Tackling unique automation challenges insurance companies must manage
Interview with Erwin Schwarzl, TCG Process Managing Director of Germany
Please share a little about your background, and your time in the market before joining TCG Process. Were you involved with other process automation companies?
Where do I start? (Laughs) My educational background is in business, international marketing and computer science and I started my career as a programmer at Eastman Kodak in Germany. Though I spent the first few years in IT programming and projects, I quickly moved into IT-related marketing and sales in Kodak’s document imaging division.
I held a variety of roles across multiple geographies at Kodak, all of which gave me a diverse set of experience that I still call on today. I started in the product organization (product management, presales and product marketing) before moving into a GM role. Initially my regional focus as GM was EMEA, which expanded to worldwide GM of document imaging – a role that required my family and I move to the US. This role offered me a broader view into R&D, marketing, manufacturing, sales and post-sales service, as well as insight into Asian, Australian and Latin American operations.
Kodak’s products helped enterprises convert large volumes of incoming paper documents to electronic with scanners and capture software – initially just for archiving, though it quickly evolved into the need for workflow and process management. One important piece was interfacing with partners who had complementary software, and my work became heavily focused on international channel expansion.
I find technology interesting, but technology itself is not the key thing for me.
What I enjoy is building solutions that make sense for the people who use it. And in 2008, I realized TCG could be a great opportunity to do just that.
I actually knew Arnold von Bueren (TCG CEO) from his time at DICOM/Kofax. Our first step was to establish the German company and win a few customers with the very responsive TCG development team in Switzerland. Then Lutz Schäfer joined, who is now our TCG Germany’s CTO, and we became self-sufficient in delivering customer projects.
You were on a very successful career track in the industry. What was it about TCG that excited you enough to change course?
One of the key reasons I was looking for a change was to settle down a bit from all of the travel, to be in a single place with my wife and four kids.
Additionally, I like to build things--it’s in my nature. My wife and I have enjoyed building a big family, and during my time at Kodak I had the opportunity to play a key role building a world-leading scanner business. The potential for growth is what drives me. TCG gave me the opportunity to become an entrepreneur with an amazing technology, which had long been a goal of mine.
When I met the team at TCG I recognized their “can-do” culture… Everyone was focused on building something new and better for the market. That kind of great culture starts from the top, you know, and Arnold was someone I knew to have proven performance.
I also realized just converting paper to an electronic document was no longer fascinating. The bigger question is what you do with it after that, when the data is what is valuable. It was clear this was TCG’s focus, too. Their business process automation goals were beyond capture; they were focused on solving business problems.
What type of insurance companies have you worked with on document and data process automation?
So many different types depending on where I was in the world! I’ve worked with the very large, BlueCross BlueShield-style insurance companies in the US, down to small providers, like the composite insurers here in Europe (most of whom have consolidated into big organizations). Today, we work with composite insurers, government-regulated public health insurance, and private health insurance alike.
Our first TCG Germany project focused on insurance contract documentation. We entered into a huge project with a large, international life insurance company; they wanted to create a digital process for agents selling financial products.
The ultimate goal at this life insurance provider was to keep the sales team efficient, which is a tough challenge considering the huge volume of salespeople insurance companies employ. The process had to flow faultlessly and very, very fast - and the TCG platform succeeded on all measures.
Of course, a huge benefit was the ease of document and information logistics, but the emotional driver for the organization was employee compensation. Because many insurance agents are brokers, it’s important for them to see how productive they have been; this is their livelihood. If an insurance company takes two months to deliver earnings information, it can mean decreased motivation and sales impact for important brokers.
Though the need for process automation can be similar in large organizations, there are unique challenges insurance companies face. What are those factors that drive the importance of automation in this industry?
Insurance companies are among some of the biggest business-to-consumer companies in the world. If you have lots of clients, you have lots of communication. These clients interact with you in whatever way they feel like: paper, fax, email, social media, chat tools, … and they still call. But no matter how they send in the information, the data must be processed the same way with the same rules and regulations. Customers expect their insurance company to be up to date on all communication when the insured calls, texts or emails. Insurance companies can no longer say “it’ll take a week until I can review that communication or document”… they need access to all incoming information very quickly.
Even with all of this customer communication, many insurance companies still leverage antiquated, poorly-integrated legacy systems to manage client dossiers and risk. Often customer documents provide information which is key to regulatory compliance and proper risk assessment. A lag in processing time, however, can dull the customer experience and mean a competitor garners the sale.
And this isn’t a one-time customer communication event. There are multiple correspondence points throughout the customer lifecycle in insurance. Some types of insurance require annual paperwork, regardless of whether or not a claim is ever filed.
Additionally, fraud prevention is a huge goal for all insurers, on both the claims and sales sides of the business. This is often why a client finds the TCG platform to be a good fit: Based on the client’s business rules, TCG can enable fact-checking processes, helping companies to automatically identify suspicious networks and parties conspiring to maximize insurance claim payouts.
Which day-to-day insurance operations and processes are typically still the most manual and in need of automation?
No matter the type of insurance provider, you always have these two parallel, but equally complex, processes running daily: sales and claims. Often, both have processes in need of automation. By far the most manual processing challenge facing insurance companies today is the claims process.
The number one challenge in claims is document logistics; you must ensure all documents that belong to a case come together for the claim to be processed.
Communication comes in from so many sources and channels: evaluation from the adjuster, questions to and from the car shop, the owner, possibly a third party who was involved. Bringing all of this communication together, attaching it to the right case and account number is a very complex and complicated task.
To take it a step further, in addition to collecting and securing documents, insurance companies work hard on fraud prevention. The content on the document must be validated.
And when these manual processes encounter a seasonal or unexpected spike in incoming documents, as is the case when we experience natural disasters like hurricanes or fires, the need for automation becomes even more obvious.
What is the typical entry point to automation? Is there a process in insurance that is the most common for customers to start with? Or does it just depend on what has the most internal value?
It really depends where the pain is the biggest. Many of these companies already have some type of document management solution in place today … but older solutions struggle to keep up with the need to be flexible and respond to changing requirements. Therefore, sometimes the entry point is a semi-automated process that the customer knows could be improved.
Also, as I mentioned before, insurance companies regularly run into workload challenges and this could be the process that drives the initial deployment. Insurance is a seasonal business. In Europe, automotive insurers renew all policies at the end of the year; the same can be said for US health insurance plans’ open enrollment period.
This means that in the months of November, December and January these companies are dealing with much higher incoming communication load per day. Without automation, you need more people who must be trained in order to follow the proper processes, and to ensure an excellent customer experience. Our solution automates the process, rules, and validations which then lowers the need for seasonal personnel while remaining compliant with risk assessment and company policy.
When the TCG platform is deployed to solve the insurer’s most pressing challenge, document logistics, it automates those process steps with little to no human intervention and thus proves the platform’s flexibility. Our customers then quickly expand into other document types, processes and departments.
ROI is always part of the discussion as to what comes next: Are we losing insurance customers because of turnaround time? Which process is very costly, if we move it how much money will we save in labor or IT infrastructure cost, for example?
When we can, we advise customers not to tackle the largest and most complex process challenge initially. The best practice is to start with something a bit simpler in order to build the organization’s experience with the TCG platform. This helps our team understand the systems landscape and technologies, and together we determine how to best fit them together.
Sometimes, however, this is not possible, and they decide to jump in with both feet. At this point, we help them to break the project down into measurable pieces, or phases. This allows you to see ROI at every checkpoint and offers measurable results for the length of the project.
How has the move to the cloud impacted the insurance market?
The cloud has allowed insurers to reduce IT infrastructure costs. I mentioned the seasonal nature of the business ... With cloud infrastructure, insurance companies can turn around an enormous number of documents during peak processing times without having the hardware needed for that kind of speed sitting around for the low volume months. IT can scale up services to accommodate exactly what is needed, when it is needed.
It also offers the insurance organization the opportunity to outsource management of the automation tool. This often will lead to quicker deployments, which means a quicker ROI. IT no longer needs to spend time setting up resources and infrastructure in advance of project kickoff.
In the early days of the cloud, we had customers concerned about cloud and data privacy, as insurers deal with so much sensitive customer information. Nowhere was this concern more the case than in Germany. But we recently had an insurance customer who wanted to move tech to the cloud, and we now have a German private cloud service up and running to support them.
What do you think is the next major trend in business process automation that people should be paying attention to today?
I’d have to say the most interesting trend for our market is those that offer gains in contextual or semantic understanding.
We can now use AI and bots to interpret meaning and context from documents like never before, which will mean much higher touchless automation rates.
And this is important, because there are not enough people around to do this manual work. Why should you have people that type data from a sheet of paper into a computer - or from one window of a computer into another?
It addresses the ongoing, global need for data privacy as well. When we incorporate predictive technologies like AI and bots with traditional tech like character recognition in a process automation platform, we limit human interaction with sensitive data. And this is key to keeping your data yours.
Please share a funny story that customers or partners can read that would give them an insight into the culture of TCG.
In all of TCG, but particularly here at TCG Germany, we are like a big family. Before Covid times, we used to bring the team together every quarter and rent a house and stay the night, doing team building and cooking together.
The TCG Germany office is outside of the city, “in the green” as we call it, and people spend time cooking together. Once a week, someone in the office cooks for everyone, we take turns. The food is great and often international, as we have people working with us from all over Europe. On Fridays when the weather is accommodating, I barbeque for the team. And we have a distillery!
How long have you been with TCG and in what roles have you been trusted to help lead with the company?
I have been with the company for 12 years, since 2008, when I started as a one-man show with TCG Austria/Germany. These days in addition to being managing director, I support Arnold in international business planning and serve on the TCG Group Council.
What do you like to do in your free time?
Even though the kids have moved out of the house at this point, I like most to spend time with my family. I am also on the board of an international youth ministry that brings together young people from around the world and focuses on common beliefs.
And I ride the motorcycle when it’s not ski season.
I enjoy creation. We do a bit of hobby farming on our little farm where we grow things like vegetables, pears, raspberries, elderberries and Christmas trees. I think I enjoy just looking after things that grow and make our lives better, whether that’s colleagues, business processes, our company or fruit trees.
