Analytics

SC BLUES WINS CALL CENTER TECH AWARDBlueCross BlueShield of South Carolina, Columbia, S.C., took top honors in the "Best Use of Technology" category during the 3rd Annual Call Center Excellence Awards held recently in Las Vegas.

FEE REDUCTION FOR INSURANCE SERVICESThe Depository Trust & Clearing Corporation's (DTCC) Insurance Services New York business reports its first fee reduction in history, reflecting growing usage of its services. Insurance Services has automated linkages and data exchange between carriers and their broker/dealer, bank and other distributor partners who market insurance products.

With the 2007 business environment for North American insurance carriers looking relatively good for the second year in a row, according to Forrester Research Inc., insurance carriers have become slightly more generous in their IT spending. The Cambridge, Mass.-based research firm anticipates that IT spending in 2007 in the insurance industry will increase by 7%, compared with 5% growth in 2006.Efficiency and innovation will be the highest priorities, and the initiatives to support these priorities are utility-oriented projects such as infrastructure consolidation and disaster recovery. However, competitive pressures and technology-enabled opportunities will drive the need for innovation in Internet and mobile applications as well as the replacement of legacy applications. Underpinning these changes will be a continued drive toward service-oriented architecture (SOA) for internal integration of systems, usage of services firms for transformation, and greater focus on process standardization.

Reinsurance firms are gripped by a series of major challenges, from increased consolidation in the industry to the rise in securitization and the greater risk primary insurers assume. Although the firms' brokers remain intent on winning clients by accentuating the personal touch, many reinsurers are aggressively adopting technology to confront the stiff obstacles they face.A principal new challenge for reinsurers is the rise in the use of securitization to support life insurance products. Both life and P&C insurance firms are turning to securitization to access capital markets, which has helped lead to a decline in recurring reinsurance since 2005, according to the recent study, "Emerging Trends in U.S. Life Reinsurance: Challenge or Opportunity," from the Hartford, Conn.-based firm Conning Research and Consulting Inc. While recurring reinsurance increased significantly from 1995 through 2000, it flattened out from 2001 until 2004, and then began declining in 2005. "To the extent that some primary insurers, initially several larger ones, use securitization as a substitute for reinsurance, it presents a threat to reinsurers," the study notes.

Remember the tale of the boiling frog? As the fable goes, a frog placed in a pot of boiling water will frantically clamber out. That same frog, however, will sit placidly in a pot of tepid water. It will remain there even as the water is slowly heated. Gradual changes go unnoticed, with the frog never recognizing the impending disaster as the water reaches the boiling point.Liken the pot of tepid water to legacy claims systems. P&C insurers are beginning to take a closer look at their systems, but will they act in time or wait on the sidelines and continue claims as usual?

A study of European insurance policy holders by Cambridge, Mass.-based Forrester Research Inc. revealed an overarching reluctance to manage their accounts online. Given many of the major carriers’ desire to drive more customers to the Internet for routine sales and service interactions, the data points to an uphill battle.

Hartford, Conn. - The economics of distribution channels in personal auto insurance can be difficult to understand, and this can present both opportunities and challenges in a softening rate market, according to a new study by Hartford, Conn.-based Conning Research & Consulting.

Philadelphia – To support high-quality patient care, Philadelphia-based Independence Blue Cross (IBC) is providing physicians with enhanced data about members with chronic conditions.

Needham, Mass. – Leaders in claims operations are beginning to break away from traditional processes and seek technology to assist them in managing a complex business process that has, to date, been extremely people intensive, according to new research from TowerGroup, Needham, Mass. Claims departments have been historically reluctant to adopt technology solutions, perceiving technology as incapable of duplicating the decision-making process of an experienced claims adjuster.

Washington, D.C. - NAVA has struck an alliance with Atlanta-based Financial Services Institute (FSI) to automate electronic annuity sales for independent broker-dealers. The alliance is the latest in a series of actions that play into NAVA's straight-through processing (STP) initiative, a comprehensive set of standards for managing new annuity business electronically. With the goal of reducing redundancies and costs, and increasing efficiencies across the industry, the STP standards, published in December 2006, address e-signatures, e-document management and regulatory acceptance, and includes built-in compliance capabilities to help prevent unsuitable sales. NAVA and the FSI, a membership association of broker-dealers that serve registered representatives who are independent contractors, will work together to augment the STP standards and enable broad adoption among FSI members. The group comprises 110 broker-dealer member firms with more than 130,000 independent registered representatives.NAVA reports that independent brokers represent a significant and fast-growing channel for the distribution of variable annuities - FSI members account for more than 36% of all annuity sales. Mike DeGeorge, NAVA's general counsel, told INN that one of the group's goals is to have broader participation from the independent channel. "FSI gives us access to a larger group of advisers," he says. "We have similar alliances with ACORD, and we've been working with the American Council of Life Insurers." DeGeorge says that NAVA already counts 19 of the top 20 insurers on its executive council, including Allianz Life, Hartford Life, Pacific Life, Principal Financial, Prudential Financial, Transamerica Life and Wachovia Securities. Major wire houses, such as UBS and Morgan Stanley, along with 10% of the bank channel, are also involved, DeGeorge adds. NAVA is also in the process of working with other trade associations as well as federal and state regulators to secure wide-spread acceptance and approval of STP."We want to let them know what we are doing and why we are moving to electronic commerce," DeGeorge says.The group is now working on implementation guides for the standards, model consent documents, and on suitability standards that provide common interpretations of regulatory requirements.This series of actions, reports DeGeorge, is designed to encourage more brokers, advisers and representatives to sign on. "Now it's paper intensive, time-consuming process," he says. "Reps feel it's a good product, but hard to sell because of all the paper. We want to make it easier for the consumer-make it less like buying a house with all the paper-retirement planning can be made very easy with this." Source: NAVA