Digital Platforms

Salt Lake City - GE Healthcare, a $14 billion unit of General Electric Company that is headquartered in the United Kingdom, and Intermountain Health Care, a Salt Lake City-based integrated health care system, announced the organizations' joint project to develop a new advanced electronic medication administration record, also known as an eMAR, which will better enable collaboration among a patient's care team.

Hartford, Conn. - Personal automobile and homeowners market leaders are employing a new mix of tactics as they compete for growth, according to two new publications by Conning Research and Consulting Inc., Hartford, Conn."Personal lines market leaders are more aware now than last cycle of the price points that damage profits," said Bruce Hale, analyst at Conning Research & Consulting Inc. "Modest price cuts are common in personal automobile, while the homeowners line is showing flat to minimal rate increases in most states. These measured actions are affordable for insurers because of recent strong profits. The aggressive competition is occurring in data modeling and branding. Market leaders are outsmarting their rivals in risk selection and staking a superior position in the mind of the consumer."

New York - MetLife Inc. reports completion of its $11.8 billion acquisition of New York-based Citigroup's Travelers Life and Annuity Co. and nearly all of Citigroup's international insurance businesses. The New York carrier paid Citigroup $10.8 billion in cash and about 22.4 million of its own shares, which are valued at roughly $1 billion. Travelers Life and Annuity Co., which is based in Hartford, Conn., reported 2004 sales of $822 million. Once the deal is closed, Citigroup says it will record a $2 billion gain in the third quarter.

Over the past three years, publicly held companies in the insurance industry have become painfully familiar with the stringent requirements of the Sarbanes-Oxley (SOX) corporate governance law.A senior-level executive with Chicago-based global brokerage firm Aon Inc., confirmed that the company's audit fees skyrocketed 53%, from $10 million in 2003 to $15.3 million in 2004. And, with annual revenue of $800 million and income of approximately $73 million, RLI Corp., a Peoria, Ill.-based specialty insurer, absorbed Section 404 compliance costs last year of $1.9 million.

If the leading policy administration software executives were a bit surprised to see a standing-room-only crowd at their ACORD-LOMA Insurance Systems Forum session in Orlando on May 23, it's because they had yet to see results of a general session poll that would occur the following day: a full 46% of voting attendees reported policy administration systems as a high investment priority (see page 10).The topic for discussion for the session, "What Do the Experts Say About Administration Systems?," was finding cost-effective ways to merge systems and reduce complexity and associated costs.

The good news coming out of the ACORD-LOMA Insurance Systems Forum, held May 22-24 in Orlando, Fla., is: The role of standards is strong and growing for top-ranking carriers. The not-so-good news is: For many other carriers, it's still a struggle to get buy-in for standards from the business side.According to a survey conducted by ACORD of its top 25 members-chosen based on A.M. Best data for premiums and market penetration-90% currently have a strategy in place to implement ACORD standards and 93% have plans to do so this year.

In software buys that have risen fairly steadily over the past eight quarters, core systems appear to be carriers' priority, according to a report released by Celent Communications Inc., Boston.Celent's goal in conducting its research, "Insurance Software Deal Trends 2003-2004," was to find out what types of insurers (by size and lines of business) purchased application and infrastructure packaged software during that time period. The study also looked at the business processes supported by these deals, as well as some of the broad trends in terms of deal activity.

To the Agents Council for Technology (ACT), anything is possible."We want to do everything we can to accelerate agent, carrier, and vendor implementation of money-saving technologies," says Jeffrey Yates, executive director for ACT, which is an operating unit of the Independent Insurance Agents & Brokers of America (IIABA), Alexandria. Va.

A survey of life insurance CFOs conducted by the Tillinghast division of Towers Perrin revealed that significant changes in insurance distribution are likely.In March, the Stamford, Conn.-based services firm asked more than 70 executives about the issues underlying distribution and remuneration concerns.

Think back to 1978. Pete Rose of the Cincinnati Reds had his 3,000th major league hit. The first test tube baby was born. Poland's Karol Wojtyla became Pope John Paul II. Nearly 1,000 people committed suicide in Jonestown, Guyana. And Egypt and Israel signed the Camp David peace accord.In the same year, the P&C industry made its last profit from underwriting for 25 years. That's right: Not until last year did the industry's combined ratio again fall below 100-which means for more than two decades, P&C losses exceeded premium earnings.

Two primary trends are emerging that are impacting the state of underwriting in the P&C market. The first is the drive to reduce complexity. New technology is simplifying systems and reducing the amount of manual document-handling between carriers and agents. The second trend is an increased use of data-driven decision-making for more predictable underwriting results.This is the conclusion of research conducted by TowerGroup, a Needham, Mass.-based research and advisory firm to the financial services industry.

MassMutual Adds ERISA Advisory TabTo help plan sponsors stay apprised of fiduciary obligations and minimize their fiduciary liability, MassMutual Retirement Services, Springfield, Mass., has added a new ERISA Advisory tab to its Total Retirement Center (TRC) online. The ERISA Advisory tab replaces the Plan Info tab that was previously on the Web site. All plan-level compliance information is still available within ERISA Advisory under the Consulting Services section. In addition, plan sponsors now have access to qualified retirement plan reference material and important testing and reporting information in one location.

A number of auto insurance carriers adding real-time rating capabilities and other agent- and consumer-friendly enhancements have decided to give The Progressive Group of Insurance Companies a run for its money.

New York - Integro Ltd., a risk management brokerage firm, today announced that Craig Lowenthal has joined the company as managing director and chief information officer. Based in the company's New York headquarters, Lowenthal will be responsible for the applications, infrastructure, telecommunications and technology operations for Integro Ltd. worldwide. Lowenthal has been a technology professional in the insurance industry for more than 16 years, most recently serving as vice president and chief information officer for Hartford Financial Products, a company of The Hartford. He previously held positions with Credit Suisse First Boston and Deloitte & Touche. Lowenthal is active in the Insurance Accounting & Systems Association (IASA) and the Long Island chapter of the Association of Information Technology Professionals (AITP). He is a member of the AICPA, and the NY State Society of CPAs.

The Insurance Accounting & Systems Association (IASA), Durham, N.C., announced today that their members have elected Mark Robison as president for the fiscal year that will begin on July 1, 2005. Robison has risen through the ranks of IASA holding various management team, leadership and volunteer positions within the association during his many years of volunteering. Currently, he serves as vice president and treasurer of Brotherhood Mutual Insurance Company, a Fort Wayne, Ind., a niche regional P&C carrier insuring America's churches and related ministries. Robison joined Brotherhood in January, 1994. Prior to joining Brotherhood, he worked as a manager for Ernst & Young, LLP serving insurance clients, and also within the firm's information systems consulting practice. Robison is a Certified Public Accountant, a Chartered Property Casualty Underwriter, a Fellow, Life Management Institute and holds the Associate in Insurance Accounting and Finance designation from the Insurance Institute of America.

Washington - The Terrorism Risk Insurance Act (TRIA), a temporary program introduced after the Sept. 11 terrorist attacks, has served its purpose and is probably stunting the development of the private insurance market, Treasury Secretary John Snow wrote in a letter to the Senate Banking Committee summarizing the agency's conclusions regarding TRIA.

Genworth Financial is streamlining its operations. The $103 billion company, which serves the lifestyle protection, retirement income, investment and mortgage insurance needs of more than 15 million customers, operates in 22 countries, including the U.S., Canada, Australia, the U.K. and more than a dozen other European countries.

San Mateo, Calif. - Siebel Systems Inc. is stepping up efforts to tackle the rise in fraudulent claims, the San Mateo, Calif., provider of customer-facing solutions reports. Analysts estimate that fraud in the U.S. has jumped 63 % in the past four years, and more than 25% of current U.S. insurance claims contain some element of fraud, contributing to an annual cost of at least $44 billion.

Hartford, Conn. - Aetna has entered into an agreement to acquire HMS Healthcare, a regional health care network. The acquisition will enable Aetna to strengthen its local market presence - particularly in Michigan and Colorado - by providing access to highly competitive health care networks. In addition, Aetna also enters the market for providing network access to other health plans in those states. Aetna will acquire HMS for approximately $390 million, subject to customary post-closing adjustment, and expects to finance the transaction from available cash. Aetna expects to close the transaction during the third quarter of 2005. The privately held HMS, which is majority owned by entities affiliated with KRG Capital Partners, operates under four trade names. PPOM, based in Southfield, Michigan, manages and provides access to networks throughout Michigan and parts of Ohio and Indiana. Flora Health Network operates in Ohio, Indiana and Kentucky. Sloans Lake Preferred Health and Mountain Medical Affiliates, based in Denver, manage and provide access to networks in Colorado. Source: Business Wire

Kansas City, Ks. - General Electric Co. (GE) has unveiled a plan to reorganize its 11 business groups into six. The reorganization places GE's largest Kansas City area operation, GE Insurance Solutions, in the corporate giant's commercial financial services division, headed by Michael Neal. Neal, 52, previously was president and chief executive of GE Capital Corp. and has worked in a variety of GE jobs, both in the United States and overseas, since 1979. GE's insurance operations will continue to be headed by Ron Pressman, president of Insurance Solutions in Kansas City. The new commercial financial services group will also include the parent company's leasing, real estate, corporate financial services and health care financial services operations. The restructuring also touched GE's top management ranks. Three senior executives, including Neal, were promoted to vice chairman. The company did not disclose what changes, if any, the reorganization would mean for Insurance Solution's 850-member Kansas City area work force. GE says its Insurance Solutions, formerly known as Employers Reinsurance Corp., is the world's fourth-largest reinsurance company. The other divisions created by the realignment are GE Infrastructure, which includes energy, transportation and aviation manufacturing operations; GE Industrial, which includes industrial chemicals and technology operations; NBC Universal, the company's broadcasting and entertainment operations; GE Healthcare, which includes medical technologies; and GE Consumer Finance, a global collection of financial services providers. Securities analysts quoted by Reuters and other news services said that the changes play important roles in GE's transition to a more technology-driven company.

It's a great time for P&C carriers to be considering a new policy administration system, as features critical to return on investment, such as customer relationship management and data mining, become relatively standard features in these systems, according to Boston-based Celent Communications. In a report released this week designed to help insurers understand the marketplace, Celent cites additional incentives: a drop in prices, faster implementations, and more plentiful vendor options.

Chicago - Companies want clean, accurate enterprise data to enhance analytics capabilities, say business and IT professionals in a recent survey conducted by Chicago-based data warehousing consultant Knightsbridge Solutions. More than 2,000 respondents among all levels of business and IT functions and industries completed the survey, entitled the "2005 BI Peer Review," this past spring.

Jupiter, Fla. - If life and health insurers maintain their chokehold on technology spending, it shouldn't be a case of pleading poverty. Just-released figures from Weiss Ratings show that profits in that sector climbed nearly 30% last year, the second consecutive year of growth.

Chicago - Brokerage giant Aon Corp. has appointed Bill Pieroni global chief information officer. Pieroni joins Aon from IBM, where he was head of that company's global insurance industry practice. He has extensive technology and industry experience, working with insurance companies and other clients on complex information and technology issues. Pieroni, whose appointment is effective Monday, June 20, will have responsibility for global Aon IT-related activities. He will be based at the firm's headquarters in Chicago.

Northbrook, Ill.-Michael J. Roche has been promoted to senior vice president of Allstate Insurance Co. with responsibility for Allstate Protection technology and administration . Allstate Protection combines the Allstate and Encompass property and casualty offerings through Allstate and independent agencies, respectively. Roche is also now a member of the Allstate senior management team.

Chicago - The third annual study conducted by Chicago-based Foley & Lardner LLP on the costs associated with corporate governance reform shows that the average cost of being public in 2004 increased 33 percent over 2003 for a company with annual revenue under $1 billion.

While CRM systems can get an organization 90 percent of the way toward reaching its customer relationship management objectives, the systems do not answer the key question of "why," according to CRMDirectory.com, a customer management website.

Washington - The Independent Insurance Agents and Brokers of America, Alexandria, Va., says a proposal to establish an optional federal charter for insurance regulation is not the "best or right solution for regulatory reform in the industry." The association of 300,000 business owners reacted yesterday to a letter sent by 135 insurance, national and regional finance companies to the Senate Banking Committee in support of a charter. "The lack of a federal insurance regulator is especially troublesome," the letter stated. The group asked the Committee to consider the fact that, because insurance is solely regulated by the individual states, "there is no Federal regulatory agency to represent the financial regulatory interests of the U.S. insurance industry."

Alexandria, Va.-During the past year, the Agents Council for Technology (ACT), working closely with ACORD and agency management system user groups, has undertaken a major initiative to make commercial lines download more accurate and effective for independent insurance agencies and brokers.ACT's commercial lines download work group, which drew broad participation from carriers, vendors, agents, and user groups, has released a series of important recommendations toward this end.

Oakland, Calif.-A review of hurricane trends by EQECAT Inc. shows a more than a one in three chance of large hurricane catastrophe losses in the United States in the current season, based on current forecasts by the National Hurricane Center (NHC)."Although the current season might not be as severe and unusual as the 2004 season, the potential for large losses in 2005 is likely to be troubling to insurers and reinsurers, which will have to cover the potential hurricane damage claims," says Tom Larsen, senior vice president of EQECAT.

Columbus, Ohio - Healthcare Transaction Processors Inc. (HTP), Columbus, Ohio, announced it is integrating claim overpayment protection services (COPS) into its HTP Transaction Manager suite, which serves health insurers, HMOs, TPAs, IPAs and other medical payment organizations. COPS leverages ClaimsGuard technology from Bloodhound Inc., a Research Triangle Park, N.C., software company. The enhancement will enable real-time editing of claims before they are entered into the client's claim system. Through a series of business and clinical rules and other algorithms, COPS identifies anomalies in clients' claims data, such as potential overpayments, overutilization, duplicate claims and questionable provider billing practices.

Boston - At the National Association of Insurance Commissioners (NAIC) meeting held here this weekend, the NAIC Property and Casualty Reinsurance Study group approved enhanced disclosure requirements for insurers that utilize reinsurance with limited risk transfer features, also known as finite reinsurance. The use of finite reinsurance has received considerable attention over the past several months, because of its misuse by some high-profile insurers. State insurance regulators, working in a coordinated fashion through the NAIC, have been evaluating existing relevant statutory financial reporting since last year. NAIC Property and Casualty Reinsurance Study Group approved enhanced disclosure requirements for insurers that utilize reinsurance with limited risk transfer features, also known as finite reinsurance. The use of finite reinsurance has received considerable attention over the past several months, because of its misuse by some high-profile insurers. State insurance regulators, working in a coordinated fashion through the NAIC, have been evaluating existing relevant statutory financial reporting since last year. The latest proposed disclosures would require an insurer to report to state insurance regulators any finite reinsurance agreement that has the effect of altering policyholders' surplus by more than three percent, or representing more than three percent of ceded premium or losses. Additional reporting requirements regarding contract terms and management's intention in entering the contract have been included to improve transparency. Study Group members also approved a standard attestation form to be signed by the insurer's CEO and CFO attesting that there are no side agreements and that risk transfer has occurred.

Hartford, Conn. - The Innovation Group (TIG), a UK-based provider of policy, claims and conversion technology products and services, will partner with Document Sciences (DocSci), a provider of real-time content publishing products, to automate claims reporting.

Dublin, Ireland - Claims management will be the largest IT investment made by US property & casualty carriers looking to improve operational processes this year, growing to $4.5 billion by 2007, according to a report issued by Research and Markets, a market research firm based in Dublin. The report indicates that carriers' objectives will be automating first notification of loss, the initial customer/claimant touch point reducing manual processes, and streamlining workflow throughout the process.

Austin - United Teacher Associates Insurance Co. (UTA) is launching an initiative to Web-enable Medicare supplement insurance enrollment as well as routine agent services. The company recently signed with Cleveland-based IdeaStar Inc. to design, develop and host a state-of-the-art Web site for UTA-appointed agents. The site is targeted for launch this Fall. The site represents UTA's first foray into online, electronic signature-based enrollments for senior health and life products. Top producing UTA agents are eager to obtain online processes as they seek to stay competitive with market forces. The vision of UTA's President Billy Hill is to automate agent enrollment, agent servicing and the Medicare supplement insurance education and enrollment process. The new Web site is expected to process several thousand Medicare supplement applications per month in a paperless fashion. Senior life enrollment and other products will be added in the future.In addition, the new capabilities will help attract other agents into UTA's fold. "Site design and architecture, creating an enjoyable yet efficient and accurate agent experience, are critical in the effort to recruit and retain agents," says Mike Wise, vice president of IdeaStar Insurance Technologies. "The seamless integration with Lifepro, UTA's back-end administration system, will complete the workflow and enable high-speed policy issuance."

Anaheim, Calif. - At the 77th Annual IASA Educational Conference and Business Show held this week in Anaheim, Calif., IASA announced a technology education initiative that will involve a vendor collaborative approach. It has joined forces InsureWorx, an Emeryville, Calif., provider of modular software, to develop and deliver a specialized insurance technology program for IASA member companies. The initiative will be launched with a series of InsureWorx-sponsored Webinars to provide in-depth presentations and discussions on critical topics currently affecting insurance company information technology departments.

Simsbury, Conn. - The Hartford Financial Services Group Inc., appointed Terry Walker as senior vice president and chief information officer (CIO) for its Hartford Life Inc., subsidiary.

Southfield, Mich. - Proforma Corporation, a business process modeling and analysis software company, announced it has joined with business process management (BPM) providers to answer industry demand for interoperability between business process analysis (BPA) and BPM. The consortium agreed to support a common interchange format (CIF) that will facilitate the exchange of business process models between BPA tools, such as Proforma's ProVision BPMx, and other BPM solutions.

Zurich, Switzerland - Swiss Re is aligning its management structure to its strategic objectives, the company reported today. Focusing on profitable growth and the efficient use of capital, Swiss Re will structure itself into three separate business units to be named Client Markets, Products and Financial Services.

New York -- Folksamerica Reinsurance Co. has promoted Brian Kensil to the position of Chief Operating Officer.Folksamerica's claims, information technology, human resources and administration departments will report to Brian in addition to his current responsibility for contracts, underwriting services and risk management.

In part as an industry response to legislation passed this session mandating that insurers give consumers more information regarding insurance policies to help Florida residents better prepare for hurricanes, the Florida Insurance Council announced a Hurricane Central Web site (www.flains.org).

Washington D.C. - The National Association of Insurance Commissioners' (NAIC) plan to apply Sarbanes-Oxley (SOX) corporate disclosure and accounting rules to non-public carriers will take center stage at the National Conference of Insurance Legislators' (NCOIL) Financial Services & Investment Products Committee meeting, which will convene on July 7 from 1:45 to 3:00 p.m., during the NCOIL Summer Meeting in Newport, Rhode Island.

Austin , Texas - To improve its policy management business processes, Aflac is implementing a business process management (BPM) platform. The Columbus , Ga. , carrier, which insures more than 40 million people worldwide, said it plans to use TeamWorks software, from Austin, Texas-based Lombardi, to gain new insight into process performance through business activity monitoring.

Addison, Texas - Universal Conversion Technologies (UCT), an Addison, Texas provider of data analysis and conversion services, today announced that Cincinnati-based Great American Financial Resources, Inc. (GAFRI), a subsidiary of American Financial Group, completed its conversion project. The project included the conversion of 30,000 fixed annuity policies from a recent acquisition, to the PDMA LifePRO system, GAFRI's primary administration system for all lines of business. UCT provided consulting expertise for the data mapping and project management, as well as its data conversion architect conversion.

You've driven the winding road to ERP. You've navigated the bumpy journey to CRM. Now, it's time to rev up your engines for the next big technology race: the race to the newest enterprise goal: CPM.If you haven't already heard the term, it stands for corporate performance management-also known as enterprise performance management (EPM) or business performance management.

A growing number of insurers are harnessing technology to improve services to customers victimized by identity theft.Some have established outreach programs that give policyholders access to third-party identity theft restoration services. One of them, Columbus, Ohio-based Nationwide Insurance Co., is providing other capabilities as well.

A national life settlement broker is taking an eBay-like approach to the secondary life insurance market, linking cash-strapped policyholders with institutional investors.In April, Life Settlement Insights drew a handful of institutional investors online to test the open-forward auction format of a new venture called LifeX, an electronic communications network that runs on a proprietary auction platform from HedgeHog Inc. Executives with Cleveland-based Life Settlement Insights claim they've created the life settlement industry's first online exchange and are considering extending the capability to other life settlement brokerages.

Carriers have been addressing Internet security ever since they realized the public network exposed them to denial of service attacks and theft of policyholder information. Firewalls, intrusion detection, encryption, virus scanning, access management-all these tools are staples in carriers' IT operations.But what about insurance agencies? Carriers exchange customer data with agencies via the Internet daily, and agents regularly access policyholder data within carrier systems.

When online insurance marketplaces first appeared on the Internet horizon more than five years ago, they filled an important gap in carriers' online business strategies. At that time, most insurers had Web sites that industry experts mockingly referred to as "brochureware" to describe their informational, non-transactional qualities.Insurance marketplaces attracted the attention of consumers who were surfing the Web to comparison shop for auto, home and even life insurance. Typically frequented by young, Internet-savvy Generation Xers and baby boomers, these online insurance marketplaces provided participating carriers and independent agents with hundreds of leads from consumers who were patient enough to wade through screen after screen of questions before they received their prize: multiple quotes from brand-name insurers.

ZURICH UPDATES SURETY EXPRESSZurich North America, the Schaumburg, Ill.-based commercial property/casualty insurer, has launched Surety Express Release 2, an updated version of its free online surety bond processing system. Offering a number of key enhancements, including improved screens and time-saving features, Release 2 enables agents in all 50 states and the District of Columbia to rate, underwrite, quote, obtain and issue commercial and contract surety bonds directly from the Zurich Web site at www.zurichna.com/surety.

What are the most important IT considerations for complying with Section 404 of the Sarbanes-Oxley Act of 2002? By July 15, all U.S. companies under $75 million in annual revenue must demonstrate they know the answer to that question, because that's the deadline for complying with Section 404.However, due to the lack of specific directives and knowledge, many companies are struggling with how to reach compliance by that date-let alone wondering how they will afford continued compliance year after year.

Avon, Conn. - The traditional business model used by carriers in the benefits arena is about to be challenged, according to Eastbridge Consulting Group Inc., a marketing advisory firm serving insurance and financial services organizations in the United States and Canada .