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Presented By:

DEBRAJ ROY
SHIVAM AGRAWAL
TANVI BALUJA

SECTION-F
 INTRODUCTION
v One of the largest health insurers in the US.
v Customer database misquoted the no. of
customers to extra 9 Lacs.
v In 2002 faced many problems Including
customer service & profitability.
v Membership fell from 13.3mn to 12.4mn by
the end of 2001.
v Revenues = 19.34 billion $ and Loss 398 mn $.
 Reasons for failure

v Restructuring of IT &CRM systems at its

healthcare division.
v Project was monitored by CIO, Andrea Anania.
v Millions of dissatisfied customers resulting to
a loss of 6% Customers in 2002.
v In Shareholders meeting the reasons cited for
the failures: greater cost usage &
misconceptions about the timing of economic
benefits from the project.
 
 


vThe IT systems were nearly two decades old

vCustomer service representives found it difficult to process the 120

mn claims per year that Cigna received using the old system

vAnania planned to integrate the system that would

o generate the bills across products and divisions
oProcess the medical claims of customers
oProvide case histories of all the customers
oFacilitate exchange of information with customers
Contd͙
v It pooled 1400 employees from it͛s IT department to form
a team
vIt planned to deploy two platforms and then connect them
to each other so that the front-end application of claims
and eligibility would be integrated with the back-end
applications like banking and billing
vOn Jan 29,2001, the Insurance Commissioner of Georgia
imposed a heavy fine of US$3,00,000 because of delayes of
payments of medical claim benefits to doctors
vAnania decided to move into a platform of smaller groups
of 10,000 customers
 

 
vRetrieval of data from the back-end systems by front end systems

vDifficulties in obtaining information relating to health coverage plans

vCigna was unable to confirm the registration to customers for many days

vOwing to problems in the membership database, Cigna issued identity cards

with incorrect numbers which led to rendering of incorrect services

vNew reps hired for service centre to manage increased inquiries, which were not
properly trained. The problems further compounded.

vHeavy competition led to decrease in premiums

vNet loss of US$877 million by the end of sept 2002 as against a net income of
US$ 270 million in 2001

vAccording to a survey , customer dissatisfaction was highest at Cigna.


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vA web portal made by company with the collaboration of Yahoo! and Sun
Microsystems Inc (Sun)

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vmycigna.com portal launched in june2002

vThe site provided information regarding various products that helped users to
choose a suitable plan, select or change doctors online, talk to nurses online,
order medications and more.

v20 experienced application developers hired to rectify the glitches in the IT

project

vThey tested the systems rigorously and sorted the back-end consumer
database. Front end applications could extract data from back end systems
which enabled the service personnel to handle problems effectively.
vThe new systems enabled the service reps to process medical claims quickly
and accurately and render efficient customer service

vLaunch of CIGNATURE6
YOUR PLAN. YOUR CHOICE

Primary
Care
Physicians

Medical
Manageme Network
nt    



6

Benefit
Funding Design
§UESTION 1: What Cigna could have done to execute the programs more
effectively n efficiently?

vCommunication with employees about the new system benefits and working.

v Constant monitoring of the process of integration.

vPilot test in real environment and then transfer old systems to new platforms in
small chunks.

vSort and filter the existing data, prior to migration, to suit the new front end
application.

vKeep the customer ( actual user) of the application while designing.

vTrain the service reps adequately to deliver efficient customer service.