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Comprehensive document management

There are countless good reasons to consider e-filing

By Brian Bartosh, CIC, LUTCF

Agencies can pull important client information from any number of sources—typical paper files, agency management system files, e-mails and even old T-files. And images? There is bound to be a mix of prints and electronic images throughout the office. Now if you could only remember where you put that data card from your digital camera!

Having documents in that many places creates potential problems. At the very least, it's inefficient and costly. Agencies may have multiple sets of files, taking up physical space in the office and hard drive space on its computer system. If the agency has multiple branches, that compounds the problem.

But there is a more serious problem lurking. If an agency has an errors and omissions claim filed against it and discrepancies in workflow are found, that agency becomes vulnerable.

Agencies need to take a closer look at developing a comprehensive document management system. Having a process for converting paper files to electronic documents and putting them all in one place will save you and your staff from the headaches associated with misplaced files, satisfy your initiative to be more environmentally friendly and make your operations more efficient and smooth. Perhaps more important, it could help keep you out of court.

The case for electronic files

According to the United States Environmental Protection Agency, the average office worker uses 10,000 sheets of copy paper each year. That translates to about 4 million tons a year. Despite the capabilities of computers and servers to store vast amounts of data for documents, paper usage is growing among insurance agencies. Underwriters may require more associate documentation with files, and agencies have to be the storage facility for all that information. What's more, an average of only 32% of those paper records is actually in use. The remaining amount comprises inactive records that aren't likely to be retrieved again. A document management plan that includes converting paper files to electronic versions allows agencies to recycle old paper files and save a tremendous amount of physical space.

But a document management plan isn't just about creating electronic files to replace paper ones. A comprehensive plan to manage documents goes further. It is about creating a more efficient office and improving workflow. You are managing all forms of documentation: faxes, e-mails, PDFs (portable document format), photos, T-files and even WAV sound files created from your office voice mail. You want to manage them with one process whether or not they're associated with a particular client.

With electronic files comes added flexibility. Agencies can use those documents in a multidimensional format, not just scan and view. Electronic files can be routed to other staff members through e-mail on desktop workstations. Or, in this age of increased mobility, documents can be sent to smartphones and tab computers wherever an Internet connection is available. And as they are being routed back and forth among staff members, notes can be attached electronically.

Creating e-files on the back end

When scanning was first introduced to agencies, back-end scanning was the preferred method for several reasons. It's called back-end because staff processes paper documents first and when they're done with them, they're then scanned and electronically filed. Generally, back-end scanning is cheaper. Inexpensive scanners (for as little as $300 each) could be installed at workstations throughout an office. This was a much more cost-effective option than using production-level scanners that used to cost as much as $3,500. Agencies liked the convenience of having several scanners throughout the office.

But back-end scanning had its hangups too. First off, each document had to be manually indexed. Early generation scanners were slow, often unreliable, took quite a while to warm up and were prone to paper jams. They took up already limited desk space. Scanning also disrupted workflow by pulling CSRs away from supporting customers.

As scanners have become more advanced and prices for production-level scanners have come down to under $1,000, agencies have been able to centralize their back-end scanning with production-level scanners. These scanners are faster and more reliable. And because fewer are needed, they don't take up as much space. Centralizing the operations means that instead of all CSRs within an office having to scan and file as the documents come to them, one or two handle the operation of all documents. More CSRs are then left to support customers.

With this type of scanning, staff is still working with paper documents. When they're done with them, they send the documents to be scanned and e-filed. An agency may be better at getting rid of paper and being more ecologically responsible. But it's just one filing system replacing another. An agency may have a more ambitious goal of saving more time, money and becoming more efficient.

Front-end scanning

If being more efficient is your agency's objective, front-end scanning is a better choice. Scanning is the first activity when documents are received at the agency. Then they are routed to the appropriate staff member to be processed. Agency staff works with documents in their electronic format, not the paper copy. Agencies don't have to deal with paper files any more if they choose not to. An agency can have one production-level scanner and designate who should handle all of the scanning. Once scanned, documents can then be electronically routed wherever they need to go, whether it's to a producer, account exec or another staff member. Those documents can then be grouped with all the other electronic files associated with a specific client.

With each paper document converted to an electronic file and routed to a staff member for processing, workload can be quantified. So if a principal notices someone's workload is disproportionately higher than others, he or she can re-allocate where necessary.

Perhaps the greatest contribution front-end scanning can offer an agency is added protection from E&O claims. Front-end scanning can provide a uniform process for document management that helps with accuracy in handling transactions.

On the other hand, a front-end type of operation isn't perfect either. Scanners are more expensive. However, fewer are needed. For the sake of uniformity, everything is scanned. That means junk mail too. But when an agency shows that there are no exceptions to the process, it helps guard against E&O claims. Scanning everything, though, means cleanup is required to delete unnecessary mail. And a change in workflow is required, which may take staff some time to get used to.

Whether you decide to employ back- or front-end scanning, converting paper files into electronic files means your agency or brokerage is on its way to ridding itself of duplicate efforts, going greener and saving money by producing a greater return on your automation investment. And by becoming more efficient, your business is giving itself the protection it needs to avoid E&O claims.

Types of Electronic Files

When agencies go paperless, it's not just a matter of putting text documents into an electronic format and storing them on your server or computer hard drive. You may have to pull files from the Web, store digital images and hold onto e-mails.

Each electronic file has what's called a file extension that indicates what type file it is. The extension is usually three or four letters after a dot. So a Microsoft Word document might be called "insurance.doc." The filename is "insurance" and the .doc extension tells you it's a Word file. The same goes for a portable document file, or PDF. That same document might be called "insurance.pdf." You will need the Adobe Acrobat reader software on your computer to view those kinds of documents.

Here is a list of other types of files you might have to work with:

Images. TIF images are usually black and white and might be more than one page long. These types of files are small and can be transported easily through e-mail. Microsoft Office has a TIF viewer built in. Color documents aren't possible with this format.

JPEGs are digital color images and perhaps the most widely used format for digital color images. Images taken from a digital camera are usually in JPEG format. They are quite a bit larger than TIF images and sometimes can be hard to transport through e-mail if they are large and high resolution.

BMP files are also known as bitmap files. They are also large color files. But they aren't desirable because they are frequently too big to transport through e-mail due to their size.

MAX files are the proprietary file types of a document management software program called PaperPort, which some agencies use for scanning documents. Since it's proprietary, you'll need a PaperPort viewer to open these types of files.

Internet. HTM files are Web files but aren't always viewable because any graphics associated with them may be broken off and saved separately. Not a desirable type of file to have.

MHT files are better for saving than HTM files because they include images and whatever HTML (hyper text markup language) code that accompanies them. When saving Web files, this is the format agencies should use because everything is included.

The author

Brian Bartosh, CIC, LUTCF, serves as president at Top O'Michigan Insurance, which has nine offices throughout Northern Michigan including headquarters in Alpena. He is currently chair of ASCnet (Applied Systems Client Network). Brian's core expertise includes marketing and workflow, and change management. He can be reached at


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