domain for over 12 years now and all my projects management related articles are based on my insurance projects background. This article tries to understand the relationships that exist between Insurance and IT and how to successfully execute IT Projects in the Insurance industry.

Insurance Industry Project Management relationship:
Insurance companies have a need for IT project implementations mainly based on their business requirements wrt speed to market a product, to align the organizational, cross divisional efficiencies, to reduce costs, to optimize processes across organization etc.
Insurance industry has a vast paramount level of experience wrt the business knowhow, but when it comes to the project management, there is required a specific skillset that will get the job done right, the first time.

Business need:
To execute projects in Insurance domains, the first and foremost thing that has to happen is to understand the business value expectations by clearly articulating and understanding the business requirements. Once this is defined, it is necessary to understand the current state and future state of the business processes so that it will help to optimize or leverage the technology solutions that can make the transformation possible.
Once the Technology solution is defined on paper atleast in a draft version, it is necessary to develop a high level roadmap taking all the stakeholders and project sponsers in confidence and develop a high level implementation plan. This takes into account and aligns the Program/Project level goals wrt Scope, time, cost, quality and resources.

Project Types:
Insurance projects vary from small size and budget to mid size - product implementations to enterprise level transformation Initiatives. Depending on the project types, the application and business needs, the project management processes and methods are decided.

The most common project categories of Insurance IT Projects are,
 - IT System or enterprise level system consolidations
 - Insurance Product implementations
 - Application development, maintenance and Outsourcing
 - Systems integration
 - Pure IT Outsourcing

Methodology:
Projects in Insurance IT can follow any and all methodologies of execution. This entirely depends on the organization culture, project size, type, budget etc.
Traditionally Projects have been following the waterfall methodologies and in the new age either lean towads the RUP or Agile execution methodologies or a mixture of the two.

Project Manager Success criteria:
For a Project Manager to be successful in the Insurance IT Domain, he has to have Insurance business processes, operational knowledge along with Technical knowhow and skills
To elaborate,
Business Process knowledge
Understand the insurance domain industry, atleast the functional area with which the project is associated - either policy, billing or claims
Understand the various roles played by the stakeholders, SMEs and end users like Customer service (CSR), Intake, Accounting, Underwriting, Billing and collections, Operations, Sales, Marketing etc

PMO:
Successful Execution of Projects in the Insurance domain industry is based first and foremost on laying proper groundwork in terms of having a proper Project Governance plan or setting up a formal Project Management Office (PMO). PMO based on the project scope will divide or structure the project by LOBs based on business efficiencies to be achieved.
Another point to note is that since Insurance is a highly competive industry, driven by business needs, project Management exposure even if it exists will be in cross functional areas or even in deep departmental silos. So what this means is, the PMO has to first allocate and then align the Organization resources towards the common objective set and goals. For successful execution, the PMO should have a common and consistent approach in executing the projects. only this will ensure a common platform and lay the basis of future project success.

PMO functional areas:
PMO in Insurance IT will have to deal with Vendor management, project planning, budgeting and structuring, project communication and risk management planning.
PMO has to keep in focus the enterprise level impacts of the project being executed, be cognizant of the project management and execution costs wrt scheduling and planning tools, development and status tracking tools, configuration, testing and issue resolution tools. 
The roles of the executing body have to be well defined as a part of the planning process.The Team has to be made aware of the various phases of project management, the dependent roles and parties involved e.g. requirements, development, infrastructure, testing, QA etc
Scope creep and cost overruns need to be managed very carefully to ensure project success