Digital Platforms

Cambridge, Mass. - Across every generation, females are more likely than males to say that life insurers meet their needs, and the relationship female seniors have with their life insurance providers is especially strong, according to new report by Forrester Research, Cambridge, Mass. Forrester's Report, "Do Financial Institutions Meet Customer Needs" evaluated the relationships consumers have with eight types of financial institutions, including insurance. This most recent report is based on findings from Forrester's NACTAS Q3 2006 Survey. No surprise, banks were reported as the most prevalent provider, and seven of 10 consumers in the report--across all age groups--believe that banks meet their current needs. Both male and female seniors believe that home and auto insurers meet their needs. At the other end of the spectrum, only about half of consumers of all ages think that their credit card providers meet their needs. Across all of the other institutions, the Generation Y Group (consumers born between 1976 and 1982) are the least likely to have a relationship with a financial institution, says Bruce Temkin, Forrester senior analyst and author of the report. "We also found that credit card providers most often meet the needs of seniors and life insurers meet the needs of females more often than they do males. Looking across the institutions, it's clear that younger Boomers could use more attention," says Temkin. For more information, visit www.forrester.com

Dublin, Ireland - Business process outsourcing (BPO) in India is growing within the insurance industry, driven by increasing comfort with BPO vendors and the need to reduce costs, reports Research and Markets, a Dublin research firm. Though the adoption of BPO for core insurance services is progressing slowly, the market has grown to almost U.S.$3 billion by 2006, says a new Research and Markets report.

Newark, Calif. – In light of recent dire news about global warming, Risk Management Solutions (RMS) has hired a climate scientist, will pursue initiatives to enhance catastrophe modeling, and will undertake focused case studies to assess the economic implications of climate change for communities and for business. The Newark, Calif. provider of products and services for the management of catastrophe risk announced the first of such initiatives: the appointment of Dr. Celine Herweijer to the position of Principal Scientist, Future Climate. The newly designated role reflects a commitment by the company to explore the evaluation of future climate risk for today's economic, business, and political decisions, says the company. Herweijer is a climate scientist, recognized for her work on modeling drought and the impact of oceans on climate. In her new role, Herweijer will lead RMS work around the wide-ranging implications of future climate risk. Based on accumulating evidence, there is a resounding consensus among scientists that the Earth's climate is changing in response to increases in greenhouse gas emissions from human activities. The global warming trend has accelerated since the 1970s, and 11 of the last 12 years have ranked in the top twelve warmest years since 1850. A warming climate leads to changes in the nature and occurrence of extremes - tropical and temperate windstorms, droughts, heatwaves, and wildfires, as well as floods of all kinds - and for some regions and perils, RMS expects increases in the severity and/or frequency of catastrophic events. RMS climate modelers are already investigating where and how such impacts should be incorporated in catastrophe models that assess current risk, and how to model changes in risk into the future. "For many regions and perils, hazard of the past is different from the hazard of today, which is in turn different from the hazard of the future," said Dr. Robert Muir-Wood, chief research officer at RMS. "Society is still coming to terms with the profound implications of this - in addition to concerns for the safety and welfare of residents of vulnerable communities, future risk and future value is already beginning to impact today's economic and political decisions, from investment in a ski resort, to development in a canal estate in the Caribbean." The examination of future climate risk is an important development that will help us to meet the needs of business and society, said Herweijer. "We have reached the stage where the economics of the consequences of climate change is going to become a principal motivation for taking action." Source: RMS

Pearl River, N.Y. & Atlanta, Ga. - Star Trek's William Shatner will kick off the 2007 ACORD LOMA Insurance Systems Forum at the Walt Disney World Dolphin in Lake Buena Vista, Fla., May 20-22, 2007, according to the two industry associations.

New York - A number of life insurance executives recently surveyed by Deloitte & Touche USA LLP's insurance industry group related that technology is more likely to be considered a barrier at this point in time, rather than a strength. Many stated they can do better in terms of streamlining the growth processes to enhance the distributor and customer experience, and they do not believe their technology is as advanced as it can and should be.The survey of 20 C-suite executives from top life insurance companies, as well as an analysis of life insurance industry growth patterns contributed to a report--"Organic Growth for Life Insurers: A Playbook for Market Advantage."

Despite dire warnings from health officials and risk experts, only a tiny percentage of the nation's insurance carriers have developed formal plans to keep their businesses running in the face of a deadly, long-term influenza pandemic.While 82% of carriers have prepared business continuity plans (BCP) for survival in the wake of natural disasters like hurricanes, tornadoes and floods, only 11% are ready for a pandemic, says Clare DeNicola, president and CEO of IVANS, a Stamford, Conn., company that provides communications services to insurance companies. IVANS surveyed CIOs and directors in May 2006.

There has been no end of bad press for the property and casualty insurance industry this month. Allegations of price gouging, faulty catastrophe models and calls for a congressional probe into post-Katrina hurricane claims flooded the news wires.Most of the negative press pointed a finger at an odd coincidence. First, the year after more than 993,000 homeowners' insurance claims were settled in the two states most affected by Katrina and, according to the Property Casualty Insurers Association, Des Plaines, Ill., the insurance industry paid $51+ billion in overall catastrophe-related claims. Then, the industry experienced a relatively catastrophe-quiet-and profitable-year.

MODELS UNVEILED FOR NATIONWIDE HEALTH NETWORKPrototypes for a standards-based nationwide health information network (NHIN) were scheduled for presentation at a conference last month in Washington, according to the U.S. Department of Health and Human Services (HHS).

ADOBE EXPANDS ACROBATAdobe Systems Inc., San Jose, Calif., introduced Adobe Acrobat Connect software, a Web conference and collaboration product with "always-on" personal meeting rooms. It is designed to enable workers to connect online instantly with a Web browser and the ubiquitous Flash Player software. Together with Adobe Acrobat 8 software the expanded Acrobat family accelerates the flow of business by allowing people to work together in real-time, according to Adobe. The new, extended Acrobat family brings together the two critical components of knowledge work-documents and people. Acrobat Connect enables users to choose a Web address for their online personal meeting room, with unlimited use for up to 15 participants for one monthly fee.

CANAL SELECTS TRUMBULL FOR SUBROGATION MGT.Canal Insurance Co., Greenville, S.C., entered an agreement with Trumbull Services, Windsor, Conn., to use Trumbull's Subrooutsource, an internally developed, advanced system designed to enhance subrogation recovery activities for all lines of business nationwide. Trumbull, in conjunction with an experienced subrogation team, will manage the entire subrogation process, leveraging the system's abilities to increase recoveries through effective resource allocation, automated workflows and a continuous improvement model.

Fayetteville, Ark. – The Gramm-Leach-Bliley Act (GLBA) has not created significant synergies between commercial banking, investment banking, merchant banking and insurance activities, according to a finance researcher at the University of Arkansas. It also had little effect on bank profitability and productivity.

Needham, Mass. - Carriers need to step up their technology preparedness to get ready for industry-altering regulatory issues poised to have major impact on the U.S. insurance industry in 2007, according to new research from TowerGroup. These issues include a national catastrophe fund, an extension of the Terrorist Risk Insurance Act, and an optional federal charter.

New York - New York Life Insurance Co. promoted Alexander Burbatsky to senior vice president in the corporate information department, reporting to senior vice president Eileen Slevin.

Dallas - Insurers name e-signatures and online applications; document management, workflow and imaging; and Web self-service for distributors and/or customers (portals) as the technology strategies they are very likely or likely to implement, according to a survey from Dallas-based Robert E. Nolan Co.

New York - Two technology providers each released a Nationwide Health Information Network (NHIN) prototype in one week—first Armonk, N.Y.-based IBM and now Accenture. Accenture demonstrated its prototype solution for a fully integrated health information system at the 3rd Nationwide Health Information Network Forum on Thursday, Jan. 25, 2005, in Washington, D.C., where IBM also demonstrated its prototype. The solution shows that patient data can be extracted from disparate information systems and converted to a common format that enables sharing among physician offices, medical laboratories, hospitals and other clinical settings.

Malvern, Pa. - A number of chartered property and casualty underwriters that belong to the CPCU Society believe that the industry will experience greater integration of productivity-enhancing technology into day-to-day insurance operations. They'll also face more regulatory pressures, compounded by a growing risk of class action litigation. That said, the members, who were surveyed last year, believe that they are well equipped to deal with the industry's upcoming challenges. The CPCU Society, which counts more than 26,000 members in its ranks and is headquartered in Malvern, Pa., released the results today of a November survey of its member opinion panel. In this first survey of a two-part series on insurance career outlooks, members of the panel were asked for their views on the industry's future, and what any impending changes would mean for their careers. Members did raise concern, however, about the preparedness of their industry to deal with the upcoming wave of retiring Baby Boomers. Combined with a projected shortfall in the number of new entrants with the necessary technical and subject skills, 66% of survey respondents foresee an "experience gap" as very likely to form in the next five years if nothing is done. Their suggested countermeasures include more aggressive recruiting efforts; improved training; retaining retiree capital via consulting, mentoring, and flexible scheduling; more competitive compensation and benefits; and enhanced positive visibility for the industry and its career options. "It's become very clear that education of its employees will be critical to the success of the industry's future," says Betsey Brewer, CPCU, 2006-2007 president of the CPCU Society. "Employers must recruit the best and brightest, especially applicants who hold a professional designation, like the CPCU, and/or have significant industry experience," she says. Source: CPCU Society

Omaha, Neb.-- Mutual of Omaha launched a Web site where consumers can receive information on insurance, free rate quotes and purchase a variety of Mutual of Omaha insurance products, the company reports. The site, www.mutualofomahabuyonline.com, is described as a one-stop shop for consumers who prefer a less-traditional avenue for purchasing insurance. "We recognize that some people are not only comfortable with researching online, they actually prefer to purchase online, too," said Tom Graham, senior vice president of Direct-to-Consumer Marketing at Mutual of Omaha. "We want to provide access to products that serve the consumer when, where and how they choose." The site currently offers accidental death insurance, cancer insurance as well as adult and juvenile life insurance through Mutual of Omaha and its life insurance affiliate, United of Omaha. Mutual of Omaha opened its doors for business in 1909. Source: Business Wire

Armonk, N.Y. - Framing it as flexible roadmap for insurance companies, governmental regulatory agencies and other healthcare related organizations and researchers, IBM unveiled its technology foundation for the Nationwide Health Information Network (NHIN) yesterday. The technology is designed to enable secure access to healthcare data and real time information sharing and exchange of healthcare data among physicians, patients, hospitals, laboratories and pharmacies, and other stakeholders, regardless of where the medical data is located. As reported in INN in December, two such stakeholders, America's Health Insurance Plans (AHIP) and the Blue Cross and Blue Shield Association, have agreed to support a common set of standards for the network, according to published reports. Under contract to the U.S. Department of Health and Human Services (HHS), Office of the National Coordinator for Health Information Technology (ONC), IBM developed a standards-based system, based on a service oriented architecture (SOA) to connect information that allows for a secure nationwide healthcare information exchange across widely dispersed healthcare communities. The IBM solution will bring patients and clinicians one step closer to electronic medical records and a more efficient, flexible and cost effective healthcare delivery system, says the Armonk, N.Y. company. IBM's NHIN prototype is installed and operational in three healthcare marketplaces and allows seven hospitals and 24 physicians located in Research Triangle/Pinehurst, N.C.; Guilford and Rockingham Counties, N.C./Danville, Va. and Mid-Hudson Valley, New York to securely access and exchange medical and personal health data, regardless of underlying applications and locations of data. Central to the IBM NHIN prototype effort is the use of important interoperability standards for healthcare published by the Health Information Technology Standards Panel (HITSP), key SOA interoperability principles and advanced data management algorithms developed by IBM scientists. In addition, IBM software and IBM's Health Information Exchange, used to collect and share health data electronically from an exchange platform, will help physicians access and view a patient's electronic medical records even if those records originate from disparate systems in multiple locations, reports the company. Also, the use of the IHE Framework (Integrating the Healthcare Enterprise) sponsored by the Electronic Records Vendors Association and the Health Information Management Systems Society (HIMSS) played a major factor in allowing participants to support this initiative. IBM will demonstrate its prototype NHIN Architecture during The Third Nationwide Health Information Network forum to be held Jan. 25 - 26 in Washington D.C. Sources: IBM, INN archives

New York - European and Asian life insurers are outpacing their North American counterparts at streamlining and centralizing their policy administration systems--the core systems that support and deliver insurance products for their customers, according to a global survey of more than 100 insurance technology professionals, which was commissioned by Bermuda-based Accenture.

Austin, Texas - CastleBay Consulting Corp., a consulting services firm to the P&C insurance market, has launched and will facilitate the P&C technology blog to offer the industry an open forum for opinion, conversation and experience-sharing. Sponsored by Guidewire Software, a San Mateo, Calif., provider of insurance technology and services, the P&C technology blog is intended to coalesce and share perspectives from a broad group of technology minds in insurance for the benefit of the entire industry. The objective of the blog is to facilitate ongoing discussion, debate, and unbiased information-sharing on a broad range of insurance technology topics. “It has been a long-standing challenge in our industry for insurance technology professionals to find in-depth and unbiased technical and market expertise – expertise that is needed by virtually every insurer to make the most informed IT decisions,” says Castle Bay CEO George Grieve. “This challenge is the driving force behind establishing the P&C technology blog and making it available to the industry wide technology community.” Grieve will provide his technology insights and experience on the blog while encouraging other authors to share their unique voices and to weigh in on insurance technology relevant topics. In addition to the blog, the site will also offer a wide range of current and frequently updated insurance technology related content and links. Users can access the blog at http://insurancetechnology.typepad.com. Source: CastleBay Consulting and Guidewire

Dayton, Ohio - Anthem Blue Cross and Blue Shield launched a pilot e-prescribing program in two Ohio communities in an effort to reduce medication errors and the time physicians spend managing prescriptions.Currently, less than 22% of physicians nationwide use the basic capabilities of e-prescribing, according to the Center for Medicare and Medicaid Services (CMS), Baltimore, Md. CMS estimates that the use of such technology could eliminate as many as two million harmful drug events each year.

Atlanta - LOMA has released a new edition of Life and Health Insurance Underwriting, for the first time in downloadable PDF format, the life research and education association reports. The revised textbook introduces risk assessment principles applied to underwriting individual and group life and health insurance and provides a thorough introduction to underwriting terminology and concepts. The text is assigned reading for LOMA’s underwriting course, UND 386.

Indianapolis - In the latest move by the insurance industry to participate in reducing the effects of global warming, the National Association of Mutual Insurance Companies (NAMIC) unveiled a new Web site this week: www.climateandinsurance.org. The site is designed to help address the increasing concerns about climate change and its impact on the property/casualty insurance industry. "There has been considerable discussion of climate change and the insurance industry taking place within state, federal and international policy venues. Increasingly, climate change is discussed in the context of public policy in the areas of flood and other natural disaster insurance, emergency preparedness and response, and reinsurance, among others," explained Chuck Chamness, president and CEO of the Indianapolis-based organization. Chamness said the site will not advocate a position on the scientific controversy of the causes of the increase in natural disasters around the world. "Instead, it contains information and leading thought about how climate change impacts the insurance industry, and what insurers and reinsurers in the U. S. and Europe are doing with this issue," Chamness added. David Reddick, NAMIC's associate director of public policy and editor of the Web site, said podcasts, blogs, videocasts and other interactive features will be added to the site, depending on the needs of its users. Reddick said the site will also report on the status of the National Association of Insurance Commissioners (NAIC) Climate Change and Global Warming (EX) Task Force and other regulatory or legislative efforts. NAIC has long been active in promoting education for natural catastrophe and associated risk management. "As public policy begins to develop more fully on climate change, the industry's response will be a key feature of the site," Reddick said. "We're anxious to get feedback to help us make this a significant resource for those in the industry as well as other interested and involved parties, including other information sources, policymakers, the media and consumers." Insurance Networking News (INN) further reported on the industry's response in August 2006, citing several carriers that are stepping up their efforts to more fully engage the global warming topic. For example, Firemen's Fund Insurance is launching a first-of-its-kind 'green' coverage, including rate credits and other incentives, for commercial building owners who re-build damaged properties using green and LEED-certified (Leadership in Energy and Environmental Design) building practices. California-based Firemen's Fund will begin seeking state regulatory approvals this month so that the products can be offered in states around the country this fall. Marsh, the world's largest insurance broker, and AIG, the world's largest insurer, launched carbon emissions credit guarantees and other new renewable energy-related insurance products that are allowing more companies to participate in carbon offset projects and growing carbon emissions trading markets. The carbon trading market in the European Union alone is expected to hit $30 billion by the end of 2006. And Japanese insurer, Tokio Marine & Nichido Life, reforested more than 7,500 acres of angroves in Indonesia, Thailand and several other countries to minimize losses from rising cyclone-related risks. Yet for all the industry's efforts, it must do even more to address the growing impact of climate change-induced damages, according to a new report by World Wildlife Fund (WWF) and Munich-based global insurer Allianz Group. In October 2006 INN described a report, Climate Change and Insurance: An Agenda for Action in the United States, which examined the latest scientific findings about climate change, including the impacts of forest fires, storms and floods, and the potential impact on the insurance industry and its customers. According to the report, climate change has the potential to significantly alter and intensify destructive weather patterns in the United States, leading to increased flooding, forest fires and storm damage. The most direct risk to the U.S. will likely come from hurricanes, which are expected to become more frequent and powerful. Additionally, rising sea levels over the coming decades could inundate many US coastal cities and portions of some coastal states. Forest fires could become even more frequent and larger. These changes could make insurance unaffordable for customers in high-risk areas. In fact, insurance premiums in states vulnerable to hurricanes are already increasing, and in some cases, insurers are exiting these markets altogether. Allianz and Washington-based WWF intend to engage the insurance industry, governments, regulators and others to better manage the risks associated with climate change, said the organizations. Sources: NAMIC, Insurance Networking News Archives

Boston - A new report recognizes 39 insurance companies as “Model Carriers” for “doing everything right” in technology initiatives. The companies, which were cited in a report by Boston-based Celent LLC, were invited to a Model Carrier Summit, which began today in New York.

Washington - A coalition of insurers, technology companies and health care organizations is working to provide free electronic prescribing to every physician in America.

Kansas City, Mo. - The National Association of Insurance Commissioners' (NAIC), a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories, reports that its Web site received more than 1 million visits in 2006, doubling the previous year's total. The domain, www.naic.org, logged a total of 1,150,632 visits from January through December 2006, marking a drastic increase from the 480,675 visits received in 2005. In addition to the rising number of Web visits, a 2006 analysis of the NAIC Web site showed the domain averaged 3,152 visits per day in 2006, up from 1,316 in 2005. The average visit to www.naic.org in 2006 lasted more than 18 minutes, a six-minute increase from 2005. A "visit" is tallied each time someone logs on to any page within the NAIC Web domain. NAIC Executive Vice President and CEO Catherine Weatherford attributed the increased Web activity to an "improved user experience" throughout the site, making it easier for visitors to navigate from page to page. "There have been a considerable amount of improvements made to the accessibility and organization of information within the NAIC site," Weatherford said. "The tools and options made available to our members, the insurance industry and consumers are second to none. The site is an all-encompassing, multi-media instrument that offers on-demand access to important NAIC data and information." Another reason for the spike in Web visits was the increased consumer awareness generated from Insure U, the NAIC's education-based consumer Web site. This effort included a series of public service announcements, which guided consumers to the NAIC Web site to learn more about their insurance needs. The NAIC site, which is updated daily, features an extensive amount of background on the association, including committee documents and updates, white papers, news releases, NAIC publications, consumer-oriented material, extensive databases, industry-based links, individual Web pages for the wide-range of systems available to NAIC members, links to the many divisions within the NAIC, and updated information on past and upcoming NAIC national meetings. "The NAIC is dedicated to offering a vast amount of regulatory information through its Web site," Weatherford said. "To have so many people interested in what our expansive site has to offer is a testament to the NAIC's mission of promoting the public interest and continuing to support and improve state-based insurance regulation." Source: The National Association of Insurance Commissioners

San Francisco - Advances in medical technology are a main factor driving the trend of increasing health-care costs, and industry stakeholders, insurance companies fundamentally among them, agree that improved evaluation methods are needed to better measure the benefits and risks of new technologies and procedures in order to avoid misallocation of health-care dollars. A wide range of health care industry stakeholders--from medical institutions and insurance companies to Medicare and other administrative agencies--agree on the need for a new review system, says Rita Redberg, MD, MSc, director of Women's Cardiovascular Services at UCSF Medical Center and professor of clinical medicine in the UCSF School of Medicine, San Francisco. Redbert examines this subject in the January/February 2007 edition of the health policy journal Health Affairs, which devotes the full issue to cardiovascular medicine.

Toronto - Sun Life Financial, a provider of protection and wealth accumulation products and services to individuals and corporate customers, announced it has acquired Genworth Financial's U.S. Group Benefits Business for $650 million. The acquisition, which includes Genworth's group life, short- and long-term disability, stop-loss and dental insurance, complements Sun Life's existing Group Insurance business unit and makes Sun Life a top 10 player in the U.S. group insurance market, reports the company. The new unit will be headed by Michael Shunney, who currently heads Sun Life's U.S. Group Insurance business unit from Sun Life's U.S. headquarters in Wellesley, Mass. Source: Sun Life Financial

Geneva, Switzerland - There is a growing disconnect between the power of global risk to cause major systemic disruption and our ability to mitigate it. This is one of the main conclusions released today in the annual Global Risks report, published by the World Economic Forum in cooperation with Citigroup, Marsh & McLennan Companies, Swiss Re and the Wharton School Risk Center. The Global Risks 2007 report identifies 23 core global risks (see below), and suggests that many of these risks have worsened over the last 12 months, despite growing awareness of their potential impacts. The 23 Core Risks identified by the Global Risk Network include:* Technological: breakdown of critical information infrastructure; emergency of risks associated with nanotechnology.* Societal: pandemics; infection diseases in the developing world; chronic disease in the developed world, and liability regimes.* Geopolitical: international terrorism; proliferation of weapons of mass destruction; interstate and civil wars; failed and failing states; transnational crime; retrenchment from globalization; Middle East instability.* Environmental: climate change; loss of freshwater services; national catastrophes (tropical storms, earthquakes and inland flooding).* Economic: oil price shock/energy supply interruptions; U.S. current account deficit/fall in US$; Chinese economic hard landing; fiscal crises caused by demographic shift, and blow up in asset prices/excessive indebtedness. In addition to specific risk mitigation measures, which would require the utmost in global support, communication and technologies, the report suggests that institutional innovations may be needed to create effective responses to a complex risk landscape. The report identifies two such innovations: first, the appointment of Country Risk Officers - an analogy to chief risk officers in the corporate world -- that could provide a focal point in government for mitigating global risks across departments, learning from private-sector approaches and escaping a 'silo-based' approach. “Risks are often still viewed and dealt with in isolation,” says Jacques Aigrain, Chief Executive Officer of Swiss Re. “However, in today's world, global risks are tightly interwoven. To address our contemporary risk landscape, governments and enterprises need to take a holistic approach to overcome silo thinking and acting. We need to prioritize risks effectively, improve preparedness and strengthen public-private partnerships to mitigate risks and to finance economic losses. Finally, we propose to coordinate global risk mitigation efforts by creating the function of Country Risk Officers at governmental level who regularly meet on an international level." The second innovation would be the creation of flexible “coalitions of the willing" around specific global risk issues that can provide momentum to mitigation efforts. This would allow mitigation strategies to emerge from dynamic interplay between governments and business, achieving a balance between inclusiveness and decisiveness, says the report. In addition, the report recommends a number of key needs for addressing specific global risks, including: * Linking energy security with considerations on climate change * Urgently beginning work on a successor to the Kyoto agreement with three central principles: * Involvement of the United States and major developing countries (particularly China and India); * Differential responsibilities for future emissions' reduction dependent upon past emissions and stage of economic development; and, * Common overall responsibility for climate change * Renewing terrorism insurance schemes scheduled to sunset in 2007 in some form; improve framework for public-private arrangements in other countries, and * In order to prepare for a pandemic, governments should increase research into the identification of critical choke-points in the supply/value chain where skill sets are rare, interdependencies are greatest and the risk of triggering systemic failure is highest. "While risk mitigation is set to be a key theme at this year's meeting in Davos, there is continued evidence of a disconnect between risk and mitigation," said Mike Cherkasky, President and CEO of Marsh & McLennan Companies (MMC). "The focus of government and corporations must not only be on reacting to events but on utilizing effective enterprise risk management to set priorities, increase business focus, allocate resources and maximize efficiency. Catastrophic natural disasters in recent years have demonstrated that our ability to confront emerging risks depends more on the choices we make before a disruption than the actions we take during a crisis. Only a systematic planning approach will ensure that countries and companies are prepared for the risk environment we presently face." The topics identified in the report will be at the core of the agenda for the annual meeting of the World Economic Forum taking place later this month in Davos, Switzerland. "While opinion suggests that levels of risk are rising in almost all of the 23 risks on which the Global Risk Network has been focused over the last year, the mechanisms in place to manage and mitigate these risks are inadequate; world leaders must act now," says Thierry Malleret, Director, Head of Global Challenges Team of the World Economic Forum. "While the global economy has been expanding faster than at any time in history, it remains vulnerable." Compiled by the Global Risk Network of the World Economic Forum, Global Risks 2007 draws insights from leading domain experts engaged throughout 2006 and from partnership with Citigroup, Marsh & McLennan Companies (MMC), Swiss Re and the Wharton School Risk Center. In 2007, the Global Risk Network will build on this report in extending its global work. Sources: WebWire, World Economic Forum

Newark, Calif. - Risk Management Solutions (RMS) a provider of products and services for the quantification and management of catastrophe risks, scrambled to respond to charges leveled by the Tampa Tribune that its CAT models rely on "faulty science," and that insurance companies are using the models to justify huge rate increases in coastal areas. In a letter to Insurance Networking News, Dr. Robert Muir-Wood, chief research officer of RMS, Newark, Calif., disputed the January 7 article entitled "Insurance Risk Forecast Called Faulty," stating, "We at RMS were stunned by the article's inaccuracies and one-sidedness." Contributing to the dispute is a change made in March 2006 to the RMS model that takes a 'medium-term' (five-year) forward-looking view of risk for estimating potential catastrophe losses. To date, catastrophe model results have typically been based on a long-term historical average baseline. Jim Elsner, a professor of geography at Florida State University and one of four experts on a panel that provided input to the model's development, criticized the results, telling the Tampa Tribune that it contains assumptions that are "actually unscientific." In response, RMS confirmed convening two separate meetings one with Elsner and one in which Elsner, citing an affiliation with an RMS competitor, was absent. In the October 2005 meeting, RMS hosted a meeting of four hurricane climatologists to develop a consensus forecast of the overall level of U.S. hurricane activity expected over the next five years. "The consensus involved weighing the opinions of the four experts, having first provided them with detailed statistics on historical hurricane activity and landfalls. All four scientists, including Professor Elsner, gave their sign-off on the outcome of this process. RMS then took the results of this forecast and implemented them in its hurricane catastrophe model," Muir-Wood told INN. "RMS climatologists took responsibility for determining where the extra hurricanes would be expected to form, while preserving the overall target activity rates established by the expert panel," he said. "A press release and white paper were issued describing this work in detail. Again, all four experts were asked to review and approve both documents, to ensure that their involvement was appropriately represented. The RMS regional landfall rates were not challenged by any of the panelists. While it is now recognized that Professor Elsner has developed his own theories on how hurricane activity translates to regional landfall rates, he did not challenge the RMS landfall rates developed after the 2005 expert elicitation." As reported on March 23, 2006 in Insurance Networking News, RMS justified its updated five-year model, which predicted an increase in modeled annualized insurance losses by 40% on average across the Gulf Coast, Florida and the Southeast. Modeled annualized insurance losses in the Mid-Atlantic and Northeast coastal regions will increase by 25% to 30%, relative to those derived using long-term 1900-2005 historical average hurricane frequencies, INN reported. "This new view of risk is driven by an increase of more than 30% in the modele frequency of major (Saffir-Simpson Category 3-5) hurricanes making landfall in the U.S. to account for current elevated levels of hurricane activity in the Atlantic basin, which are expected to persist for at least the next five years. When compared with a pre-2004 historical baseline, as has been previously employed for quantifying insurance risk, the increases in modeled annualized losses are closer to 50% in the Gulf, Florida, and the Southeast," reported INN. Taking into account that eight storms have hit the area in the last two years, RMS stated that the increased frequency and intensity of hurricane activity in the Atlantic Ocean Basin, as observed since 1995, is driven by higher sea surface temperatures in the tropical North Atlantic and by associated changes in atmospheric circulation. These warmer temperatures are expected to translate into a continuation of high activity in the basin, leading to a greater potential for hurricanes to make landfall at higher intensities over the next five years. "Hurricane activity in the Atlantic basin has been running far above the historical average in 9 of 12 years since 1995," Muir-Wood told INN. "As one metric, the annual number of the most intense storms (Category 3-5) has been more than twice that of the average annual number between 1970 and 1995." In October 2006 RMS organized the second of these annual expert meetings on hurricane activity rates, inviting all four of the scientists involved in the first meeting, reports RMS. "Only Professor Elsner declined, citing that he was under contract with a company affiliated with our main competitor," Muir-Wood told INN. The second meeting involved a total of seven climatologists, and went into greater depth than the first meeting, employing the results of 20 different statistical and climatological forecasting methods, said Muir-Wood. "The activity rate forecast for the next five years that came out of this meeting was almost identical - within 1-2% - of the projection of the first year's meeting," Muir-Wood stated. Despite the charges leveled by Elsner, RMS will continue to run an annual hurricane climatology expert elicitation procedure to ensure that RMS hurricane models reflect the most current view of hurricane risk, said Muir-Wood. "The five year perspective, may in future years, be decreased if this is suggested by the best scientific and statistical evidence available at that time," he added. Since the January 7 Tampa Tribune article appeared, further coverage in the popular press has linked questions about the catastrophe models to the rate increases being employed by insurance companies. Yesterday, two Florida Cabinet officers asked for more information about "a dramatic change in hurricane damage forecasting used by the insurance industry." In the Tampa Tribune's January 9 edition, Gov. Charlie Crist and Chief Financial Officer Alex Sink challenged RMS to provide the background for their model creation. "All of the material produced at these [annual expert] meetings, as well as the details of how activity rates were implemented, have been documented and are in the process of being published in peer-reviewed scientific literature," Muir-Wood told INN. RMS is the official model for the Florida Hurricane Catastrophe Fund, which was created after Hurricane Andrew hit in 1993. The fund provides backup coverage for private insurance companies. "RMS has built its reputation on the principles of providing neutral and unbiased information on risk," concluded Muir-Wood. Sources: Tampa Tribune, The Kansas City Star, Risk Management Solutions, Insurance Networking News archives.

Washington – Insurance organizations quickly responded to charges of consumer gouging, leveled yesterday by the Consumer Federation of America (CFA), a Washington nonprofit group representing 300 consumer groups.The charges were given voice by J. Robert Hunter, CFA’s director of insurance. Hunter, an actuary, former state insurance commissioner, and former federal insurance administrator, authored a study that concluded that the P&C industry dramatically increased profits and surplus in recent years.

New York – It’s understood that the actuarial department has vast computing needs and a heavy reliance on actuarial modeling, valuation and supporting technology. But stochastic modeling requirements for financial reporting, pricing and risk management are causing a growing desire to benefit from the move toward high performance computing. This, coupled with the need to pull actuarial executives out of the data preparation and calculation mire so they can focus on financial analysis and business decision support, is creating a significant push toward greater actuarial/IT alignment. These were but some of the insights that came from a recent Actuarial Transformation Roundtable, released by the Insurance and Actuarial Advisory Services (IAAS) practice of Ernst & Young LLP yesterday. The group, which brought together senior actuaries and IT professionals, focused on ways to better align the two departments in order to meet the heightened business/management demands created by competition as well as increasingly complex products, extensive Sarbanes-Oxley (SOX) compliance requirements, the shift from rules-based to principles-based valuation and the growing volume of data in general that must be integrated and managed.

Indianapolis - WellPoint, Inc. is the latest benefits provider to unveil a plan to help address the growing ranks of the uninsured. The WellPoint plan is a blend of public and private initiatives aimed at ensuring universal coverage for children and providing new and more attractive options for the working uninsured. The plan is a part of a mission to improve the lives of the people it serves and the health of its communities, says the company. Insurance Networking News reported in October 2006 that eHealth Inc., the parent company of Mountain View, Calif.-based eHealthInsurance Services Inc., planned to serve the growing market of uninsured and underinsured consumers with online tools and ultimate health insurance products. The company, which planned to raise $47.1 million in an initial public offering, said in its prospectus that, except for large companies buying insurance in bulk, finding medical coverage is time-consuming, paper-wasting, complicated and expensive. Through its Web site, eHealth has sold health insurance electronically to 325,000 consumers, and points to this statistic: More than 40% of those customers were uninsured before finding the site. At WellPoint, an independent licensee of the Blue Cross and Blue Shield Association, the mission is similar: "A core focus of our company's strategy is to reduce the rate of the uninsured and under-served," said Larry Glasscock, WellPoint's chairman, president and CEO. "The plan we've developed will broaden the reach of our health care system to include those who need it most." According to WellPoint, more than 46 million Americans under the age of 65 did not have health insurance in 2005. Approximately 45% of these individuals are either eligible for public programs and are not enrolled or voluntarily choose not to purchase coverage, while the remaining 55% simply cannot afford private insurance. Although WellPoint was received national recognition in 2006 for its health care Web sites, the company's plan may not have a robust technology focus (similar to eHealth's). Rather, its focus is to support the expansion of state health care programs to cover more of the 9 million American children who went without coverage last year. Specifically, WellPoint urges states to expand their programs to cover children in families that earn up to 300% of the federal poverty level (FPL), which means that for a family of four, they can earn up to $60,000. The plan also includes a call for improved outreach to enroll the majority of uninsured children -- up to 70%-- who are already eligible for public programs. WellPoint also calls for the expansion of state health care programs to include parents in families that earn up to 200% of FPL (a family of four could earn up to $40,000) and for childless adults who earn up to 100% of FPL ($9,800 for a single adult). If adopted by all states, the proposed expansion of public programs, coupled with a successful outreach campaign, could provide coverage to 25 million people who are currently uninsured, claims WellPoint. To help pay for the changes to these programs, WellPoint will support an increase in tobacco taxes. WellPoint's plan also includes a financial commitment from the company's charitable foundation of at least $30 million over the next three years to support community and state-based programs related to the company's uninsured initiatives across the country that are helping to provide access to care.Sources: PRNewswire, Insurance Networking News' Archives, WellPoint

Carmel, Ind. - W. Mark Johnson joined the Conseco Inc. as senior vice president and chief compliance officer. Johnson will direct compliance functions at all Conseco locations, overseeing activities at Conseco Insurance Group, Bankers Life and Casualty Co., and Colonial Penn Life Insurance Co. His responsibilities include compliance training; distribution monitoring and enforcement; company licensing; Health Insurance Portability and Accountability Act, Gramm-Leach-Bliley and state privacy regulations; market conduct audits and state examinations; and review of certain sales/advertising materials.

Rochester, N.Y. - Corporate executives worry most about data security and terrorism, according to survey results from Rochester, N.Y.-based Harris Interactive Inc. Harris Interactive asked senior executives of large corporations ($1 billion plus revenue) to share their worries about typical crisis situations. And 61% named compromise of corporate information system one of their biggest worries.Data breaches drew a number of headlines in 2006. Security experts report that high-profile data breaches, growing sophistication among cyber criminals, increased media attention and unprecedented legislative activity have changed perceptions and practices around identity theft in 2006.

Atlanta - Although the life insurance industry is predicted to experience flat to modest growth in 2007, insurance carriers may do well to consider technological tools that will help them prepare for the imminent retirement of many Baby Boomers, according to Atlanta-based LOMA, an international insurance association.The prediction comes from LOMA’s Resource magazine, which published its annual forecast by the LOMA board of directors. The LOMA board of directors is composed of chairmen, presidents, CEOs and other top executives of leading insurance and financial services companies in the United States, Canada and internationally.

Dublin, Ireland – Many of the services required by businesses including human resources, billing and transactional processing, may be entirely peripheral to its core competencies, according to research from Dublin, Ireland-based Research and Markets. Using a business process outsourcing (BPO) provider can help reduce costs while at the same time allowing the enterprise to focus on its core business.

Philadelphia - CIGNA Corp. redesigned its flagship public Web site to be easier for users to navigate and offer users extensive health information and online resources in a newly added Health & Money section.

Des Plaines, Ill. - Regulatory modernization, a long-term terrorism insurance solution and the Florida property market are top-of-mind issues the insurance industry will address in 2007, according to the Property Casualty Insurers Association of America (PCI).

INSURER ENHANCES ONLINE DATAThe Empire Life Insurance Company (Empire Life) enhanced Trilogy, its universal life product that continues to evolve to meet the changing financial and wealth management needs of Canadians. The enhancements represent the largest number of revisions to the product since Trilogy Universal Life was introduced in September 2000. Better delivery of information is achieved through a completely revised client statement and with new online investment information.

RECORDING SOFTWAREWitness Systems Inc., a Roswell, Ga.-based global provider of workforce optimization software and services, enhanced its Impact 360 IP Recording solution, featuring tripled channel capacity, unified recording management and a centralized administration tool. Designed for interactions in enterprise and contact center environments, Impact 360 now features TDM and IP recording under a single management tool. The software operates across IP, TDM and mixed telephony networks, designed to help customers ensure all their calls are recorded, whether for compliance and liability, sales verification or quality assurance purposes. Impact 360 IP Recording allows the recording of SIP-based calls. Also new to Impact 360 IP Recording is tripled channel capacity, which results in fewer servers. The solution introduces centralized administration capabilities, which provide access to all the vital Impact 360 IP Recording configuration settings, enabling customers to centrally manage all of their Impact 360 recorders regardless of location.

It's the same old adage: a penny saved is a penny earned. For many insurers, that means a boost in 2007 outsourced services. But for an up-and-coming group of carriers, that penny translates to a one-pence, kroner, deutsche mark or Euro.Across the globe, interest in business process outsourcing (BPO) services continues to increase, chiefly because insurers must continue to seek ways to achieve operational efficiencies and take advantage of growth opportunities.

How will changes in federal rules on e-discovery affect insurers? To find out, Insurance Networking News talked with Jon Neiditz, an attorney with Lord, Bissell & Brook. Neiditz has helped more than thirty insurers and reinsurers adjust to the amended rules.INN: How will the Federal Rules of Civil Procedure (FRCP) alter the way companies manage information?

GRAIN DEALERS UPGRADE POLICY ADMIN CAPABILITIESGrain Dealers Mutual Insurance Co. upgraded its policy administration capabilities with Policy Decisions from Insurity, a Hartford, Conn.-based ChoicePoint company. Policy Decisions is designed to incorporate complete policy-lifecycle administration services-from application intake to rating and underwriting, from policy issuance to renewal and reinsurance-on a single Web services platform. Grain Dealers looked at competing systems that promised improved access, says David Patterson, assistant vice president and director of Information Services for the Indianapolis-based property-casualty insurer, but Insurity had several advantages that clinched the deal. At first, agents will access it to do their own quoting for commercial policies. The longer-term plan is to provide self-service access to agents for policy maintenance.

Washington - Two conservative Fox News commentators, Bill O’Reilly and Morton Kondracke, are slated to speak at insurance industry conferences in the coming year.

Washington - A third conference in the movement to start a standards-based nationwide health information network (NHIN) is expected to include demonstrations of health information exchange prototypes and discussion of business models.

NASHVILLE, Tenn. – The nation may remember 2006 as the year the Democrats won the mid-term elections, Gerald Ford and James Brown died, and data breaches made an indelible mark on American business in general and the insurance industry in particular.

Thousand Oaks, Calif. - To promote health in the Latino community, Blue Cross of California (BCC) has started a Web site called NuestroBien, which is Spanish for ”our well being." The site, located at www.nuestrobien.com, presents articles in English and Spanish on prevention, nutrition and early detection of health problems.

Harrisburg, Pa. - Pennsylvania National Mutual Casualty Insurance Co. enhanced its online quoting and application system for personal lines products, as part of its strategy to jump-start profitable personal lines growth.Some of the technology enhancements include quick-hit automation and workflow improvements, including automatically ordering Insurance Bureau Score reports, automatically assigning plan tiering and simplifying and streamlining the application process by eliminating duplication. In addition, product enhancements include streamlining auto and homeowner underwriting guidelines to make them easier to use and less cumbersome, and revising underwriting guidelines to broaden underwriting appetite for selected risks to be more competitive.

Chicago - Chicago-based insurance broker Aon yesterday became the latest in a series of companies to participate in technology mergers as it announced its intent to acquire Valley Oak Systems (VOS), a San Ramon, Calif., provider of claims management software, services and support for the insurance industry. The acquisition reflects Aon’s desire to supplement its risk management portfolio. Valley Oak, winner of the IASA 2006 Technology Achievement Award, is best known for its iVOS system, which includes medical bill review, policy underwriting, case management, billing and event management capabilities. "Aon's acquisition of Valley Oak Systems continues Celent's predicted roll-up of the insurance software industry,” says Donald Light, senior analyst with Boston-based Celent, LLC. “While most acquisitions of independent insurance software vendors have been by larger software vendors, such as Milwaukee-based Fiserv buying Insureworx, Oakland, Calif., this time it is a major broker doing the deal.” The purchase InsureWorx, a policy and claims administration technology provider, gives Fiserv an end-to-end policy and claims administration offering for workers compensation. Other recent mergers in the insurance technology space include the San Diego-based Websense Inc., acquisition of PortAuthority Technologies, Inc., Palo Alto, Calif., and Ra'anana, Israel, for approximately $90 million in cash. PortAuthority will combine its information leak prevention technology with the "ThreatSeeker" malicious content identification and categorization technology from Websense. The deal will create a single source for companies looking to prevent the unauthorized use or disclosure of confidential data while simultaneously protecting users and data from external malicious threats. The Aon-VOS merger will benefit Aon’s unique position as a large brokerage firm. By integrating and sharing data with RiskConsole, Aon’s RMIX offering, the Aon-VOS deal enables the Chicago broker to create what the companies claim to be the only end-to-end browser-based offering in the marketplace. The acquisition of VOS follows a similar deal cut in 2004 by Aon’s with Risk Laboratories, LLC (RiskLabs), Marietta, Ga. Aon expects to consummate the VOS deal by January 31, 2007. Light believes that, from a marketing and sales perspective, the acquisition makes sense. “Valley Oak's customer base includes a great many risk management units in large employers who self-insure workers' compensation,” he says. “Aon's brokerage business targets that same group of risk managers. Aon's challenge will be to give Valley Oak the resources and freedom to keep its offering fresh and valuable to self-insured employers, as well as other customers such as insurers and third party administrators." Sources: Aon, Celent, INN archives

Dallas – Boston-based Blue Cross Blue Shield of Massachusetts (BCBSMA) has decided to use Premium Payor Services from Zix Corp. (ZixCorp). ZixCorp's Premium Payor Services provide access to future value-added services and deliver enhanced reporting for both payors and providers, aiding in analysis for incentive program initiatives.The Premium Payor Services funding model, which is in addition to the annual subscription fee per prescriber, is typically one dollar per qualified script processed or, as in this case, a flat fee license based on historical usage patterns calibrated to yield a similar amount.

Indianapolis - WellPoint Inc. received three eHealthcare Leadership Awards for two of its branded product Web sites.WellPoint, based in Indianapolis, received a Platinum award in the Best Overall Internet Site category for www.bluecrossca.com, a Silver award in the Best eBusiness Site category for www.anthem.com and a Distinction award in the Best Health/Healthcare Content category for www.anthem.com. The company's Web sites were selected from more than 1,100 award entries.