Customer experience

Hartford, Conn. - In the latest of several insurance-specific vendor mergers and acquisitions, Innovation Group, a U.K. provider of P&C outsourcing and technology, is acquiring Boston-based claims-reporting outsourcer First Notice Systems, Inc. from Concentra Operating Corp., Addison, Texas. Innovation Group counts among its U.S. customers the California State Automobile Association, Nationwide Indemnity and The Auto Club of Southern California. First Notice provides services to Pemco and The Hanover Group, among others. The announcement follows close on the heels of another outsourcing deal, Capgemini's acquisition of India-based Kanbay, a provider of outsourcing services to the financial services sector. Capgemini will acquire all of the outstanding common shares of Kanbay for $29 per share in cash. Kanbay claims to have more than 200 customers in the insurance sector, which, say analysts, has the potential to strengthen Capgemini's presence in North America by providing it with an improved banking and financial services focus. The Boards of Directors of Capgemini and Kanbay have already approved the transaction, which is set to increase Capgemini's presence in India (+89% based on Q3 figures). The combined company will have headcount reaching 12,000 employees by the end of 2006 in India, reports the popular press. The Innovation Group, meanwhile, is set to pay (U.S.) $51.55 million in cash, comprising consideration of $50 million and related payments of $1.55 million for First Notice. The acquisition, which is subject, to shareholder approval and certain other customary finance and closing conditions, is expected to close in the fourth quarter of 2006, providing a platform for the company to grow its insurance outsourcing business in the U.S. First Notice's principal focus is on processing-on behalf of its clients-the first notice of loss (FNOL) made by an insurance company customer of a claim or a potential claim. First Notice currently processes approximately two million claims a year and makes 10 million outbound distributions on behalf of its client base, which comprises more than 100 insurance clients, including carriers, third party administrators and self insured businesses. With U.S. headquarters in Hartford, Conn., Innovation Group's deal adds claims to its portfolio software-led business processes for the handling of the breadth of the administrative processes of insurers and risk carriers - including back office functions such as claims management and sales, as well as software technology for both policy and claims administration that can be utilized in connection with its outsourcing operations or implemented on a stand-alone basis. Source: The Innovation Group, The Business Wire

Fed up with the life of an insurance agent, many aging baby boomers are retiring or choosing something spicier for their lives. Some principals are seizing the opportunity to sell their agencies to banks or another entities. While they may make big dollars or find cool waves, sticky problems remain in their wake. Too often, principals are struggling to attract new agents they can groom to take over the helm. At the same time, many of the country's brightest young business minds are looking askance at the prospect of being insurance agents; they've been spooked into thinking such positions will ultimately be filled by non-humans.The outlook seems so bleak that agents might someday vanish, and will it be technology that metes out the coup de grace? Or do most agents actually view technology as their savior?

Why is using technology to improve service to the agent distribution network so important? Our readers tell us that one of their chief concerns is agency attrition. One source quoted in this month's cover story talks about an 80% agent attrition rate within three years - that's a powerful number. Is it a question of insurance companies not understanding what agents need? Or is it a question of producers being unwilling or ill-equipped to adopt the technology necessary to compete in today's marketplace?Jeff Yates, executive director of the Agents Council for Technology at the Independent Insurance Agents & Brokers of America, suggests carriers can improve channel management by first seeking to understand the channel's challenges. To succeed, producers-especially those working with multiple carriers-must automate their processes while moving to a paperless environment and taking advantage of real-time rating systems. In the process, they can boost efficiency and productivity.

When it employees at Cincinnati-based Great American Insurance Co. got wind late last year that their new CIO would be Piyush Sing, former CIO of the Peoria, Ill., multi-line P&C carrier RLI Systems, they probably took a deep breath-rightly assuming that big changes would be coming in how the company uses technology to conduct its specialty commercial lines business. Sing's reputation for building front-end technology to match his previous company's unique requirements (RLI's motto was to provide "Fundamentally Sound Innovation" to the insurance industry) preceded him.As expected, Sing came to Great American Insurance with a similar plan, and a vision to overhaul the 130-year-old company's front-end applications for insurance processing with a service-oriented architecture (SOA) and Web services approach. Especially critical to Sing's vision: the ability to manage the appointments, interactions and state-by-state compliance requirements of a U.S. distribution network comprised of 8,000 active agents.

HARTFORD TEAMS WITH TECH GROUPThe Hartford Financial Services Group Inc., Hartford, Conn., is working with the largest technology trade association in Washington State to offer policies designed for the technology industry. The insurer will market the insurance to members of the Seattle-based WSA (formerly the Washington Software Association) through brokers and independent agents. Nationwide, the Hartford insures more than 50,000 technology companies.

WHITEHILL SOFTWARE HELPS CREATE POLICIESWhitehill Technologies, Moncton, New Brunswick, has shipped a new release of the InSystems product line, which helps create insurance policies. IStream Publisher 3.2 simplifies production of insurance documents by managing the process from the first draft of the contract language through the issuing of the policy. The software also supports service-oriented architecture (SOA), which increases IT agility, and includes predefined services for retrieval, assembly, rendering, delivery and storage.

The world record for the largest game of Chinese Whispers, also known as the telephone game or Pass It Down, was set by entertainer Mac King, Jan. 6, 2004, and involved 614 people.While it's safe to say King didn't pass on a message about ways to sell long-term care insurance, carriers and agents may be able to relate to the game of Chinese Whispers. Clear and efficient communication among the two groups can become difficult. And adding communication among agents and consumers can muddy the water even more.

Insurance Networking News asked David Pedersen, senior vice president at Insurity, Hartford, Conn., to explain how a data integration project can evolve from an enterprisewide objective to a successful way of life.INN: Do most insurance companies have a data strategy, and why is it important?

CAT CLAIMSCustard Insurance Adjusters, a Norcross, Ga., independent loss adjusting company, contracted with Marshall and Swift/Boeckh (MSB), New Berlin, Wis., for MSB's IntegriClaim tool for field estimating and for its IntegriClaim Administrator, which provides a paperless, Web-enabled work environment, for use in Custard's catastrophe and home office claims divisions. The technology package will send claims seamlessly from the carrier to independent adjusters.

The rapid proliferation of enterprise content, such as electronic documents, audiovisual files, instant messaging (IM), recorded phone conversations and e-mail, is having significant impact on the global insurance industry.Insurers now face severe penalties if they are unable to produce legally viable records of business conversations and transactions. Additionally, globalization, the dispersion of data and strict compliance regulations are key drivers of this emerging industry mindset.