Deloitte Consulting LLP has unveiled the results of its 12th annual life and annuity back-office operations benchmarking studies, LIONS 2007 and ACES 2007, which provide comparative analysis to benchmark expenses for operations and information technology among insurance companies. The analysis covers a variety of topics including efficiency, effectiveness, key trends, use of technology and business performance.

The studies found that for life insurers, expenses per $1,000 of total annual premiums have declined 9% per annum. While the life insurance industry has made some progress with respect to cost cutting and increased efficiencies, there is still opportunity for further change, the study finds.

"Given the increasingly competitive and slow-growth environment for life insurance products, cost containment through operational efficiency is considered a top priority for executives," says Joe Guastella, national leader for Deloitte's insurance consulting group. "But it is vital executives recognize that success depends not just on committing to increase efficiencies–it also requires focusing on the ones that have the most impact."

Because expenses are evenly divided among new business operations, customer service operations, and related IT, insurers need to manage the entire business process model, not just one area. The studies also found opportunities to improve service standards, especially in call centers.

"Annuity sales have experienced explosive growth over the short term, which may be masking underlying efficiency issues," says Richard Roth, practice leader for Deloitte's global benchmarking group. "While it can be challenging to try to determine where a system can be made more efficient right when it's being taxed the most, that is exactly the time to seek out the disconnects and redundancies because they are magnified."

The studies revealed several areas that offer annuity providers the opportunity to improve efficiency:

* Reducing the not-in-good-order rate by addressing root causes.

* Expanding the use of straight-through-processing.

* Exploring additional outsourcing opportunities.

* Leveraging eService capabilities.


Is business rules technology finally hitting its stride? That's the question posed by Forrester Research Inc., a Cambridge, Mass.-based research firm, which says business rules are now a key enabling technology for dynamic business applications.

According to Mike Gualtieri, senior analyst with Forrester, this is because they enable applications to be built for change. In a preview to the "Forrester Wave" research report due out in March that evaluates 13 business rules platform vendors, Gualtieri notes that because business rules are used throughout the enterprise to make operational decisions, enforce policies and comply with regulations, there's a perfect storm of trends brewing for the business rules space.

One of the key trends in business rules is the ability new platforms provide for business people to directly create and maintain business rules. Another trend that Forrester identified, the evolution of the business analyst role, meshes nicely with this trend in business rules platforms to provide the technology and organizational ability to create and manage more flexible business solutions, Gualtieri notes.

But what about the idea that businesspeople might create and change business rules directly?

"For many people, this is a scary thought," Gualtieri says. "That is why it is critical for enterprises to adopt and extend their development processes, testing processes and release management practices to include businesspeople. The emergence of the new business analyst will play a key role in driving this."


Redwood City, Calif.-based Oracle Corp. and San Jose, Calif.-based BEA Systems Inc. entered into a definitive agreement under which Oracle will acquire all outstanding shares of BEA for $19.375 per share in cash. The offer is valued at approximately $8.5 billion, or $7.2 billion net of BEA's cash on hand of $1.3 billion. "We expect this deal to be accretive to Oracle's earnings by at least 1-2 cents on a non-GAAP basis in its first full year after closing," says Oracle president and CFO Safra Catz.

The addition of BEA products and technology will significantly enhance and extend Oracle's Fusion middleware software suite, says Oracle CEO Larry Ellison. "Oracle Fusion middleware has an open 'hot-pluggable' architecture that enables customers the option of coupling BEA's WebLogic Java Server to virtually all the components of the Fusion software suite. That's just one example of how customers can choose among Oracle and BEA middleware products, knowing that those products will gracefully interoperate and be supported for years to come."

BEA's Board of Directors, with the assistance of independent financial and legal advisers, has reviewed various ways to maximize stockholder value, says Alfred Chuang, BEA's chairman and CEO.

Oracle president Charles Phillips believes the transaction will accelerate the adoption of Java-based middleware technologies and SOA; advance innovation in enterprise applications infrastructure software; extend strategic relationships with customers and partners; and increase Oracle’s penetration in key regions such as China.


Ward Group, a Cincinnati-based insurance industry consulting and benchmarking firm, is conducting a program for finance and related operations, the company reports. The company is applying its benchmarking methodology to analyze expenses and staffing levels for components of the finance function, including operational analysis of investments, billing and collections, and internal and external audit.

The finance benchmarking program is a one-time study that will be conducted in 2008. Finance and related areas can be affected by premium size and ownership structure (public versus mutual) especially in the internal and external audit functions. This program will provide meaningful company comparisons segmenting results by operating profile to adjust for these factors.

Insurance companies interested in participating in the 2008 benchmarking program for finance and related departments can visit for more information.


The Insurance Accounting and Systems Association is offering insurance carriers and vendors a chance to discuss the ingredients for a successful partnership. Presented on March 14, 2008 in Charleston, S.C. in conjunction with the IASA Spring Planning meeting, the IASA Vendor Alliance half-day seminar will begin with a brief industry perspective overview by IASA’s expert panelists, and will continue with breakout sessions, which will examine likely technology partners, service level agreements, benefits of partnering with other technology vendors and what insurance companies executives are looking for from their vendors.


A Web site designed to bring employers, their employees, benefit brokers and insurance and other service providers together is now available. Called “,” the site is a “community” that functions as an online aggregator of a variety of players and products in the benefits space, said Principal Dick Fundakowski.

Insurance and other services providers have the option of participating, at a minimum, for a free listing. The highest level of membership or sponsorship on the site grants providers an enhanced listing of vital (financial) statistics about their company, contact information and specifics about products offered.


A recent Aberdeen Group study, “The Real Value of Network Visibility,” revealed that 100% of best-in-class organizations are accomplishing their business goals by taking some action prior to new application deployments, including using a simulated network environment, and using this as a strategy for mitigating the risk of adopting new technologies.

Organizations using network simulation solutions are 37% more likely to improve application response times as compared to all others. And, one-quarter of the study’s respondents plan to start using a simulated network environment for pre-deployment testing in the near future.

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