Insurance

To find the wellspring of the insurance industry's reputation for being technologically backward, one need only follow the glow of green screens to the heart of carriers' data centers where "Big Iron" still holds sway.To get a countervailing view, one could visit Erie, Pa., where Erie Family Life Insurance Co., a member of Erie Insurance Group, is undergoing a platform consolidation of its policy administration systems.

Most insurance technology executives will tell you that navigating their way to the executive suite is, at the least, a rewarding experience. This adage is true for men and women, but in the male-dominated insurance industry, women tend to relish the ride.

Have you ever had to find a stud to hang a picture? You knew the stud was there ... somewhere ... beneath the surface, but you just couldn't find it without exhaustive searching. Finding studs is like locating knowledge management and knowledge personnel in today's insurance industry: You know they're there, but at first glance they're always hard to find.Around the time of the dot-com boom, knowledge management was one of the buzz-worthy trends infiltrating business and insurance circles. Formally established as a discipline in 1995, knowledge management, and the inception of the chief knowledge officer, had gained steam throughout the late 1990s, but fell off the radar almost completely once the bubble burst.

When INN's editors began research on the topic for this month's cover story, women in insurance industry IT leadership positions, they were charged with finding out how women are faring within the broader context of IT and management. That discovery process turned up some pretty negative press.The Journal, an online forum for educators on the value of teaching technology, quotes the National Center for Women & Information Technology's (NCWIT) research, which indicates an 80% decline in the number of female first-year college students who chose computer science as their field of study between 1996-2004. According to NCWIT, today, women make up only 26% of IT workers in the country.

Pre-retirees and retirees may produce immediate retirement planning profit for insurers, but Generations X and Y also need to start planning for retirement. So how do insurers focus on all generations? "Take a step back and develop a more client-centric approach," says David Schehr, a research director at Stamford, Conn.-based Gartner Inc. "An insurer's technology choice is a reflection of its business choice. There is a perception out there-and there is some reality behind the perception-that insurance organizations tend to approach retirement much as a product sale. In reality, the insurer should first determine its risk tolerance. If an annuity is appropriate, set goals in a retirement planning process. Ask all of the client-centric questions and, from there, if it's appropriate, develop an annuity illustration."SEPARATING THE GENERATIONS

STUDY: INSURERS NEED TO CHANGEU.S. consumers want insurance companies to more effectively communicate new products and services available to them, provide customized policies to better meet their needs and bring their customer experience up to par with other industries, according to a study by Armonk, N.Y.-based International Business Machines Corp. (IBM) of more than 3,000 P&C insurance policyholders.

ANALYZE ALL TYPES OF CUSTOMER FEEDBACKAttensity Corp., a Palo Alto, Calif.-based business intelligence software provider, has released Attensity Voice of the Customer (VoC), a software solution designed to enable enterprises to analyze and act on all types of feedback from customers.

Remember when Johnny Carson would become Karnack the Magnificent and answer the question before he opened the envelope holding the question? Well, here is the answer: You will save time and money and improve customer service as well as compliance. The question: What will Check 21 do for me?Congress enacted Check 21, or more formally known as Check Clearing for the 21st Century, in 2004 at the behest of the Federal Reserve. Recall that when 9/11 occurred, all aircraft were grounded and could not fly. The small planes that would fly checks from various cities to Federal Reserve locations as a part of the check clearing and settlement process were not exempt. As a result, the Federal Reserve decided to implement new processing rules and utilize technology, coining this process as Remote Deposit Capture (RDC), to digitize checks and remove the physical check from the clearing process.

The U.S. Bureau of Labor Statistics estimates that between 2004 and 2014, 1.49 million new computer- and IT-related jobs will be created.The retiring boomer generation may play a role in these figures, according to the Robert Half Technology 2007 Salary Guide. The guide, from Menlo Park, Calif.-based Robert Half Technology, reports that as many as 64 million baby boomers, representing more than 40% of the U.S. labor force, are poised to retire by the end of the decade.

The need for insurers to evolve in today's competitive marketplace is at an all-time high. Whether expanding to reach an untapped niche, or improving systems and practices just to keep the pace, carriers are constantly in need of setting goals and brainstorming effective ways of reaching them.One such company, New York-based XL Insurance, recognized a gaping hole in the U.S. casualty marketplace throughout the late 1990s and early 2000s and, in January 2004, made a strategic decision to swiftly expand into the casualty risk management business by offering a portfolio of risk-sensitive products. The impediment: limited internal resources and a rigid time frame in which to implement new solutions. And, for XL's rapid, creative and successful response to the problem, the company was named third-place winner of Insurance Networking News' 2007 INNovator award.

New technologies and competitive pressures are gradually prying open the doors to carriers' rating systems, long locked away in the silos of proprietary or homegrown systems. These rule-driven systems, designed to evaluate potential policyholder risk and price policies accordingly, are increasingly being called upon to integrate with multiple channels, back-end systems and front-end portals to provide real-time or close to real-time pricing for customers.These changes are being driven by a number of factors, relates Craig Weber, an analyst with Boston-based Celent LLC. Rising customer and agent expectations, for one, are pressuring carriers to provider faster, more accurate and more flexible quoting. In addition, there is continuing pressure to keep a lid on IT spending, causing carriers to look for more efficient solutions.

Mounting competition and market shifts are forcing property/casualty insurers to take a new look at core business processes.With an eye toward profitable growth and increased market share, carriers are now focusing on underwriting-an area long under-served by technology. Today, most underwriting is done through slow, error-prone manual processes or by outdated legacy applications. This inefficiency is driving down profits and eroding sales.

Los Angeles - Citing the potential benefits of saving more than 300 lives and hundreds of serious injuries each year, Farmers Insurance Group Inc. announced its support of the new Federal motor vehicle safety standard #214 by the National Highway Traffic Safety Administration (NHTSA), which requires automakers to conduct new side-impact crash tests. "Farmers fully supports this effort as a means to protect our customers," noted Kevin Mabe, economist for Los Angeles-based personal lines carrier Farmers. Mabe explained that the standard mandates a new crash test for automakers that mimics a 20-mph impact at a 75-degree angle. Additionally, NHTSA has introduced guidelines for automakers to provide head protection for rear seat passengers. Vehicles under 8,500 pounds must provide safety measures to comply with the test by late 2012. Heavier vehicles, from 8,500 to 10,000 pounds, have an additional year to fully meet regulations.

Chicago — Arup, a global multidisciplinary engineering and consulting firm, has joined with Chicago-based Aon Corp. in a strategic alliance that brings to the marketplace a pre- and post-loss consulting service that offers clients an independent, global catastrophic risk management solution.

Windsor, Conn. and Atlanta — The boards of directors of LIMRA International Inc. and LOMA approved a proposal to unite two of the world's largest insurance and financial services trade organizations and will submit a recommendation to their members for a decisive vote."Bringing LIMRA and LOMA together will be good for the industry, our members and our dedicated employees who serve our members," says Robert Kerzner, president and chief executive officer of LIMRA. "Building on our well-established strengths, we can create a new and exciting organization with limitless possibilities to meet the industry's needs, whatever they may be, now and in the future."

New York — Richard Mucci will join New York Life International, New York Life Insurance Co.'s overseas arm with operations in eight markets, as chairman and chief executive officer of International on Oct. 8, 2007. He succeeds Joseph Gilmour, who decided to leave the company.

New York — The Guardian Insurance & Annuity Co. Inc. (GIAC), a wholly owned subsidiary of The Guardian Life Insurance Co. of America, New York, announced today that Boston-based DALBAR Inc. has awarded the company with the DALBAR Seal of Excellence for Transaction Processing for the third year in a row. The DALBAR Seal is only awarded to those firms that consistently exceed customer expectations for service levels.

Orlando, Fla. – Insurance carriers who make transient improvements and do not focus their resources on innovation and differentiation will meet with failure, according to Bill Pieroni, operations vice president for State Farm Insurance Co., Bloomington, Ill.

New York — Switzerland-based Zurich Financial Services Group named Kevin Dunham as senior vice president and global relationship leader for the Western region of its Global Corporate in North America business unit. Dunham is based in Glendale, Calif., and will manage accounts primarily in the Southwest and Western United States.

Jersey City, N.J. — The U.S. property/casualty insurance industry's net income after taxes rose 10.7% to $32.6 billion in first-half 2007 from $29.4 billion in first-half 2006. Fueled by the industry's net income, policyholders' surplus—insurers' net worth measured according to Statutory Accounting Principles—increased $26.5 billion to $512.8 billion at June 30, 2007, from $486.2 billion at year-end 2006.