Meadowbrook Insures Competitive Edge with Help from Adeptia BPM Server

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By Lou DiToro

Insurance is a tough business. The competition for clients within the industry is as fierce as anything out there. So it's not uncommon to face competitors that are aggressive, determined and experienced. To survive in this highly competitive industry, insurance companies must not only introduce innovative programs and employ visionary thinking, they must also respond quickly to meet customers' needs and seize business opportunities when they present themselves.

Meadowbrook Insurance Group is a recognized leader in the insurance industry. It's also among the industry's most successful and innovative firms. Founded in 1955, it started as a small retail agency and became one of the industry's most formidable competitors. By pioneering alternative risk management (ARM) when it was only a concept, Meadowbrook capitalized on ARM's growth and became a $100 million company. It's now a full-service risk management organization specializing in alternative risk solutions.

Headquartered in Michigan Meadowbrook provides insurance and insurance outsourcing services to companies in a broad range of industries. Its clients include public entities, professional and trade associations, businesses and individuals. Listed on the NYSE, Meadowbrook includes carrier companies, agency operations, brokerage firms and insurance subsidiaries. Among the business units are Mead Insurance Agency of Michigan, one of the largest and oldest agencies in the State; Williamsburg National Insurance Company; and Crest Financial Corp.

Acquisitions Fuel Recent Growth

Meadowbrook's rapid growth the last few years stems from strategic acquisitions. Until recently, these business units operated independently, using various commercial or homegrown business processing systems. This eclectic approach to business process management is not uncommon in the insurance industry. In fact, it's not unusual to have five or more systems integrated within a company, with multiple billing commissions, licensing and contracting approaches all active. While expedient, this approach encourages inefficiency and errors and hampers a firm's agility.

Recognizing the downside of this approach, Meadowbrook took decisive steps to improve business processes not long ago. It focused on streamlining processes throughout the enterprise by introducing a comprehensive improvement program. Driven by the support of top management, this improvement program has become a major top-down strategic effort. To spearhead the effort, Meadowbrook formed a governance committee comprising senior management people from all over the company. The committee provides strategic direction for the program and ensures that changes to business processes are completed and approved in a timely fashion.

"The committee's imperative is to create a common view across the different process centers," said Becky Andriaenssens, senior vice president, Agents Edge, Meadowbrook Insurance Group. Andriaenssens is a member of the committee and a champion of the firm's process improvement program. "We're reviewing all the processes throughout the company to see what's of most importance. Where the processes are common, we're standardizing and automating. Where they're unique, we're allowing them to remain unique."

Meadowbrook also formed a process improvement committee, led by the company's CIO, to implement activities. This started with a proof-of-concept project, and when that was successful, introduced a pilot project, which also proved successful. It has now moved on to deploying more significant enterprise-wide processes essential to boosting the company's agility, processes such as premium reconciliation between accounting systems, policy issuance administration and validating receivables on the premium side.

Integration a Challenge

The objective of Meadowbrook's process improvement program is to squeeze out inefficiencies and eliminate errors by automating non-thinking functions and disposing of key entry activities, enhancing responsiveness and cutting costs. With so many diverse systems involved, however, it wasn't surprising that Meadowbrook faced some challenges when it embarked on the program.

Initially, system integration and data transformation proved major issues. Like many companies, Meadowbrook processes a wealth of data daily. The data must travel not only across companies but also between departments and agencies with no loss of information. Integrating the different systems so that delivery occurred seamlessly and maintained data integrity was a critical step in improving the process. The main problem was that data integration points between the different systems simply didn't exist.

"Meadowbrook has grown significantly the last few years," said James Lee, project manager, Meadowbrook Insurance Group. "Along the way we acquired a number of independent business units with systems that didn't talk to each other or had difficulty talking with each other. With some systems you have integration points that you can turn on and use. But they don't exist in this world. So the lack of integration points became a challenge for us, one we had to meet."

Complicating the problem was the way information arrived at Meadowbrook's headquarters. Much of the information comes in different formats, everything from flat and XML files to EDI and Microsoft Excel. Many of these file formats weren't readable by the company's main system, developed by BearingPoint. Thus, the files had to be transformed to a format that could be read by the BearingPoint system before the data could be processed and stored. Any solution to Meadowbrook's problem had to resolve the integration and data transformation issues and maintain data integrity, all while ensuring rapid delivery.

Adeptia BPM Solution

Initially, the company addressed the problem internally, relying on its IT department to create the integration points it needed. But when this approach proved time-consuming, Meadowbrook altered course. It went outside the company for a faster solution that combined both strong integration capabilities and robust data transformation services in one package. It wanted something that was easy to install and user friendly, so business users could work with it with a minimum of help from IT. Since the company was familiar with Adeptia, Inc., an enterprise software company located in Chicago, Meadowbrook choose the Adeptia BPM Server, a Java-based application built on the J2EE framework.

The Adeptia solution combines process management with application and partner integration. The solution enables business users to design, automate and improve workflows, driving process efficiencies. More importantly, the Adeptia BPM Server enables users to integrate disparate information sources, software applications and business users within an enterprise and across customers, vendors and business partners. Its strong integration and data transformation capabilities differentiate it from other BPM solutions.

Meadowbrook took full advantage of the solution's integration and data transformation capabilities. The solution's integration server comprises data transport, transformation, mapping and Web services modules. Meadowbrook used the data transport module to facilitate end-to-end data delivery and management of the system through standards-based protocols (HTTP/S, FTP and SMPT/POP3). In addition, the server also includes support for Java Connector Architecture, which allowed Meadowbrook to configure adapters for bidirectional, real-time connectivity with third-party applications.

Modeling a Big Advantage One of Meadowbrook's next major projects is streamlining the company policy issuance system, which is in the process of being defined. The goal for agents is to enter data into policy applications at their terminals and then forward the files to Meadowbrook, where the files need to be transformed into a format that can be read by its central policy administration system. Once the information is transformed, it is then integrated within the system, processed and stored. This is a key process improvement effort for Meadowbrook. By standardizing issuance and automating underwriting rules, the company will enable its agents to handle almost everything involved in the issuance process, improving customer service, enhancing responsiveness and creating a competitive edge. Meadowbrook's first step will be to model the business process before it gets into the technical design stage. Using Adeptia's modeling tools, Meadowbrook will design an "as-is" workflow model. It will map out all the steps involved in the process and then examine the model for inefficiencies. Once that's completed, it will develop a "should-be" model, which it will run through the BPM solution to ascertain that the company has captured all the improvement opportunities. Once the model is approved, Meadowbrook will move onto the data mapping process. With Adeptia's graphical user interface, the insurance company will do whatever custom coding needs to be done, if any. If there is coding to be done, it's usually done within the interface itself, which features drag and drop capabilities. Since the modeling tool is built on the backend of Java and XML, Meadowbrook employs JavaScript for coding. Once the schema is designed, the interface speeds the mapping process. Before deploying the system, Meadowbrook will test the workflow to ensure that everything runs smoothly. Having defined a schema for the source, target, fields, parameters and so on, Meadowbrook can simulate the process, creating dummy data based on various parameters. It will then run the mapping process for the appropriate edits and provide the output. The process will tell Meadowbrook if they have an edit in place, like having a numerical edit where it shouldn't be. This enables the process to be refined before it goes on line, saving the company time and money.

Schema Layout Critical

To ensure secure data transformation, Meadowbrook utilizes two key components of Adeptia's data transformation services -- its Schema Designer and its Data Mapper. With the Schema Designer, Meadowbrook is able to specify metadata for commonly used file formats. The solution's Schema Parser allows Meadowbrook to automatically process data messages and file formats based on the schema definitions.

In addition, Meadowbrook uses the solution's Data Mapper, a Web-based service, to define data transformation rules in plain English rather than code. This eliminates the need for the intricate, time-consuming and error-prone process of manually writing hundreds of lines of data mapping code. Using Adeptia's data mapping tool, Meadowbrook is able to auto-generate data transformation code in a fraction of the time it would take to do it manually.

"What we really like about the data mapping tool, in addition to its capabilities, is that it allows for maximum usability of integration points," said James. "We can take a schema that we lay out for one project and use it for another project, enabling us to leverage the process for use at other points in the system. We just lift the basic framework of one project and carry it to another project. So with a minimum of tweaking, we're ready to start on another project. That effort will saves us anywhere from 25 percent to 40 percent development time on other projects."

Moving Ahead

With the integration and data transformation issues resolved, Meadowbrook is forging ahead with its process improvement program. It's now focused on standardizing enterprise-wide business processing systems, like Accounts Current, one of its latest projects. This project entails centralizing account information by importing and transforming data from various business units into the company's BearingPoint system.

Streamlining the Process

The project has streamlined the Accounts Current processing system, according to James. Data records are sent to Meadowbrook in batches. The system validates the information by matching key record data, like the policy number. If there's an error, the system flags the record and notifies the account's team. A team member reviews the error or errors online, corrects the data, and then resubmits it.

When the data is approved, it triggers the process flow again. When processing is complete, the system notifies team members, who review and verify the information one more time before processing continues. This activity all takes place within the Adeptia BPM Server. When all the records are purged of errors, the BPM solution then releases the information to the system for additional processing.

Initially, the project involved four Meadowbrook agencies out of more than 100. Previously, the business units would have transferred information to corporate headquarters, where it would have been keypunched into the system. Normally, team members would have taken over 27 hours just to keypunch the information into the system. With Adeptia's help, Meadowbrook has cut data entry to about an hour. The company plans to expand the Accounts Current process throughout the enterprise.

"Our redesign efforts with Accounts Current have proved productive," said James. "We've eliminated the tedious and time-consuming data entry work required and enabled our people to do what they're good at, which is data analysis and customer service." With the Account Currents project up and running, Meadowbrook is now turning its attention to Policy Issuance administration, again with the goal of eliminating tedious time-consuming operations and easily avoidable errors.

One Unified System and Agile Response Time

Meadowbrook's pilot project took a couple of months to design and deploy, thanks mostly to the company's inexperience with redesigning processes and working with the Adeptia BPM Sever. But the company has quickly gotten up to speed developing these types of projects, with help from Adeptia's technical team. Where necessary, the company has brought in new people with key skills and resolved environmental issues. Now that the company is able to design and deploy business process management systems relatively quickly, it's focusing on streamlining and optimizing major business processes throughout the enterprise

By improving business processes, Meadowbrook is gaining a competitive edge. It's eliminating many of the inefficiencies and unnecessary costs that plague competitors. Instead of having several independent systems within the company, Meadowbrook is working on creating one unified system across the enterprise, enabling it to transfer information quickly with no loss of data. More importantly, its process improvement program has positioned it to respond quickly to customers' needs and to seize business opportunities when they present themselves. And in the insurance industry, those are keys to survival.

Useful Links

Meadowbrook Insurance Group
http://www.meadowbrookinsgrp.com/

Adeptia, Inc.
http://www.adeptia.com/

About the Author:

Lou DiToro is a freelance writer who specializes in writing about business processes and competitive strategy. He welcomes feedback on his articles for BPMEnterprise.com. Contact Lou DiToro at louditoro (at) hotmail.com.

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