Iqpc bpe - taking a new look at your customers through bpm
1. IQPC - BPE For Financial Services
Conference
Taking A New Look At Your
Customers And Stakeholders
Through The BPM Lens
Presented by Jorge Rosas
VP, Chubb Group of Insurance
New York, March 29, 2011
3. Stakeholders’ Lens
Four key quality characteristics of business
processes 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.
4. BPM and ACCURACY
A standardized model was developed to
measure accuracy.
A process was designed to apply the model in an
effective and efficient way throughout the
Corporation.
A BPM tool was implemented to automate and
monitor the quality control process.
BPM provides:
Accuracy data capture ability
Workflow management
Process metrics (throughput, inventory, variation)
Interface with Business Intelligence tool
5. 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 Engine
Business
Intelligence
6. RESULTS
Quality methods integrated in culture.
Accuracy metrics accepted for performance
appraisals.
Non conformances decreased 6 fold in 4 years.
Quality control provided valuable L&D information.
Reduced rework recognized for significant bottom
line contribution.
Enhanced policy administration capacity.
Improved customer satisfaction on ease of doing
business.
7. ACCURACY
In the insurance industry, accuracy has three main
stakeholders:
• 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.
8. ACCURACY LEVELS
1. 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.
9. CHECKLISTS
Accuracy is of a binary nature (correct/incorrect) relating
more to attribute data than to variable data, therefore
checklists are one of the better tools to capture this type of
data.
Checklists are composed of questions that should reflect the
accuracy characteristics required by the different
stakeholders.
The checklists are developed and agreed-to by all process
participants, 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 attributes
change for the stakeholders or are no longer required.
10. CHECKLIST REPOSITORY
An electronic repository of all checklists and questions
was implemented.
Each question is individually identified in order to track
its results.
Questions can be used to tailor specific checklists.
Checklist results are also tracked to create a scorecard
for the operator or process subject to the review.
11. METRICS
Absolute:
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.
12. TARGET GROUPS
Different groups are targeted for review depending on
the 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.
13. SAMPLING PLANS
A sample of products/services is selected for review.
The sample size may vary depending on whether
absolute or proportional metrics are being used.
For absolute, a Binary distribution is used
For proportional, a Poisson distribution is used
The sample size selected is determined by the
Operational Characteristic Curve at the appropriate
probability of acceptance for the expected defective rate.
Sampling frequency depends on the period under
review; i.e. if a year’s worth of data is wanted, monthly
samples could be appropriate.
Sampling plans need to be flexible in order to
accommodate different stakeholders’ needs; i.e. targeted
reviews.
14. APPRAISAL
Pre-issuance: performed prior product/service delivery to
customer/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 indicator
Post-issuance: performed after product/service delivery
to 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
15. QUALITY SPECIALISTS
Accuracy appraisals are performed by specialized
inspectors called Quality Specialists (QS).
QS are sourced from L&D or from the most
experienced practitioners; experts on existing
processes and systems.
Command peer respect through recognized technical
knowledge.
Trained in the appropriate interpretation of the
checklists.
Trained in quality control procedures.
Are usually specialized in a line of business (i.e. Auto,
Property).
Are considered a shared resource.
16. QUALITY SPECIALIST CALIBRATION
Calibration: because of the dynamic nature of accuracy
characteristics, QS need to be calibrated in order to
ensure 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 by
having Line of Business specialization: fewer persons
with 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 QS
and compared with other results in order to analyze
variance.
17. 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)
19. Business Intelligence
Accuracy improvement is achieved using Shewhart’s
PDCA model. A significant amount of data analysis is
required to isolate those elements that have the
greatest impact on Accuracy.
Thus the need for a sophisticated BI platform allowing
two 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.
20. Conclusion
BPM is a great tool to ensure
customer/stakeholder satisfaction, when used
as a standardized method, in an automated
platform, containing rigorous business rules and
sound statistical underpinnings.
