Insurance

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.

Passage of the Pension Protection Act in August 2006 has made siloed IT designs obsolete. Life, annuity and long-term care combinations are now acceptable from a tax and regulatory compliance perspective. Recent pension legislation allows combinations of long-term care policies and annuities. As a result, we can expect a frenzy of product introductions in the near future and beyond.What does this new set of possible combination contracts mean to the IT systems of insurance organizations? It means co-existence and configurability are now of paramount importance. That gives rise to the bigger question: Are carriers' software solutions ready to support the new hybrid product world?

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.

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.

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.

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.