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Midsized insurance firm among first to implement SAP claims system

SOA and industry-specific functionality are among the reasons ICW Group is consolidating its systems on SAP.

ICW Group is exactly the kind of business SAP needs to attract if it is going to reach its goal of 100,000 customers by 2010.

SOA and a new claims management application are among the reasons the San Diego-based insurance company chose SAP to consolidate its myriad systems.

ICW decided that reining in its dozens of disparate systems would help to differentiate it from other midsized insurance firms, according to David Hoppen, chief operating officer.

"We were hodge-podged all over the place," Hoppen said of the firm, which has about 700 employees. "We need to optimize our infrastructure and our system. But optimization is what everyone does. What we're really trying to do is differentiate."

SAP's insurance applications were the answer, Hoppen said. ICW recently purchased SAP ERP Financials solutions, its collections and disbursement application, and its claims management application. The full-service insurance company also purchased SAP's Business Intelligence (BI) tool to help facilitate its five-year growth plan, Hoppen said.

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In implementing its new software, the insurance company will be one of the first small to medium-sized businesses (SMBs) to use SAP's claims management application.

Hoppen said the company looked to the success of a much larger insurance company -- Cincinnati Financial Corporation -- that uses the software in making its decisions. The fact that SAP's claims application could consolidate Cincinnati Financial's lines of business sold them, he said.

"(SAP) is not so well-known in the claims space," he said. "But [Cincinnati Financial is] a company that's 10 times our size -- a $5 billion company."

ICW relied on a legacy system, and the siloed information technology landscape was holding the company back, Hoppen said. There was one system for claims and worker compensation, another for billing customers. The company provides autoworkers' compensation, catastrophe, commercial property and surety, and it is licensed in all 50 states.

Hoppen said that ICW looked at various options, including buying applications in separate units. Computer Sciences Corporation (CSC)'s Point IN software, designed for SMB property and casualty insurers, and Guidewire's claims and billing solution were among them.

But SAP would support ICW's SOA technology strategy, he said.

"We chose SAP because they had a robustness and the maturity in an enterprise space," he said, "and that was compelling to us."

ICW is planning to have the new system realized by July, a pace that impresses even SAP, Hoppen said. They're currently in the blueprinting phase.

The new system will benefit ICW customers, he said. Getting out bills is really going to be facilitated by the cash disbursement module, and the company will also be able to process worker compensation claims faster.

"[Customers will experience] a great deal of optimization in their relationships with us," Hoppen said. "It's going to really drive an incredible efficiency that should benefit the customer in a number of different ways."

Making strides in this SMB insurance market is also important for SAP, according to Jonathan Bobalik, director of IBU Insurance (Americas) for SAP.

"It's a very important part of the market for us," Bobalik said. "It's companies of this size that can't really afford to develop their own software."

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