Client: Accident Fund Insurance Company of America Challenge: Expand workers’ compensation business throughout the U.S. Solution: Outsource new workers’ compensation business processing to CSC, then replace in-house system with CSC’s POINT IN, hosted by CSC. Results: Expanded workers’ compensation business to 43 states and doubled revenues in five years without adding staff. Want More Information? Click here to learn more about CSC’s outsourcing services or contact us. Click below to download the full case study (PDF). Download the file

Accident Fund Insurance Company of America has been Michigan’s leading provider of workers’ compensation insurance since being founded as a state-owned insurance fund in 1912. In late 1994, Accident Fund was purchased by Blue Cross Blue Shield of Michigan, in the largest privatization of a state-owned agency in U.S. history.

Within five years, Accident Fund was ready to capitalize on its workers’ comp experience and expand throughout the United States. There was only one problem. The company was ready for growth — but its computer system wasn’t. Accident Fund’s mainframe policy administration system was a decade old and had been custom-made for the Michigan market.

Combining Technology with Industry Knowledge
Accident Fund chose CSC’s business process outsourcing (BPO) services to expand its business outside of Michigan. In the first five years of Accident Fund’s expansion, the company grew from $203 million in premium in Michigan to nearly $500 million in premium in 43 states — without hiring additional personnel. “What CSC brought us was not just a better system but actually some insurance expertise,” said Andy Hazel, business development manager for Accident Fund. “CSC gave us the ability to ramp up quickly and establish the best way to enter new markets.”

CSC’s BPO operations processed business from the new states using POINT IN, the leading policy administration system for midsized P&C companies that supports all personal and commercial lines of business. Accident Fund grew from five new states in the first year to 30 states by year three, which was when the company transitioned the business to an information technology outsourcing (ITO) arrangement with CSC.

IT Hosting Support for In-House System
Accident Fund was so pleased with the efficiency of POINT IN, the company licensed the system in 2004 for its Michigan business. By hiring CSC to host the system, Accident Fund saved money that would have been needed to purchase hardware as well as hire and train new IT staff. “POINT IN really brought the functionality that we needed. It was ready to go for all of the states we wanted to do business with, even multi-line. We only write workers’ comp right now, but if other commercial lines are in our future, the system is ready to go,” Hazel said. “Also, the usability and short learning curve for new employees are key features of the POINT IN system and they make a big difference.”

“We knew from the beginning that the Internet was the way that agents want to do business with us,” Hazel explained. “CSC’s POINT IN solution was absolutely essential. Our field staff can interact with the agencies, and the agencies have access to our business 24 hours a day.”

Setting the Stage for Growth
At a time when competitors were leaving the workers’ comp market or struggling with downgraded credit ratings, Accident Fund maintained its “A” rating from A.M. Best and was named to the Ward’s 50 list for P&C carriers, demonstrating strong earnings performance and excellent capital position.

“Since 2000, we’ve more than doubled the amount of business we write. We’ve experienced a great deal of growth, but it has been strategic, controlled growth, and CSC has been an integral part of our success,” Hazel said, adding, “We’ve outperformed the industry in both our combined ratio and loss ratio, and our expenses have been lower than the industry average, too.”