Big Wheel Auto Insurance Company provides auto insurance coverage for licensed drivers in the state of Indiana. The company’s headquarter is located in the city of Speedway where it has two strategic business units located at the cities of Waterloo and Corydon. In all, BWAIC employs approximately 150 people with internal departments consisting of the Policy, Claims, Payroll, Personnel, and Insurance Agents.
Currently, BWAIC insures 50,000 policyholders statewide. Last year, BWAIC’s net profit was $875,000. With certain state regulations, along with related socioeconomic impacts, the company expects an increase of new policies to underwrite. Accordingly, BWAIC is interested in positioning itself in the market where:
- Internal exchange of information is efficient,
- It improves its Customer Service,
- Share information with external business contacts.
To stimulate a vision within the company of leading the market in customer service through an efficient information system and to utilize the most current technologies at lowest possible cost.
Internal: An improved information process where business applications provide intelligent solutions, secured data, and improved communication exchange between units and offices.
External: To provide an advantage over the market where the interactions between the company and its external business environment produces customer satisfaction. Accordingly, this will have a positive impact on customer service where efficiency on the point of contact, through the lifetime of the policy, is evident.
Currently, BWAIC’s network setup doesn’t provide an efficient exchange of information between its key departments. Each department utilizes their own business transaction system within a mainframe environment. This input-output process performs the processing of their business transactions. The departments: Policy, Claims, Personnel, Payroll, Legal and Insurance Agents, have varying application needs. Likewise, they share a common interest – to achieve the best customer service possible.
The Policy department has users that perform the administrative and technical type of work as it relates to underwriting insurance policies. The Claims department has users that perform calculations for the reserves of claims. They review the potential liability costs involve in customers’ claims. The Legal department relies heavily on an efficient exchange of information.
The Personnel, Policy and Legal are information oriented departments. Claims and Payroll, on the other hand, relies heavily on accurate calculations of fiscal data. It is reported that the current databank is reaching its capacity. The current system is also inhibiting their customer service where the turnaround to process a claim takes about 90 days.
The strategic locations of the Business units also contribute to the problems of the current system. The mainframe system negatively impacts the company’s ability to reach out to their customers. The Insurance Agents are limited to the office in terms of processing new clients. Under the mainframe system, the structure of the database is costly to maintain and support. Also, it limits the company’s ability to intelligently process their information and exchange them with their external business environment.
There are a variety of systems available in today’s market. Costs will depend on the company’s desire on long-term solutions. In today’s information environment BWAIC needs to position itself to compete with other insurance firms with an advantage of having the best technological tools. An efficient system will produce satisfied customers and intelligent employees. This change in information culture will allow the company to utilize their resources more efficiently where performance reports and external data help the managers make intelligent business decisions. It is without reservations that I recommend the following solutions for the BWAIC:
Planning of the backbone and the network foundation is vital to the success of this project. It is recommended that a Client/Server network is implemented through a TCP/IP protocol. Each offices will operate as Local Area Network (LAN) connected together as a Wide Area Network (WAN). Each office and users will have the ability to exchange information instantaneously. This configuration will produce the best and secured environment for which powerful machines (Server) produce and process the information to the users (Client) of the information. The backbone (Bandwidth) have to support the type of data that will travel between the offices and through the customers.
Each department will utilize their own groupware that will process their information. This information system will be accessible via remote access to allow mobility and flexibility for managers to strategically position their resources and staff. To supplement this, it is recommended that an Intranet is put in place so as to allow information to external business contacts and customers via Extranet. The Intranet solution will also be the method that will enable E-Commerce activity and gain a market advantage
Conversion of the database to a Relational Database Management System is also vital. The current database cannot be shared with external information users. Likewise, it does not produce the type of information that produces intelligent reports for management. The existing data will need to be converted to an SQL language so that it can be processed and controlled by an Oracle Server. This conversion will position the company to be supported for future technological growth and will have the ability to control the anticipated increase of data.
Given the structure of BWAIC, it is recommended that the headquarter maintains and administer a central database. This will provide security and the least possible cost.
Since each department has different business needs, it is vital that an extensive study be conducted as to how, what, when, where and why they will process the information. Preliminary study is as follows:
- Policy – This department will require a groupware that gives them access to their policy database. This application will be web-enabled to allow mobile and speedy access.
- Claims and Payroll – These departments will require a groupware that will give them the ability to make calculations and have the control of inventory. The Claims department will utilize a web-enabled application that interfaces with the Policy information as to the status of policyholders. Payroll, on the other hand, will have an application for their internal calculation needs as well as provide a “limited” version to frontline supervisors for accurate reporting.
- Insurance Agents – This department will have the most mobile needs. The will have access to Policy and underwriting information at their fingertips. Their web-based application will interface with the Internet forms that are produced as customers are solicited.
- Legal – This department will gain an advantage over other firms by having complete information. The trickle effect of information efficiency throughout BWAIC will result in confidence on Claims adjusters and high level managers.
An extensive study of the following will be performed in able to produce a smooth transition to the new environment:
- The backbone of the current system to identify the size and cost-benefit of the proposed plan
- Each departmental needs and the behavior of which they process information
- The users as to how sophisticated their computer knowledge to identify the training needs and to evaluate how they will adapt to the change (impacts on the rollout)
- Identify and compare with a company with a similar structure and research the success and the feasibility the proposed system
- Develop a systems support plan and develop a business disaster plan to recover the company should a catastrophe of loss data occur
- Analyze the complete cost-benefit of the project and formulate a proposal plan to the President
This is to apprise you with the second phase of the Systems Re-Engineering Project which you have hired my services to perform an analysis on. This phase involves the survey and the planning of the relational database management system for your company which was articulated in my project proposal. As mentioned, I highly recommend re-structuring your existing current data model, which does not produce efficient use of the systems. This study of data modeling is vital to the success of the overall project. Afterall, the main asset of your company is its data.
Attached, please find the following:
Please do not hesitate to contact me to arrange a meeting regarding this phase or on any concerns you might have.
- Agents – An agent is assigned to many policies. This representative maintains the control of the policies and accordingly, the policies these agents underwrite is directly assigned to the writing agent.
- Claims – A particular claim is related to two instances in this model – Estimate and Policy Holder. Under one claim, there can be multiple estimates as to a particular claim. It is also the standard that an estimate is incurred when a claim is filed, thus making the Estimate a dependent entity. As to the Policy Holder, a claim is dependent where it does not come to a fruition without having a policy holder filing it.
- Estimate – This type of data is directly related to the activity of a claim. There is at least one estimate recordable to make a claim valid.
- Invoice – This type of data has a one to one relationship with a Policy. Likewise, a policy cannot have duplicative invoice and vice-versa.
- Policy – This data is central to the other entities. All of other entities are invalid without a Policy. Likewise, an invalid Policy data will directly incur an invalid data for all relating entities.
- Policy Holder – A Policy Holder has relational data with the Claims and Vehicle entities. This entity’s one to many relationship initiates most of the data activties. This entity can also be considered as the central entity.
- Vehicle – A vehicle has a one to one relationship with a policy. A vehicle cannot have multiple policies. Likewise, it’s possible for policy holder to have zero to many vehicle under it’s policy.
This explains the Entities in a data model and it’s related data. Vehicle Type (make + model + style)
A Policy Holder and Policy are the central information of the data model. From these entities, come vital information to make the data relationships valid. These entities are the parent of the data structure. Inputs and outputs are generated from these entities. Consequently, the context of these entities must be analyzed thoroughly to avoid the oversight of important information. The data study of these two entities should also result an extensive study of the technological end to identify the most efficient, secured and controlled systems environment.
From the Policy Holder standpoint, a one to many data relationship is produced within Claims, Vehicle and Policy. The Claims, Vehicle and Policy have “children” or subset entities relating to them. The Claims entity requires a one to may relationship to Estimates which is according to the company policy of approving claims. Likewise, a policy holder can have one to many claims and zero to many vehicle for which to purchase coverage for. A policy holder also has a choice of a variety of insurance coverages. This then creates a one to many relationship between the Policy Holder and Policy.
From the Policy standpoint, a likely item that a policy produces is an Invoice. To control the indexing and proper account practice, an implementation of one to one is suggested. An Agent is also an identified dependent to a Policy data where a policy is handled by a particular agent. Obviously, an agent has the ability to produce many policies, thus the relationship of one to many is implemented.
Our team has completed the third phase of the systems remodeling project. This phase covers the Information Process Modeling for your company.
The Decomposition diagram dissects your company’s information process into smaller subsystems, which further are divided into subsystems. The Context diagram illustrates and outlines the system, it hopes to give you a scope and boundaries for the system. The Data Flow diagram illustrates the entire input and output process. While the diagrams illustrates the process and the scope of the project, the narrative will explain the process in layman’s terms.
The Claim subsystems transaction process consists of data from the Policyholder. Since management reporting under Claims is limited, it consists of mainly Claims reports and queries. Claims reports and queries are further divided into: claim master listing, claim by policy, claim by vehicle type, rejected claim, claims without estimate, claims against a policy query, estimate for a claim query and claim payment query.
The Context Diagram also is defined by its term. It consists of context of the entire system. In our case, the context diagram shows that Potential Policyholder or the applicant applies for a policy. Big Wheel accepts the application stores it and sends a request to DMV for verification of the owner. Depending on the response of DMV, it accepts or declines the policy accordingly. Similar types of request regarding accidents and other record of applicant are sent to the Police department and according to their response, the policy coverage and acceptance are processed.
The data flow diagram is an expanded version of the context diagram. The data flow diagram illustrates how the data flow throughout the system, from the input and output of the process. In our review, we identify three processes: Application process, Policy modification and cancellation process and the Claims process. The Application process is where the applications are processed through the verifications from the DMV and the Police Department.
The Policy modification and cancellation consists of verifying if the policyholder and the policy. A refund or balance due is calculated and either a refund or an invoice is sent to the policyholder and the policy is modified or cancelled. The Claims process is more involved as compared to the other two processes.
It consists of accepting a claim application, verifying it against the policy and then the processing of the claim. If the claim matches the coverage of the policy, then the claim is processed other wise it is rejected. If an accident is reported in the claim, the report is sent to the Police Department for their review. Should the policyholder be at fault in the accident, then the claim is paid and the policy is updated to reflect an increase rate for the next invoice.
The location connectivity diagram reflects the network structure to its basic form. The central headquarter housing the newly created Information Systems department will maintain and administrate the overall network operations. As described, each location will be operating within its own Local Area Network connected over the Wide Area Network.
Each office will have its own main servers and hubs connected over a gigabit connection. The connection between a user and the server under the client-server environment will be connected on 10/100 megabyte wiring. The backbone wiring the entire WAN, for ensured speed and uninterrupted data flow, will be over an ATM (Asynchronous Transfer Mode) wiring.
The Policy and Claims database for the entire company will be on Oracle servers located centrally. There will also be an Oracle server dedicated for the Payroll department located at the Waterloo office. The central database will be compatible to the Department of Vehicle’s database server. This will alleviate any transmission problems caused by incompatibilities. In the headquarter office, there will be a Remote Server authenticating the mobile Insurance Agents.
There will be an Intranet environment to support these telecommuters. Likewise the central database will be compatible to the web enabled front-end application for which the agents will use.