In a move to boost business growth through expansion of technology, Aflac is positioning its One Day Pay program to compete for insurance business by paying certain qualifying insurance claims in a single day. Aflac expects the program, which the insurer launched six months ago, to process 2 million One Day Pay claims this year alone, according to Aflac CIO Julia Davis.The program is intended to attract additional customers as well as improve satisfaction levels, says Davis. The program illustrates a change that many such companies are embracing wherein CIOs are leading the charge of teams utilizing Agile software development. In doing so, companies make possible the quick turnaround of claims-which in this case, has changed the way that Aflac's information technology group works overall, Davis said.
In One Day Pay, customers use a Web portal to file claims and upload supporting documents, submitting scanned images or photos taken with smartphones. If material is submitted by 3:00 p.m. Eastern time, Aflac can process it by midnight, with a payment mailed or deposited directly into the customer's bank account the next day. This beats Aflac's already impressive average processing time of 2.1 business days.
The system has a soft launch in October 2014, yet announcements and marketing were not conducted until last February, giving the company time to allow time bugs to surface, Davis said, adding that she has seen no major problems.
Aflac had to set up systems for direct deposits and for accepting digital photos and scanned documents. Before, processing relied largely on faxes and manual data entry, she said. About 70% of Aflac's total claims are eligible for One Day Pay, including claims for hospital stays, cancer treatments and accidents. More complicated situations, such as those for life insurance payouts, and events that require physician or employer signatures are excluded, she said.
Dan Amos, Aflac's CEO, took a special interest in the project, talking it up to financial analysts in recent earnings calls. Davis' original timeline for completion called for 18 months of development and testing time, which didn't go over well with Amos, she said. That estimate was based on using traditional waterfall methods, noted for its focus on predetermined specs and long development cycles, and having IT staff devote only part of their time to the work, which is how Aflac had historically tackled new projects, she said.
"He asked me what it would take to compress the project time frame," Davis recalled. "We need to get [claims processing] to one day and get it there before someone beats us to the punch."
She then reworked the estimate for Agile development, focusing in particular on designating business counterparts to provide continual feedback to technology staffers and meeting a series of quick milestones. She also sequestered a technology team in a war room to work on nothing but One Day Pay. The project was complete in six months, she said. Aflac now uses these aspects of Agile in other customer-facing development projects.
Aflac's agents in field offices had to adjust their own way of working, Davis said. "Agents were used to having personal touch time with the policy holder," she said. "We would get a check to the agent and he would deliver it to the policy holder. We took the human element out."
Although agents have lost that specific opportunity to interact with customers, she said, they now use One Day Pay as an enticement in selling new policies. Customer satisfaction has increased 4% since the rollout, according to a spokeswoman. Enrollment is up because of One Day Pay, she said, but declined to provide specifics. For the first six months of 2015 - the first two full quarters during which One Day Pay has been available - Aflac reported that overall revenue was down .08%, to $10.5 billion as of June 30, from $11.5 billion for the same period a year ago.