Guardian was founded in 1860 as the Germania Life Insurance Company. In 1917, the company changed its name to Guardian. A Fortune 400 company, Guardian is the fourth largest mutual life insurance company in the U.S., employing more than 5,000 employees, and approximately 2,700 independent agents and financial representatives in nearly 100 general agencies. Guardian’s IT department employs approximately 400 staff members as well as offshore partners. The company has specialized distribution channels set up by product line and has a diversified product portfolio for individual life, disability income, group health insurance and asset accumulation products.

Guardian’s new business process consisted of numerous discrete steps ranging from collection of prospect information using one tool, provision of illustrations with another, and entry of application data from paper applications into a third. Duplicate data entry, manual steps, and multiple handoffs characterized the sales process, often resulting in errors and re-work. Once a case was received in the home office, the process of underwriting and issuing a policy was largely manual and paper-intensive.

"Guardian’s process areas were like jigsaw puzzle pieces," explained Linder. "Each area, from underwriting to client management to reinsurance, had specific forms and processes that were designed as if they were stand-alone functions. These processes tended not to focus on the sources and destination of the data that they drew upon and the decisions or actions taken against this data at each stop along the way. As a result, a key objective of our initiative was to architect the workflow as a holistic end-to-end process and create automated links throughout that would ensure consistent handling of both process and data, thereby providing a complete picture."

Guardian’s Straight Through Processing solution offers a more streamlined and proactive approach. The system will move a case from its inception on the sales side, "straight through," to the end of the process, facilitating an integrated process that performs all steps required to place the new policy in-force, including automated interfaces to internal systems as well as external partners.

Agents who adopt STP will use laptops or tablet PCs to enter application information into an electronic "smart" application and will collect electronic signatures. The system will verify agent credentials, generate the proper electronic forms based on industry XMLife standards, and supply relevant customer information already captured for this prospect and sale in the client management and illustrations systems. Ordering and receipt of requirements will likewise be automated and a new imaging and workflow system will further enhance the underwriting and issue process, as well as supply a more efficient vehicle for record keeping.

Guardian’s goals for the STP program were straightforward—it had to benefit both the field employees and the home office. An expected reduction in cycle time will allow the field to receive commissions more quickly. Reduced cycle time also would enhance the capacity of the staff in the home office.

Other benefits include cost reduction for agency management, new business support, agent support, storage, underwriting and policy issue. Guardian also wanted to increase overall quality and consistency in field and home office processes. Benefits to the field will include the receipt of complete and correct forms, illustrations and signatures, consistent and correct requirement ordering and reduced errors, paper, and rework. In the home office, increased quality will help decrease skipped steps and ensure more uniform underwriting.

Once complete, in 2005, STP will provide improved service to its distributors and their customers, while reducing operating expenses and enabling greater efficiency in support of future business growth. "This technology can dramatically reduce costs in the home office," Linder said.

Several factors led to the development of the STP project. One was the economic environment. Like most companies, Guardian felt mounting pressure to cut costs and optimize efficiencies. The company needed to budget operating expenses wisely while remaining competitive and simultaneously setting the stage for future growth. "We saw our competitors consistently investing significant dollars in reducing cycle time," Linder said. "In order to maintain our position as an industry leader, we had to reevaluate our entire system."

Guardian also views STP as a tool to retain and acquire new producers. As younger, more technology savvy producers come into the work force; they expect enhanced tools that support their selling. Increasing the ease of doing business will enable Guardian to attract experienced agents whose carriers have abandoned or diluted the agent channel. The company also considers its customers’ expectations. "Implementing advanced technology such as STP is evidence that Guardian is a sophisticated, technologically-savvy company, and that we know what we’re doing with regard to building better business processes," Linder explained. Benefits of the technology also reach the end customers, who have come to expect an increased level of personalized and efficient service.

"Once it was clear that there was a strategic imperative for STP, the business stakeholders and IT joined together to form a coordinated approach for designing a solution," explained Wilamowsky. "While previous technology improvements had been geared toward the sales side, we would now be able to focus on operational efficiency in order to tie our sales tools to what was happening in the back office." The underwriting and issue departments were evaluated to mine both the opportunities and the existing issues. Guardian created an improvements team comprised of individuals that represented divergent departments. "We handpicked a team of underwriters, team leaders, and IT thought leaders," Wilamowsky said. "The team met regularly with a mandate to scrutinize current business processes. One cannot easily drive a complex technology project without first establishing a consensus among the business of what the business needs are and what you hope to accomplish."

The team worked together to understand the value each part of the new STP process could bring, an understanding that enabled them to define the project and plan the order of deliverables. "We gathered requirements and began to investigate the technology and implementation options," said Wilamowsky. "A business case was developed, vendors were evaluated, and we eventually selected NaviSys as our strategic partner in this initiative."

In defining the scope of the STP plan, Guardian realized that not all of the needs of the many stakeholders could be immediately satisfied. Though the overall concepts of the plan were approved, the team leaders had to decide what to build, in what order, and in what time frame. The field was at the top of the priority list, according to Wilamowsky. "Our field is a competitive strength for us; so we wanted to remain very committed to our agency distribution system. Our agents, however, are independent and the plan had to take that into account. Limiting our system to one kind of software or piece of equipment wouldn’t make sense for our distribution system since the agents range drastically in their processes and their willingness to adopt technology. Our role is to make the tools available and encourage field adoption, however, we had to provide alternatives that would still ensure that the company could thrive and benefit even if not everyone used all the components. We had to demonstrate that the new system would benefit everyone involved," she said.

Having recently undergone reorganization, there were concerns about how much additional change could be successfully managed in the company’s underwriting and issue teams. "Underwriting is a core competency here at Guardian, and one of our great strategic advantages. It was important that we had buy-in from the underwriting team. We needed to demonstrate the value of STP to the team and introduce it gradually." Using this approach, support for the project has been growing. "The project will adapt to the nuances of the interaction between agents and the home office, so we can derive maximum benefit while accommodating the various preferences of the system’s users," said Wilamowsky.

Guardian took care to ensure its producers and internal stakeholders did not feel threatened by the changes or pressured to use the technology. "There was no area where we forced them to go further than they wanted to," Wilamowsky explained. "Technology is an enabler. Take ATM machines. Twenty years ago, ATMs sat idle while the line for the bank teller was out the door. Today, many people will say they haven’t interacted with a teller in years. We wanted to show our stakeholders that this project was compelling and non-threatening."

Yet another area of focus was the IT department itself. An integrated team representing Guardian’s security, architecture, imaging, infrastructure, and networking areas participated in the evaluation of vendors for the STP project. "We had recently engaged in an enterprise-wide project where we evaluated the enterprise architecture at Guardian, so we knew what we needed for this project," Wilamowsky said. "We were looking for something that would work in a Java J2EE environment, with a security framework, that was browser-based and had reusable components. The solution also had to be compatible with enterprise initiatives such as data warehouse and customer relationship management." The team knew they needed an XML-based middleware to help provide independence from legacy systems and allow flexible integration. And because Guardian has so many legacy systems, it wanted to separate the new development as much as possible from being tightly bound to these legacy systems.

"Another important consideration for our implementation was that our application needed to be able to support disconnected users. We wanted to have only one version of the software for disconnected and connected users," Wilamowsky said. "So in analyzing vendors from a functionality, business and architectural standpoint, it had to please all of our various stakeholders, including our technologists."

Guardian wanted a solution that would meet all of its needs without customizing a software package beyond recognition. "We saw that the NaviSys solution architecture provided an external calculation engine, business rules engine and a workflow system. These different components are expected to be configured as part of the implementation, and we liked that," said Wilamowsky.

In developing the project timeline, Guardian tried not to tackle too much at a time. The project began with the business requirements, selection of the vendor and then was set up in multiple phases. The company is currently starting a production pilot with several agencies and the Underwriting/Issue area. "We started with agency offices as the first group entering cases. These people are the most familiar with Guardian’s policies and procedures. We began with the e-app, and then began to put the workflow and underwriting pieces in place. We also limited which products we want to start out with, so we would not have to deal with the automated forms for all of the products at once," Wilamowsky said. "We started with our traditional rather than our variable products, which is why we didn’t have the complexity of suitability to deal with at first. In phase two, we will be expanding participating agencies, products, and interfaces to enrich the offering."

The team identified several best practices while implementing its STP project. First, they established business and technology sponsorship through an explicit governance process. "We established the governance process before we actually put the team together and did any real work. Guardian’s CIO and the business head enthusiastically took on the role as the executive sponsors, which immediately legitimized the project and assured availability of key knowledge resources," Linder said. "The head of underwriting, and co-chair of the taskforce, and I have monthly meetings to review status and assure that we are going after the highest priorities to the business."

The second element for a successful process is to select the right partner. "We had literally hundreds of different criteria, mapped to three high level categories—the architectural fit, the fit of the solution to the problem and the partner’s industry experience. We were looking to have flexibility and the ability to add more functionality to the solution. We wanted somebody who was willing to work with us, not as a vendor but as a partner. As we looked at those three categories of criteria, NaviSys met every category," Linder said.

Carefully managing expectations regarding expense and timing of benefits capture also proved to be critical. "The message that we are trying to get out is that this scheduling exists in phases but the bulk of the investment and costs is going to be up front. We laid out a foundation, set up a governance and the metrics," Linder said. "We had to do all the investing, requirements and design all the business processes for each area up front. So as we go through it we can clean up our back office so that we can handle the enhanced sales process and expect an increase in volume, then begin to capture the efficiencies inherent in a more automated, error-free process."

Next came establishing reporting and metrics. "Consistently through the business case, it is important to partner with the business to tangibly demonstrate that the benefits are being captured. The governance process assured that we defined the metrics right from the beginning, with the accountabilities for capturing the benefits clearly understood. On the project side, we produced regular reports highlighting progress against expected schedule, cost and scope," Linder explained. "On the business side, based on the attributes of the business case, we built relevant metrics that for example would track the number of electronic applications, the number of requirements, the percentage that are ordered electronically through the workflow engine, enhancements in cycle time, reduction of omissions and the cost of processing a single application. The steering committee that was set up to help this process agreed that these are the metrics that we have to face."

Lastly, Guardian recognized the importance of maintaining ongoing communication, managing expectations and sustaining sponsorship from management throughout the life of the project. "We have scorecards, metrics, status reports and monthly meetings with the steering committee," Linder said. "We produce minutes, conduct follow-ups and spend a lot of time communicating our thoughts. Because it is a career agent distribution network, there are Leaders Clubs and General Agents conferences; so wherever we have the opportunity, we share status, highlight the importance of this project, especially what it means to them."

Guardian expects the completed STP to be a picture of success. With a detailed plan and ongoing communication, in the end everyone should receive what they were promised, with no surprises. "Guardian has set very impressive goals for the next ten years," Linder said. "We view this as a win across the value chain."

"We have positioned this from the beginning as something that is critical for the business to achieve," Linder said. "Once completed, STP will create a true ‘win/win,’ allowing Guardian’s field agents to receive direct, tangible, quantifiable benefits, while its home office will have reduced cycle time, reduced costs, increased quality and increased productivity."