March 8, 2013

[BPR IN INSURANCE]

BPR in Insurance
Introduction Business process re-engineering is an approach which aims to improve the efficiency and effectiveness of the existing processes in the organization. One of the key aspects of business process re-engineering is to identify the processes in place which can be further improved by making necessary changes which can also help in elevating the business performance. Definition of BPR: It can be defined in one of the ways as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed."1 Business process re-engineering is mainly focused at removing the non-value adding processes. Many managers fail to recognize this and tend to spend their resources and time on optimizing these nonvalue adding processes. On the other hand it is really important to recognize such processes which can be obliterated because obliteration of important processes could have negative implications. Making trade-offs between elimination and keeping the process which is of mediocre importance is also a big challenge for the managers. Hence a veteran level experience is required to make a successful business process re-engineering. In contrast to the other organizational development approaches like TQM and Continuous improvement, BPR brings in drastic changes in the organization. Businesses should focus on bringing in drastic changes which can improve the activity by several times in short time and not just Business Process re-engineering in Insurance Implementation of BPR in Insurance industry/organization can bring in drastic changes in the business activity. Some of the areas of Insurance where business process redesign can be implemented are: Under writing solutions Business Intelligence and Data Analytics Claims processing solutions Re-insurance solutions Insurance work flow and Interface solutions

Under Writing Solutions: Insurance industry is facing the problem of automating the underwriting solution. This leads to reduced profits and inefficient business activity. The BPR process may help under writing activity to develop new application platforms and eliminate legacy systems. E-commerce and web based applications may also be used to make the activity real-time.

Hammer and Champy (1993).

March 8, 2013

[BPR IN INSURANCE]

Business Intelligence and Data Analytics: Insurance industry deals with huge amount of data and BPR solutions can really help organize, structure and integrate data across the organization. BPR can also help in achieving efficiency in following areas of BI and DA: Data mining Data modeling Data transformation Data scrubbing and cleansing

Claims Processing Solutions: This is a critical business activity in insurance industry. Here are some of the areas where BPR can be implemented in claims processing activity: Custom Application development Modernization of legacy systems Documenting existing applications

Benefits derived out of implementation of BPR in claims processing: Reduction in 35% of transactional cost and improved settlement efficiency by almost 40%. Re-insurance solutions: Re-insurance solution involves extensive paper work and implementation of BPR can solve this problem. Some of the areas where this can be implemented are: Maintenance and support of legacy systems Web enabling of the applications Migration of legacy systems

Benefits derived out of implementation of BPR in claims processing: Reduction in processing cost by almost 40%. Improved efficiency through automation of processes.

References:

1. www.bimabazaar.com/insurance-articles/84-general-insurance-articles/746-concept-ofbusiness-process-re-engineering-bpr-a-its-applicability-in-insurance-field