Insurance

When a global financial services behemoth such as Zurich Financial Services Group decides to merge three commercial property/casualty businesses into one regional unit, it would be reasonable to assume that consolidating their IT resources into one common platform would take longer than nine months.After all, large corporations aren't usually nimble and quick, insurance companies are known for their cumbersome legacy systems, and mergers of any kind are difficult to implement.

If you want a tip on selecting technologies that will enable your company to achieve its business goals, here's a good one from Stephen Wiggins, CIO of Blue Cross Blue Shield of South Carolina: Don't chase it. Let the business tell you what to do."We do not develop technology for technology's sake here," Wiggins says. "Our basic philosophy is leverage what you have. As long as what you have is flexible enough to meet your business needs, then build on it-because it retains knowledge from the past."

The rise and fall of San Francisco-based eCoverage Inc. isn't the only dot- com whose demise has surprised industry experts.In late April, Chicago-based Iwix.net, the first independent business-to- business online marketplace to link agents and brokers with specialty insurance carriers, ceased operations after failing to raise additional funding.

Less than two years ago, San Francisco-based Internet auto insurance provider eCoverage Inc. made a proclamation seemingly as bold as it was preposterous.Promising that "the insurance industry is history," eCoverage executives launched an automated quote-to-claim operating model intriguing enough to make even ardent dot-com skeptics sit up and take notice.

Insurance agents by their nature tend to be anxious, especially when it concerns customer information. Coverage confirmation, billing information and personal data are critical pieces of information in any agent's customer database, and fast access to up-to-date data is an important customer service criteria.At DS Barkley Insurance Management Services, a Scottsdale, Ariz.-based managing general agency that underwrites nonstandard auto insurance in five states, meeting these informational needs for its 150 agents was more than a full-time job for its support staff.

ess than a year after launching an ambitious program targeting small-business owners via the Internet, Wausau Insurance has shut down its eWausau operations.The decision was stunning, given that the company in April partnered with InsureZone to offer its products to banks and Web portals.

The Internet will continue to be a major focus of insurers' technology spending plans, according to the findings of a new global survey of insurance industry leaders.The survey, conducted by The Economist Intelligence Unit and PricewaterhouseCoopers, reveals that spending on technologies supporting e-business initiatives will increase 89% over the next three years. More than 150 leading insurance providers including carriers, agents/brokers, reinsurers, banks, broker-dealers and dotcoms, participated in the study.

Although the insurance market has proved to be a hard nut to crack for dot-com startups, that hasn't deterred new entrants from trying to gain a foothold on the Internet.One of the more recent entrants is NetInsurance, an online insurance agency that, claiming to be the first operation of its kind, offers customers the ability to comparison shop for and buy auto insurance in a single online session.

Insurance companies have lagged behind Corporate America in adopting the Internet as a distribution channel. But over the last two years, carriers have directed IT and advertising resources toward developing the technology and promoting their Internet sales strategies.

Nearly 40 years ago-long before Gramm-Leach-Bliley (GLB) was ratified-Charlotte, N.C.-based First Union Corp. was diligently establishing a modest insurance program designed to complement its core banking competencies.

Insurance executives apparently are unfazed by the dot-com meltdown of 2001. Business-to-business e-commerce clearly dominates the IT efforts of insurance carriers as they seek to increase online product delivery and data exchange with business partners, according to the findings of a recent survey of 73 carriers, agents and brokers conducted by Insurance Networking.

Conseco Inc. has undergone rapid change in Gary Wendt's brief tenure as chairman and CEO. In 10 months at the helm of the Indianapolis-based insurance and consumer finance company, Wendt has overseen the disposal of $1.7 billion of assets-including a $122 million stake in the Argosy Gaming riverboat-and the elimination of 2,000 jobs at Conseco Finance.In April, the company stepped up its efforts to rein in expenses by announcing plans to shift some of the company's call center servicing and back-office processing to India. Related to this decision, Conseco is acquiring exlService, a firm specializing in these functions which is based in Hyderbat, India.

When colleagues describe Robert V. James, there's no mistaking him for the tradition-bound stereotype of an insurance executive. Instead, they use such adjectives as progressive, creative and charismatic.Co-workers credit his high energy for rapid changes at Chicago-based CNA Insurance Cos. As executive vice president of CNA's Technology Solutions Group, James has attracted top talent to his team, launched an eBusiness initiative from scratch and revolutionized the way the insurer communicates with its agents.

As a provider of group pension programs, New York-based Guardian Life Insurance Co. of America understands that when it comes to mutual fund policyholders, many have an insatiable desire for data that will help them maximize their investments.Unlike typically static health and life coverage, 401(k) plan participants regularly juggle fund portfolios on a weekly or monthly basis. Even if they don't engage in fund reallocation, group pension customers are inveterate monitors of their fund balances-many doing so on a daily basis.

Because their fortunes hinge significantly on fickle Mother Nature-such as natural disasters and other weather-related occurrences-farmers are meticulous about their insurance coverage.

Extensible Markup Language, or XML, has received a whirlwind of hype since its creation in 1998, promising the ultimate universal format for all exchanges of company data.But to seasoned technology experts, this promise was initially made more than a decade ago with EDI, which also portended massive efficiencies and savings in business-to-business transactions.

Making good on its promise to vigorously defend a lawsuit filed Feb. 20 by eHealth-Insurance Services Inc., InsWeb Corp. filed a countersuit March 22 in U.S. District Court, Northern District of California, San Jose.InsWeb is denying allegations made by eHealthInsurance that InsWeb sent a considerable number of illegitimate referrals to a co-branded Web site built and maintained by eHealthInsurance (see "eHealthInsurance Sues InsWeb," April).

During MetLife Inc.'s arduous process last year of converting to a public company, CEO Robert Benmosche told Wall Street investors that the New York-based company would increase its use of technology to reduce expenses and its non-agent workforce by 5%.

Darwin's theory of natural selection proclaims that the strong species will thrive, while the weak will vanish. It's not unlike carriers' Web sites, where the best ones may have the inside track on survival.In the mid-1990s, when insurance carriers were developing corporate Web sites, many discovered they could do little wrong in the eyes of their online constituency-particularly casual users with modest expectations.

When Allstate made its bold move to direct sales, the Northbrook, Ill.-based carrier handed responsibility for the endeavor to one of its most-experienced executives. Steven Groot, an actuary and a lawyer, has been rising through the ranks of Allstate for more than three decades.