Allstate Says New Claims System Puts Customers In Good Hands

The new technology will lead to faster claims processing and help ensure Allstate pays out the "right" amount to every claimant.
At one point, Allstate had 90 different applications, many of them running on mainframes, for accessing data in many different places. It's consolidating much of that data into an Oracle database. It's using Tibco Enterprise Application Integration software that supports standard Web service protocols, making data exchange between systems much easier.

This reduces many of the IT labor costs associated with maintenance and integration of many different applications, and also brings business process improvements. Next Gen includes new content management systems for unstructured data, including those that manage document images, eliminating much of the paper shuffling and overnight mailing of documents from one office to another.

Perhaps most importantly, the services-oriented architecture makes it much easier to create and alter business processes as needed. That's allowing Allstate, for example, to more easily refine its workflows so that more types of tasks can be handled by claims processors and don't land on the desks of more highly paid adjusters, creating unnecessary labor costs and slowing down the process. SOA also means being able to create a new service, such as one that determines the best path to immediate settlement for a specific type claim, that can be reused for other types of claims.

Allstate can more easily do analysis on claims to make sure there's even more consistency, identifying cases where there is a payout amount discrepancy between two seemingly identical types of claims. Data analysis may help Allstate identify areas where it thinks payouts have been too high, but Newsome doesn't necessarily think that'll lead to customer strife if the claims are processes faster. "People seem to be more happy with less money right away, than more money after a lot of hassle," he said. "There's a lot of evidence that suggests the faster a claim is adjusted and resolved, the lower the cost of the claim to the insured." When people wreck their cars, for example, they may have to pay out of their own pockets to rent an auto while the claims process is underway. Insurers don't grow a business through unhappy customers, which is why execution of Next Gen is important. "Claims processing is the most critical contact with customers," Newsome said. "Long term growth is dependent on how well you do it."

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