Q&A: CIO Rich Hallman on How EMPLOYERS Won Cross-Industry Innovation Recognition

Workers’ comp carrier EMPLOYERS’ modernization of core systems, portal technology and analytics demonstrates insurers’ innovation opportunity.

(View of Lake Tahoe, near Reno, Nevada, home of EMPLOYERS. Photo courtesy of the Reno-Sparks Convention and Visitors Authority, RSCVA.)

Insurance has gone from being one of the pioneers of data processing to being routinely identified as a technologically laggard industry. The high-tech industry has started to notice that insurers are already leaders in some disciplines, such as predictive analytics, and the forward-looking leadership of some carriers is showing once again why insurance is a data-driven industry par excellence – and why it should emerge again as a leader in the Information Age. EMPLOYERS, a small business-focused workers’ compensation carrier based in Reno, Nevada, presents an example of technology leadership and recognition. In 2013, the company was inducted into the Hall of Fame of the Center for Entrepreneurship and Technology (NCET) in the workers’ compensation carrier’s home state of Nevada. In 2014, EMPLOYERS was named Software Company of the Year by the NCET. EMPLOYERS’ CIO Rich Hallman accepted the award. Hallman has been focused on tackling legacy systems in order to build a foundation to deliver increased capacity and functionality to the business. EMPLOYERS’ technology modernization program has emphasized efficiency through business automation and a low-touch/no-touch approach. Hallman, who was promoted to the role of executive vice president earlier this year, talked to Insurance Innovation Reporter about his organization’s progress, including the success of its EACCESS® portal initiative.

IIR: Has your job changed much since you were named executive vice president?

Rich Hallman, EVP, CIO, EMPLOYERS.

Rich Hallman, EVP, CIO, EMPLOYERS.

RH: It has probably changed in terms of a heightened level of focus within the company for technology to help enable business strategy, improve business processes and streamline operations. Working with senior leadership allows us to focus on how to deliver the capabilities we need to differentiate ourselves. Having a seat at that table leads to greater interaction and influence.

IIR: What’s the technology philosophy you’re trying to drive, as it bears on transforming business processes at EMPLOYERS?

RH: We have a core value around innovation and constantly challenging the status quo. We’re putting in a new organizational structure that’s designed to redefine and continually improve how we deliver services, both internally and externally. Philosophy is part of it; but so is technology. When we’re using solutions such as Oracle WebCenter, there’s a tremendous opportunity to deliver industry-leading capabilities.

IIR: What does this mean for how you differentiate EMPLOYERS as a workers’ comp carrier?

RH: Much of it is around how quick we can deliver the right price and also services like loss control. As we look to the future, we’ve started a very focused initiative around predictive modeling. We have an incredible amount of data going back 100 years. There’s an opportunity to take that data, combine it with external data and look for themes and trends to better predict risk and better manage submission workflow.

IIR: Could you share how your transformation plans are proceeding from a high-level perspective?

RH: The first step we took was to understand the objectives of the company and where it needed to get to, and assess what kind of foundation we had to build on. The legacy capabilities wouldn’t deliver, so we developed a plan to deal with that. Our recent focus has been on underwriting and continued improvements to our claims system, as well as driving for a portal solution for external customers to deliver an improved experience and highly consistent value-added services. We are also now working on predictive analytics. But at the same time we’ve been focusing on the agent, and delivering a portal with a consistent look and a streamlined submission process.

IIR: That’s a good segue to talk about the EACCESS portal, which first went live in 2013. You also mentioned Oracle WebCenter, which powers EACCESS.

RH: We developed EACCESS using state-of-the-art web-based and mobile technologies. It provides a fully customizable dashboard, claims information, loss run reports, access to marketing materials, and a streamlined quoting system. It’s designed to expedite processes for agents as well as their customers and prospects. It uses Oracle WebCenter, as you noted, as well as AgencyPortal software and other industry-leading applications. We have integrated all of these systems into a single source of information utilizing an Oracle cloud-based CRM system. For much of our portal design work, our consultant partner was Keste [Dallas, Texas], who continues to do excellent integration work for us.

IIR: What was your rollout strategy?

RH: We rolled out EACCESS in two phases of functionality. We rolled out the first phase in Aug. 2013, which included integration to AgencyPortal and our policy admin system and leveraging an Oracle cloud-based CRM system. We rolled out e-billing at the same time. Previously customers had to call; now they can pay premiums online 24/7 with any device, and they can also access billing history. We had impressively little downtime for a new system rollout.

Our phase two rollout included 80 types of functionality within four months of the original go-live. These included many additional self-service capabilities as well as improved loss run reporting that was requested by our agents. Our focus is to continue to deliver important functionality at a minimum on a quarterly basis through our Agile development process.

IIR: Let’s talk about adoption. How has EACCESS been received by your agents?

RH: We had 10,000 agents self-register within the first 30 days, and 15,000 within four months. We think that’s unprecedented. We’ve had over 200,000 new submissions since going live in Aug. 2013. We recently conducted a “voice of the agents” survey and received very positive results. A great deal of the functionality was well received by our agents, but we also learned how to improve the portal and have since rolled out additional features. Listening to our customer’s feedback is important to us. We may think we have the answer, but what matters is how the agents use and perceive the system. It’s imperative to recognize that you’re never really done with an initiative like this.

IIR: Where does the initiative stand now?

RH: We continue to mature the functionality, but the next rollout will be focused on our policyholders. We have 85,000 policies, and we’re working on the ability to self-enroll or register, so that policyholders can come into the portal and manage their policy with e-payment, e-billing, e-delivery of documents and other functionality. We’re also looking at the claim reporting and payment tracking.

IIR: Let’s go from the front end to the back end. You said that legacy systems weren’t going to do that job, and that you needed to build a new foundation for increased capacity and functionality. What does that translate to in terms of core system investments?

RH: Within the last few years we upgraded our claim system, implementing AON’s iVos system. We will be launching an RFI/RFP process for policy administration replacement by the end of the year and we are currently underway with a predictive analytics initiative with the company.

IIR: What’s the status of that initiative?

RH: Within the last few months we engaged KPMG as our partner. We decided that we’d begin with our internal data and third party industry data and other public sources. It was important to find a partner with significant experience in predictive analytics, and in particular for workers’ comp. Our conversations with KPMG suggest that structuring the data will be three-quarters of the project. IT is of course a critical enabler in the initiative, but we had every part of the business in our initial kick-off meeting.

IIR: Why is the predictive analytics initiative so important to your business?

RH: Well, it goes back to the low-touch/no-touch approach. Without predictive analytics I don’t think you can be competitive. You need to be fast and predictable, especially in the small business market, which has small profitability margins already. If you touch the customers’ submissions, you lose profitability. And obviously it’s even worse if you have a claim.

Rich Hallman, third from left, receiving Software Company of the Year Award from the NCET.

Rich Hallman, third from left, at EMPLOYERS’ induction into the NCET’s Hall of Fame.

IIR: Before we wrap up, how does an insurance company win the kind of recognition you’ve enjoyed.

RH: Nevada’s Center for Entrepreneurship and Technology recognized what we’ve done with our focus around innovation, our hiring practice and using technology to enable business strategy. It was a great honor. We were recognized as Software Company of the Year based on the EACCESS rollout.

When I did my acceptance speech, I asked how many people even knew what workers’ compensation insurance was. It’s probably not the sexiest industry or something people even think of. But then one of the advantages we’ve had is that the bar is not very high. We have a lot of opportunity to deliver things that haven’t been delivered in the industry.

 

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at [email protected] or (503) 936-2803.

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