Digital Platforms

No one knows for certain what regulatory changes will result from New York Attorney General Eliot Spitzer's investigations into unethical sales practices in the insurance industry.But, at press time, state policymakers had already drafted model laws requiring additional disclosure of broker compensation. And, not surprisingly, industry representatives were pleading for prudence.

A new study by London-based research firm Datamonitor suggests U.S. corporations that aggressively invest in speech-enabled self-service technology have the opportunity to reduce long-term dependency on offshore call center operations.However, one insurance call center executive contacted for this article questions the validity of this notion in its entirety, stating that there isn't necessarily a direct correlation between speech-enabled technology investments and offshore call center scale-backs.

The agent/broker compensation model is poised to change, with a departure from commissions based on profitability and volume incentives.A poll of attendees at The Conference Group's 16th annual executive conference for the property/casualty industry in December revealed insurance executives expect changes in the brokerage and regulatory models to have fundamental and long-lasting effects on the industry.

Allianz Life Insurance Co. of North America plans to add bank distribution alliances and increase its multicultural marketing efforts next year, according to the company's new director of sales and distribution. Hayward Sawyer, who joined the company in June and was promoted to the twin posts in December, says Allianz Life is in the process of hiring a manager to expand its bank relationships in the next 12 months."We currently have a couple major relationships, but we want to work with major banks, including regional banks," he says.

The Contracts Update section includes announcements of contracts insurance information technology companies have signed with customers in recent weeks. Contract news can be faxed to Insurance Networking News magazine at (312) 913-1366 or by electronic mail to Stephen.Dwyer@ thomsonmedia.com Affiliated Computer Services Inc.

The carrier's new rating system for personal lines enables Balboa to process new applications quickly, due in part to the solution's Extensible Markup Language (XML) architecture.For almost 30 years, Balboa Life and Casualty Co. provided lender-placed insurance solutions to financial institutions. However, to become a leading player in both the consumer and financial institution spheres, the insurance carrier has begun focusing on introducing growth-oriented personal insurance products, such as homeowners insurance.

Like most large U.S. insurance carriers with aging technology platforms, CNA Financial Corp. was faced with a critical decision: How to modernize a legacy claims system to meet 21st century business requirements. And like other insurers, the Chicago-based commercial carrier is banking on technology that integrates multiple disparate systems, streamlines adjuster workflow, provides more timely management information, and reduces claims and IT costs.

ATLANTA--COUNTRY Insurance & Financial Services of Bloomington, Ill. announced today the closing of two transactions with Cotton States Insurance Group of Atlanta. Under the first transaction, Cotton States Life Insurance Company merged with a subsidiary of COUNTRY Life Insurance Company. In the second transaction, Cotton States Mutual Insurance Company pooled premiums and losses with those of the COUNTRY property/casualty group.

When it comes to IT spending this year in the insurance industry, it's déjà vu all over again. In general, industry analysts concur that U.S. insurance companies will increase IT spending only slightly this year-between 1% and 4%. Last year, they predicted cautious increases of 2.5% all the way up to 6.7%.Similarly, carriers' priorities for IT spending in 2005 will focus on projects that ranked high on the list last year as well. Namely, their attention will focus on IT projects with the potential to increase revenues by improving distribution and customer service, and those that cut costs by streamlining business processes and workflow. Also like last year, insurance executives remain resolute about making sure their technology investments align with business strategy. IT governance is key.

The challenges insurers face with handling paper documents have been well documented. Dealing with reams of paper is one thing. Coping within a manual and de-centralized content management scheme is another.The process of printing and mailing policies is both cumbersome and costly, as is storing policies in archived files. For some, retrieving older, existing policies is akin to finding a needle in a haystack.

The NAIC has adopted model legislation that would implement new disclosure requirements designed to ensure consumers are provided the information necessary to understand the manner in which brokers are compensated for the sale of insurance products. The model legislation amends the NAIC's current Producer Licensing Model Act and is a key component of an aggressive initiative by state insurance regulators to address issues surrounding the use of compensation arrangements by insurance brokers.

SAN FRANCISCO--WorldGroup, a leading provider of flexible, component software solutions for the insurance industry, today announced that it has submitted a signed, definitive agreement to acquire Taliant Software, LLP. Established in 1992, Denver based Taliant has insurance software applications installed and in production use in insurers throughout both the United States and Canada.

INDIANAPOLIS--Anthem Blue Cross and Blue Shield customers can now enroll in their health care benefits through secure, online tools available at http://anthem.com . The new capabilities not only make enrolling fast and easy for employees and individuals, but allow employers to streamline their work, lower administrative costs, and save time, all in an effort to improve the ease of working with Anthem.

GREENSBORO, N.C.- Jefferson-Pilot Corporation today announced it has completed the integration of the U.S. group life, disability and dental business of The Canada Life Assurance Company with its group insurance operation, Jefferson Pilot Benefit Partners, based in Omaha, Neb.

SPRINGFIELD, Mass.--The MassMutual Financial Group announced today that it has launched a new section of its consumer Web site that includes useful information about how financial products and services can help individuals prepare for life events and meet new life challenges. Called "Learn," the material is included on the "For Individuals" portion of massmutual.com, effective immediately.

ATLANTA--The practice of both outsourcing and offshoring has been rapidly rising and will therefore have a huge impact on the business world for years to come, according to a new report available from LOMA, entitled "Outsourcing and Offshoring: Challenges and Opportunities for Insurance Companies."

HARTFORD, Conn.--The Hartford Steam Boiler Inspection and Insurance Company (HSB) today announced it is offering to insurers identity recovery coverage that combines identity theft insurance with services that help victims restore their credit history and identity records.

COLUMBIA, S.C.--Following a new study by the Insurance Research Council (IRC) which found that auto injury claims in four No Fault states have escalated at dramatically different rates, ISO has identified three key areas where software can help reduce the dramatic rise in No Fault auto insurance claims costs.

MAYFIELD VILLAGE, Ohio--The Progressive group of companies, the third largest auto insurance group in the country based on premiums written, today announced the debut of its newest Web site, driveinsurance.com, highlighting the important role that independent agents and brokers play in Progressive's business model.

PEARL RIVER, NY--ACORD was presented with the prestigious Innovation of the Year Award at the 2004 Insurance Day Awards in London on December 1. ACORD President and CEO, Gregory A. Maciag, accepted the award on behalf of ACORD's more than 480 members worldwide.

HARTFORD, Conn.--The paper application for Builders Risk coverage has gone the way of the thatched roof, replaced by electronic application submission, rating, quoting and binding from The

COLUMBUS, Ohio--Grange Insurance is introducing a new extranet Web site for its independent insurance agents featuring technology to streamline business processes. The site also offers comprehensive functionality that helps agents manage the sales process and their Grange policies. The new Web site, http://www.grangeagent.com , is being rolled out to Grange's 1,200 independent agencies.

PALO ALTO, CALIF--Corporate America's information architecture is replete with obsolete, redundant and unused software applications--so many, in fact, that maintaining them drains tens of billions of dollars per year from the most information-intensive companies alone. However, nearly three quarters of these companies have no process in place for retiring outmoded software and less than half conduct regular software audits to see how much software is on the network.

BOCA RATON--The LexisNexis RiskWise Rate Evasion Evaluation service helps insurance providers prevent application and premium fraud using sophisticated models powered by public records data.

ALPHARETTA, Ga.--ChoicePoint today announced its acquisition of Priority Data Systems, based in Omaha, Neb., a provider of comparative rating software solutions to the independent insurance agency market. Terms of the acquisition were not disclosed.

The insurance industry was in shock after N.Y. Attorney General Eliot Spitzer dropped his bomb by filing a lawsuit in October against Marsh & McLennan. Spitzer charged the New York-based insurance brokerage firm-one of the largest in the country-with receiving payoffs from carriers for steering commercial business their way, rigging fake bids, and cheating corporate customers out of receiving advice in their best interest.Marsh and others in the industry have since suspended contingent commissions-the questionable payment structure at the heart of Spitzer's case. But no one can say for certain how broker compensation will change as a result of the investigations, which now include other brokerage firms and commercial and health carriers.

When insurance underwriting cycles turn sour, as they inevitably do, industry experts are quick to criticize the industry for not following strict underwriting guidelines. The easiest solution for insurers to turn a "soft" market around is to raise premium rates, but some carriers, such as Fireman's Fund Insurance Co., are revamping their underwriting systems to improve underwriting consistency and discipline.As part of a broad initiative that includes reorganizing its field force of independent agents and developing an enterprisewide approach to IT systems to support a cohesive distribution strategy, the Novato, Calif.-based carrier will implement the Accenture Underwriting Components Solution. The Web-based platform uses diagnostics and rules-based technology to help improve underwriting efficiencies.

Many insurers would agree that financial services convergence-the integration of bank, brokerage and insurance products sold under one roof-has not matured to the degree many had hoped four years after the passage of the Gramm-Leach-Bliley Act.The new director of distribution for The Hartford Financial Services Group's life insurance business, however, believes there is a great deal of untapped opportunity ahead-particularly relating to an insurer's ability to market products at the bank level. The key to the effort: make it as simple as possible for bank representatives to push insurance products out to their customers.

Each year, insurers identify the flexible, non-proprietary and enterprisewide benefits of Web services, although insurers continue to cite three prevailing reasons to table e-services investments for another day. These reasons include reliance on multiple legacy system operating environments, security issues and overall costs.In a survey of 132 property/casualty insurers conducted in October, Troy, N.Y.-based MapInfo Inc., a global provider of location-based geo-spatial software solutions, determined that there's been increased adoption of Web services and integration technology. The survey was largely targeted to IT managers and senior-level executives.

The Contracts Update section includes announcements of contracts insurance information technology companies have signed with customers in recent weeks. Contract news can be faxed to Insurance Networking News magazine at (312) 913-1366 or by electronic mail to Stephen.Dwyer thomsonmedia.com Accenture

Cedar Rapids--Fiserv Insurance Solutions, a unit of Fiserv, Inc. and an innovative solutions provider for the insurance industry, announced availability of the 1.2 version of Fiserv Advanced Billing, a Web-based system utilizing the J2EE (Java 2 Enterprise Edition) platform.

NEW YORK-- A poll of attendees at The Conference Group's 16th Annual Executive Conference for the Property-Casualty Industry has found that executives expect changes in the brokerage and regulatory models to have fundamental and long-lasting effects on the industry, including downward pressure on industry compensation, with pricing likely to increase.

EL SEGUNDO, Calif.--Computer Sciences Corporation

BOSTON--Blue Cross Blue Shield of Massachusetts (BCBSMA) has purchased the Interwoven Enterprise Web Change Management solution, powered by Interwoven OpenDeploy, to enable faster, accurate and cost-effective synchronization of a disaster recovery site for its member and provider Websites. BCBSMA also purchased the Interwoven Self-Service solution to maintain fresh, personalized content on its Provider Portal.

PORTSMOUTH, NH--Bottomline Technologies today announced the expansion of the company's financial Business Process Management (fBPM) solutions. These fBPM solutions are designed to streamline paper-driven order-to-cash and purchase-to pay processes -- enabling organizations to more effectively manage their financial assets and trading partner relationships.

Newark, Calif.--Risk Management Solutions (RMS), the world's leading provider of products and services for the management of catastrophe risk, today announced that it provided the risk analysis for a securitization of U.S. hurricane and earthquake risk by The Hartford Financial Services Group, Inc.

Seattle--Safeco announced it is once again expanding the product breadth available on its single-platform online sales center Safeco Now. In a breakthrough move for small-business insurance sales, the company has introduced functionality allowing independent distributors to quote and issue commercial multi-peril (CMP) policies in as little as five minutes.

Tata Consultancy Services, a global IT services firm based in Mumbai, India, has been named a "Preferred Partner" by ISO for the ISO Rating Service. ISO is a leading provider of products and services that help measure, manage and reduce risk. As a result, TCS' flagship insurance framework, Integrated Insurance Management System (IIMS), will be expanded with the content of ISO circulars--loss costs, forms assignment and rules based on state regulations--supported and validated by ISO's industry experts and actuarial staff.

One problem facing insurers who write commercial automobile coverage is that in states with mandatory auto liability reporting, also known as ALIR, carriers must report policy changes and cancellations electronically to state Dept. of Motor Vehicles (DMV).

Ken A. Crerar, president of The Council of Insurance Agents & Brokers, issued a statement in response to testimony at the Nov. 16 hearing of the Senate Governmental Affairs Subcommittee on Financial Management, the Budget and International Security.

Rating agency Standard & Poor's Corp. has identified four insurers that it believes distorted their financial statements by using "financial risk reinsurance." In a report released Nov. 16, S&P claims that the financial results of Atlantic Mutual Insurance Co., Argonaut Group Inc., CNA Financial Corp. and Liberty Mutual Insurance Co. were "materially distorted in an accounting context that contrasts with Standard & Poor's perception of the true economics of the transactions."

Sapiens International Corp. N.V. a provider of business-rules based insurance solutions based in Research Triangle Park, N.C., has signed a strategic agreement with ISO to offer the ISO Rating Service, a new rating system and rate-management offering for the property and casualty industry, integrated to its Policy INSIGHT policy administration solution.

Camilion Solutions, a Toronto-based provider of product management and underwriting solutions for the insurance industry, announced Nov. 15 a "Preferred Partnership" with ISO Rating Service. The partnership will enable Camilion to provide automated ISO-validated rating, forms and statistical information to property and casualty insurers, through Camilion Underwriter.

Exstream Software Inc., Lexington, Ky., announced today an agreement with Kanematsu Electronics Ltd. (KEL) in Tokyo to market the company's products in Japan. Under the terms of the agreement, KEL will offer Dialogue, WebVerse, AFP Studio and future Exstream products as part of its solution set for managing document information infrastructures. Exstream chose Kanematsu for its strong customer relationships in the Japanese market, specifically in the mail order, insurance, security, credit card and utility industries, the company stated.

AQS Inc., Hartland, Wis., announced the release of AQS/advantage 2.0 and AQS/advantage Integrator at the ISOTech conference in New Orleans. AQS/advantage 2.0 includes a new, streamlined user interface designed to improve clients' workflow efficiency, productivity, and profitability. AQS/advantage Integrator is an ACORD XML certified solution that utilizes Web services for publishing policy and statistical data between AQS/advantage and clients' enterprise systems.

Websense Inc., a San Diego-based provider of employee internet management solutions, today announced that Penn National Insurance, Harrisburg, Pa., is utilizing Websense Enterprise to comply with the Gramm-Leach-Bliley (GLB) Act by safeguarding confidential consumer financial data from new web-based attacks. Founded in 1919, Penn National Insurance offers property-casualty insurance through 750 independent agencies.

Fiserv Insurance Solutions, Cedar Rapids, Iowa, has released Version 1.2 of the Web-based Policy STAR system. The policy administration system's new version extends property-casualty insurers' capability to cut time-to-market with new products, contain maintenance expense, and improve operational efficiency and data accuracy. Program features found in the latest version include enhancements for renewals and cancellations and a migration path from legacy systems to Policy STAR.

DARIEN, Ill.--Quotesmith.com Inc., a provider of insurance quotes from over 200 leading companies, has received a subpoena requesting documents and seeking information from the State of Illinois Department of Financial and Professional Regulation, Division of Insurance. Quotesmith.com intends to cooperate fully with the Illinois Division of Insurance.

WASHINGTON--Addressing the rising cost of healthcare should be one of the top items on the domestic agenda for the new Congress, according to a national poll from the Blue Cross and Blue Shield Association (BCBSA). The poll results were released at a forum today co-sponsored by BCBSA and Forbes magazine on the future of healthcare at the National Press Club in Washington, D.C.

New York, NY--MetLife announced that it's online employee benefits management portal, MetLink, received the 2004 E-Fusion award for Customer Service and Benefits Management. This prominent industry award, presented at the AM Best Insurance and Technology Conference, is awarded to insurance companies and their affiliates for outstanding, resourceful uses of technology in the insurance industry.

FALLS CHURCH, Va.--The Accredited Standards Committee (ASC) X12 and the Data Interchange Standards Association (DISA) have launched the ASC X12 Implementation Guide Request for Interpretation Web site.

PLANO, Texas --Fuego, a provider of business process management (BPM) solutions, today announced the latest version of FuegoBPM software suite.