ideas insurance business process management

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IDEAS SOLUTIONS| D-06-2009

IDEAS Insurance BPM

Business Process Management

Solutions

Business Process Management

Component Library

for Insurance Industry

IDEAS Consulting Group © 2008-2009

www.ideasgroup.com.ua



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INTRODUCTION

IDEAS Insurance BPM is the universal business process component library for the insurance

business. IDEAS Insurance BPM can be used as the common framework for the business

process optimization and process deployment in the insurance companies. IDEAS Insurance

BPM is SOA-compliant and consolidates best practices of insurance operations.

IDEAS Insurance BPM includes the following key components:

Business Processes Models (BPM)

IDEAS Insurance BPM framework encompasses more than 200 typical business processes

and sub-processes from the major operational blocks of insurance business. The description

of business processes is provided via the BPMN notation.

Business Objects Models (BOM) IDEAS Insurance BPM provides the unique insurance business objects set integrated within

the business process models.

We have documented more the 250 classes with the data structure description and the

incorporated insurance business logic. All the insurance business objects are linked to the

corresponding business process models.

Insurance Products Definition (IPD) IDEAS Insurance BPM uses the general pattern for the insurance products definition via the

XML/XSD standards. An insurance product is generally defined by more than 500

parameters and business rules. IDEAS Insurance BPM also includes product templates forthe custom insurance lines of business, such as motor insurance, homeowners insurance

etc.

IDEAS Insurance BPM component set is implemented in the integrated business process

modeling environment - TIBCO Business Studio. Using the TIBCO Business Studio it is

possible to customize and configure the pre-defined process components to meet the

specific needs of an insurance company for the BPM and software development.

IDEAS Insurance BPM is developed by the IDEAS Consulting Group as the result of the

extensive business and IT consulting experience in the insurance sector. All rights for the

IDEAS Insurance BPM component library are reserved by the IDEAS Consulting Group.

Best

Practicesof Insurance

Business



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BUSINESS PROCESS MODELS

IDEAS Insurance BPM includes the detailed insurance business process models implemented

in TIBCO Business Studio modeling environment based on BPMN 2.0.

A typical business process from the IDEAS Insurance BPM Library consists of the following

components:

Human workflows

Data flows and business objects

Services provided by the software applications (service tasks)

Events. The business process models are designed via the event driven architecture.

Business processes are interacting through message exchange. The following types of events

are supported:

Start events: waiting for the external participant’s message, timers, manual process

initiation by the user

Intermediate events: waiting for the external participant’s message, timers, complex

events

End event: process end message, signal event.

Sub-processes. The complex business processes include imbedded sub-processes. IDEAS

Insurance BPM also includes the set of independent sub-processes which could be executed

within the processes of various insurance business blocks.User Roles. The business process models include more than 70 user roles grouped by

the corresponding process blocks. User roles can be defined based on the various decision

making rules. We also provide the description of user registration and user task assignment

business rules.

Business Rules. IDEAS Insurance BPM contains the following key business rules types:

Rules of the business process sequence flow

Rules of the task completion

Timer events on tasks and sub-processes

Task assignment rules for the business users

Calculation and validation rules within the set of IT services

BPM



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Taking into account that business processes parameters vary for the different lines of

insurance business, the business rules are divided into two groups:

General business rules: rules that are not associated with the certain insuranceproduct or business line

Product specific business rules: rules that are defined for each insurance product or

product group separately.

Business Objects. Business process models are integrated with the insurance object

model (BOM). Each process task is associated with the business objects, which capture the

corresponding information flows and the business rules. For the more detailed description

of the business objects modeling issues please refer to the section «Insurance Business

Objects (BOM)» of the current document.

BPM



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IDEAS Insurance BPM Library includes the following business process groups covering the

major areas of insurance business:

Sales (20+ processes), incl.:

Office sales

Policy registration under agency sales

Cross-sells

Insurance contract renewal

General insurance agreement

Client registration

Policy Administration

(15+ processes), incl.: Addendum registration

Insurance contracts and addendum validation

Insurance premium processing

Original documents control

Underwriting (20 processes), incl.:

Registration of signatory limits

Control of underwriting authority limits

General underwriting process

Underwriting control of agency sales

Identification of cumulative risk

Contract verification by security service

Claims Administration (40+ processes), incl.:

First notice of loss

Claim registration

Property damage inspection

Loss amount calculation

Claims investigation

Documents collection

Approval and payment of insurance claims

Activation of the loss payment order

Coordination of loss settlement with the third parties

Control of the loss payment



BPM



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BPM

Subrogation (15 processes), incl.:

Registration of the subrogation case Pre-trial settlement of the subrogation claim

Preparing the document package for the subrogation claim

Subrogation claim settlement in the courts

Ceded Reinsurance(30 processes), incl.:

Control of reinsurance placement

Reinsurance submission

Registration of facultative reinsurance contracts

Reinsurance rules control

Registration of reinsurance treaty contracts Administration of reinsurance treaties

Bordereau processing

Reinsurance premium processing

Reinsurance claims management

Assumed Reinsurance(10 processes), incl.:

Registration of general agreement of the assumed reinsurance

Registration of inward reinsurance treaties

Bordereau processing

Sales Channels and Commissions (10+ processes), incl.:

Registration of sales channels

Registration of agents agreements

Registration of partner agreements

Calculation of agent commissions

Agents reporting

Monitoring of the agents reports



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Finance (20+ processes), incl.:

Insurance incoming payment accounting

General process of outgoing payments accounting

Accounting of the insurance operations

Insurance reserves accounting

Insurance Products Development (10+ processes), incl.:

Registration of insurance products

Configuration of insurance object parameters

Configuration of insurance coverage parameters

Configuration of insurance rate rules

BPM



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INSURANCE BUSINESS OBJECTS

Insurance Object Model (Insurance Business Object Model, BOM) is systematic

description of the insurance data structure and business logic, which could be used during

business process execution. The usage of insurance business object model provides theincoming and outgoing data flows for the business processes.

Object model IDEAS Insurance BOM is the set of special classes, which reflects the

interconnections within insurance business information. The examples of provided classes

are as follows: «Insured», «Department», «Insurance Cover», «Insured Object», «Insured

Event». Each of the classes consists of the set of internal data types and operations,

representing the corresponding business logic.

Business object model is design in TIBCO Business Studio environment using the

UML 2.0 standard.

IDEAS Insurance BPM library includes following class components:

Acquisition (10+ classes) In current section presented the major classes considering information and

business logic of agents’ cooperation and commission processing.

Underwriting(50+ classes) In current section presented classes interrelated with underwriting and

insurance product developing processes.

Departments (10+ classes) Classes and business logic considering company’s organization structure.

Documents(10+ classes) Classes of the current section are corresponding with electronic document

flow with business process models.

Reinsurance(40+ classes) Classes of the current section present data and business logic of the

reinsurance treaty agreements and the reinsurance policy development.

BOM



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INSURANCE BUSINESS OBJECTS

Sales(15+ classes) Classes in current section concerned with sales processing and distribution

channels management.

Maintenance

(10+ classes) In current section we present classes interrelated with the processes of

insurance contracts maintenance.

Party(10+ classes) Current section provides the supporting classes considering party types as the

participants of insurance business processes.

Loss Adjustment(30+ classes) Classes of the current section related to the process of loss adjustment and

regress processing.

Finance(30+ classes) Classes of the current section present data and business logic for the

correspondence between operational insurance and financial area. We provide classes for

insurance payments processing and various insurance operations registration.

Insurance business object model IDEAS Insurance BOM had been developed in the sense

object-oriented design and could be implemented within the projects of business processes

optimization IT solutions development for insurance industry.

BOM



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INSURANCE PRODUCT DESIGN



IPD

One of the major processes set in insurance industry is the insurance products development.

IDEAS Insurance BPM enables you to design products based on more than 500 different

parameters. As the result insurance company achieves the environment to set up business

rules on the insurance products level. That means the flexibility in business processes

adaptation due to changing market conditions.

IDEAS Insurance BPM library provides the set of data schemes, which could be used in

insurance products design. All the data presentation is available at the XSD-schemes

format. Certain insurance products specifications are generated resulting XML format.

The data structure of insurance products is presented at the following two levels:

General level. The current description level provides the general data scheme and

business logic presentation, which is common for all insurance business line and insurance

products.

Custom level. The current description level provides the general data scheme and

business logic presentation for the individual insurance line of business. The corresponding

data types specific for lines of business inherit abstract data types form the general level.

As the result following sets of parameters are available for insurance product design:

General insurance product parameters General parameters for insurance products identification in the wide set of insurance

products.

Insurance objects parameters Current section provides the objects’ parameters which could be covered by insurance

contract within the insurance product logic.

Insurance cover parametersInsurance covers’ parameters are the generalization of insurance rules for the certain

insurance product. Current section includes:

Parameters for insurance sum and cover limits

Parameters for insurance period

Deductible parameters

Rating parameters

Coefficients set up



INSURANCE PRODUCT DESIGN

IPD

Individual underwriting parametersCurrent section provides parameters for the individual underwriting of insurance contracts.

Acquisition costs calculation parametersCommission calculation parameters and acquisition costs policy configuration.

Reinsurance parameters

Current section includes the limits and reinsurance policy parameters.

Loss adjustment parameters Workflow management and timers for task completion within the loss settlement process

considering certain insurance product. Furthermore we provide the set of business rules for

loss amount calculation and loss payment.

Insurance policy parameters Within IDEAS Insurance BPM library we provide the set of general parameters for insurance

company policy configuration. These parameters are common for all insurance products

and examples are as follows:

Underwriting and reinsurance policy

Cross-sell policy

Renewal policy

Policy of addendums

Financial and accounting policy

Reinsurance treaty contract parametersFor the further detailed presentation of reinsurance policy configuration rules in the IDEAS

Insurance BPM library we provide the configuration set for reinsurance treaty contracts:

Configuration of reinsurance program

Calculation and processing rules for reinsurance premiums

Maintenance parameters for reinsurance treaty contracts

Loss adjustment parameters for reinsurance treaty contracts
