Avoiding a Rules Hangover

Summer holiday weekends ahead have my thoughts drifting to happy times with friends and family that will undoubtedly include raising a glass, or two, or more. Away from work and enjoying great company it’s easy to lose count, but the fun times can fade upon waking the next morning with a splitting headache.

It’s not so different with imbibing the magic elixir of business rules to increase consistency and accuracy in insurance processes (well maybe it’s a little less fun than partying with old friends). Rules have a wide variety of valuable applications from underwriting guidelines, to billing write-offs, suspicious claims detection and assignment of tasks to the best suited staff. However, it is possible to get carried away with too much of a good thing. Reflecting on the experiences I’ve had since the 1990s, working with insurers using rules automation, I’ve come up with a few suggestions.

Moderation is good, especially when starting out. Like my early college days, some carriers have gotten carried away with too much of a good thing, writing huge numbers of rules in their initial implementation, only to unwind some of them later after discovering they were triggering too many follow-ups and exception checks. Instead, get a core set of high priority rules in place, then benefit from real experience and feedback after going live to tune and augment them as best suits your culture and environment.

Look out for your friends. I don’t mind a friendly reminder if the cold ones are going down too easily. Because modern systems include tools that make it relatively easy to maintain rules, there is a risk of unintended consequences if a rules author implements changes in isolation. So it’s a good idea to have safeguards in place in the form of reviews and testing of rules before they go live in production, where your valued customers and producers will feel the effects. While newfound freedom to change rules themselves, without waiting on IT, can sound quite intoxicating to business people, for some types of rules they’ll still need to coordinate with colleagues in IT to make sure other systems stay in sync. A great new policy option quickly mixed in through a product configurator won’t be so great if back-end systems suffer indigestion trying to account for it.

Cumulative effect matters. One or two drinks, or new rules, may go unnoticed, but the accumulation of many could have a real impact. It’s good to remember that we humans aren’t always as quick as modern systems to embrace changes. When changing rules, don’t overlook communication and transparency so your agents, brokers and customers can understand what’s happening and why when they feel the impact of changes in your company’s processes or appetite.