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October 17th - 19th,
1999
"Internet Exchange Reduces UnitedHealthcare's Business Cycle Time by 90%"
The business cycle includes quoting, selling and putting coverage into effect. Since implementing the exchange, "I have seen a case go through in half a day," said Jeni McGill, vice president of health care economics at UnitedHealthcare. McGill spoke Monday at "Continuing the E-volution," A.M. Best Co.'s 12th annual insurance and technology conference. The exchange was launched through a partnership with ChannelPoint to allow brokers to electronically submit and receive proposals and cases. UnitedHealthcare, based in Minnetonka, Minn., undertook the project more than two years ago because it recognized its processes and distribution were inefficient and technology was an opportunity to reduce distribution costs and eliminate duplication of work, McGill said. "When we began, we said we weren't even going to look at our current processes," she said. As part of reducing total cycle time, the exchange has increased the percentage of requests for proposals received with complete data from brokers from 6% to 95% and reduced the average time needed to send a proposal letter from 38 hours to 30 minutes. The exchange includes five sites and about 250 brokers, McGill said. The projected annual net benefit once it is fully implemented is about $245 million. James Hollen, vice president, business development, for ChannelPoint, said expectations for the growth of business-to-business e-commerce, such as the UnitedHealthcare exchange, are high. In 1998, $8 billion of e-commerce was consumer oriented and $43 billion was business-to-business. By 2003, business-to-business e-commerce is expected to increase to $1.3 trillion. By using an Internet exchange, brokers can differentiate insurance carriers more distinctly, Hollen said. "Over time, we'll have fewer brokers, but they'll drive more volume for you," he said. By Sally Whitney |
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Electronic Ties That Bind:
By using a new Internet exchange to communicate with
some of its brokers, UnitedHealthcare has been able to reduce the business cycle
time with those brokers from 30 days to three days, a company executive said.