Headquartered in Melville, New York, AutoOne Insurance was formed in 2001 to provide limited assignment distribution (LAD) service to New York's automobile insurance companies. Since its inception, AutoOne, a division of the OneBeacon Insurance Group, has grown rapidly and currently provides a broad spectrum of automobile insurance products from Assigned Risk to voluntary automobile offerings, including private passenger, physical damage and unique take-out policies that help to depopulate the New York Assigned Risk Plan pool.
The Assigned Risk business is a difficult and unique segment of the overall auto insurance industry. Insurance companies are "assigned" a certain percentage of the assigned risk business through their state's auto insurance plan (AIP). Because this type of insurance may not be their core business, they can opt to transfer that business to a LAD servicing carrier for a fee. Managing the LAD business can be as complex as the business itself.
The Assigned Risk market, coupled with the continually changing insurance rules and regulations, created the opportunity for AutoOne to help other companies address their Assigned Risk burden. Despite established competition, AutoOne quickly became the second largest LAD servicing carrier in New York and further expanded its LAD services to New Jersey in 2003. Many companies consider these markets to be some of the most difficult auto insurance environments in the country due to organized fraud and abuse, resulting in higher costs for insurance companies and consumers. The New York and New Jersey markets account for nearly 85 percent of Assigned Risk auto premiums serviced in the country through LAD carriers. Our success in these difficult markets, coupled with an employee base whose extensive experience lies in servicing LAD and private passenger auto markets, opened the door for further expansion into seven new states and additional markets in 2005.
A large number of businesses struggle with the standard activities of planning, forecasting and reporting, and AutoOne did not want to follow that path. The complexity of the business model - with its ever-changing nature and need for fluidity - required an approach that was both regimented and flexible. We knew that simply looking at forecasts, actuals and reports on a quarterly basis would not give us enough time to react to the market and make changes where and when appropriate.
Because a planning and reporting system would provide financial information and statistics to the executive team regarding the company's performance, the CEO, CFO and all departmental vice presidents would have to be included in the process from the beginning to make sure that the system was compatible with their skill sets and work style.
My team was charged with finding a dynamic budgeting and planning solution to meet AutoOne's current and future needs. The key requirements included being user friendly, having a quick and easy implementation process, providing real-time results that can be updated on the fly, and offering a platform that could expand and grow with our business - while being reasonably priced for both initial investment and maintenance.
After evaluating many solutions on the market, we narrowed our selection to a platform that worked seamlessly with Microsoft Excel and had fluid access to real-time data. Microsoft Excel was a key requirement because it is the preferred tool for financial planning within the financial and executive team. Access to real-time data was a must-have for us due to the dynamic nature of our business. Our executives wanted to be able to do real-time slicing of the data for live LAD budgeting, forecasting and reforecasting.
After researching the budgeting and planning software products on the market, we chose Applix's TM1 solution. Once the decision was made, the AutoOne finance team spent the next three weeks training and implementing for utilization on our first pass budget. In the past, we used a series of Excel spreadsheets that took weeks to update and validate. Once each business unit updated its spreadsheet, finance would consolidate all the spreadsheets into one, producing the company-wide budget report. A first budget pass could take several weeks to complete. With TM1 in place, we saved 80 to 85 percent manpower time by allowing the software to automatically update the report.
As we move forward, our matrix for success is based upon how quickly we are able to produce our financial results, the level of detail delivered by the system, and how quickly we can respond to management requests for ad hoc reports and information. The most critical step to a successful performance management initiative is to build a solid plan that ensures the platform you select will be flexible enough to account for future growth and changes to your organization.
The ability to plan for short-term success with a long-term approach is built upon forward-thinking tools incorporated into corporate business performance management.
TM1 is a proven, multi-dimensional business planning, reporting and analytics platform for powering strategic analysis of financial, transactional and operational data, and for unifying business models. According to The OLAP Survey 4 (www.survey.com/olap) by Nigel Pendse, TM1 scored the highest rating in goal achievement, better decisions and better reporting.
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