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
 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.
Best
Practices Business Objects Models (BOM)
IDEAS Insurance BPM provides the unique insurance business objects set integrated within
of Insurance the business process models.
Business 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 for
the 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.

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 BPM
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

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 BPM
BUSINESS PROCESS MODELS
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 insurance
product 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.

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 BPM
BUSINESS PROCESS MODELS
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

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 BPM
BUSINESS PROCESS MODELS
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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 BPM
BUSINESS PROCESS MODELS
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

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 BOM
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 the
incoming 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.

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 BOM
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.

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 IPD
INSURANCE PRODUCT DESIGN
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 parameters

Insurance 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

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 IPD
INSURANCE PRODUCT DESIGN
Individual underwriting parameters
Current section provides parameters for the individual underwriting of insurance contracts.

Acquisition costs calculation parameters

Commission 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 parameters

For 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

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