What do Carriers Need to Increase Market Share?

What are the current business and technology capabilities necessary for life insurance companies to maintain or increase their competitive position in the marketplace? Will this change over the next five years? TowerGroup, a Needham, Mass.-based research firm, set out to find the answers to these questions.

TowerGroup completed a series of research projects on underwriting and released extensive data on the property/casualty segment of the insurance industry.

In April 2006, TowerGroup launched its first life underwriting survey, hosted by Insurance Networking News. TowerGroup polled 3,000 INN subscribers on business and technology readiness in the life insurance segment. The 10-question survey focused on life underwriting business and technology capabilities in product management, operations and distribution.

Results of the ongoing research, which led to the report "U.S. Life Insurance Industry Survey Data: Is Technology What's Holding the Business Back?" showed a majority of life insurance executives believe that their respective companies are late adopters or followers of most other carriers in the industry with regard to underwriting process and outcomes. Also, according to the report, the top strategic business initiatives in life insurance underwriting are to grow revenue, improve profitability and drive operational efficiency. Holding carriers back are their inability to get life insurance products to market quickly and their inability to underwrite new business efficiently. Business process management, modernization of legacy platforms, and infrastructure consolidation are important IT strategic initiatives to support functional areas in the life insurance underwriting process.

IDENTITY THEFT INSURANCE MAKING DEBUTOne in every 23 Americans has fallen prey to identity theft-enough to prompt the American Safety Council, an Orlando, Fla.-based educational institution, to team with Travelers Casualty and Surety Co. to provide what the companies claim is the first identity theft insurance policy. Consumers can purchase the policies online, the companies say. The coverage comes with no out-of-pocket deductible, and the policies cover $30,000 in stolen funds; $500 a week for time off from work, up to four weeks; and approved lawyers' fees. Travelers' toll-free identity theft help line helps policyholders recover their identities. Travelers Casualty and Surety Co. is part of the St. Paul Travelers Cos. Inc. The American Safety Council has offered safety training, professional continuing education, and business services in association with state regulatory agencies, courts and industry for more than 15 years.

RECOGNITION FOR REAL-TIME TECH ADVANCES

Carriers and individuals were recognized at the 21st annual TenCon show in Dallas for contributing to advancements in real-time communications. Altamonte, Fla.-based Applied Systems Client Network (ASCnet), the user group of applied systems management technology, announced the award winners at a conference in Dallas. ASCnet's Ease of Doing Business awards went to Frankenmuth Financial Group, Frankenmuth, Mich. (gold); Liberty Mutual Agency Markets, Boston (silver); and The Hartford, Hartford, Conn. (bronze). The awards recognize work in personal and commercial lines combined, says Donna Abramson, ASCnet chairperson. Frankenmuth also won Commercial Lines Interface Carrier of the Year, while Ohio Casualty Group, Fairfield, Ohio, earned the award for personal lines. Some carriers participate in just personal or commercial lines, and the association sought to recognize those as well, says Abramson. ASCnet's Carrier Representative of the Year award went to Brady Polansky, CPCU, CIC, agency operations director in the marketing group for Westfield Insurance, Westfield Center, Ohio. The Indiana Applied Systems User Group won Chapter of the Year.

ENTREPRENEURS USE SITE TO SHOP FOR COVERAGE

Small-business owners no longer need to shop around for confirmed medical insurance pricing in Ohio. Instead, they can go online to a site listing the prices of all of the medical benefits insurers in the state. The service, powered by technology from FormFire LLC, headquartered in Cleveland, reduces shopping time, the provider says. With more than 10 carriers to choose from, business people can find the right carrier and the best deal, says FormFire.

This new service represents the culmination of five years of development and testing, says Michael Epp, chief developer of the service. "Since we would be dealing with some of the most private and personal information an individual has, our service had to overcome three major hurdles: Having an online service that is highly secure and HIPAA compliant; having a service people would find easy to use; and having a service that all the participating Ohio insurance carriers would accept," says Epp.

The FormFire service is available statewide and has attracted many thousands of users, the company says. Inquires are coming in from other states hoping to ease the burden for their small business groups, says Epp.

CHUBB CUSTOMERS CONNECT ONLINE TO REPAIR SHOPS

The Chubb Group of Insurance Cos., Warren, N.J., launched an online tool to help put personal insurance customers in touch with Chubb's network of preferred, independent auto body repair shops. Using advice from agents and brokers, Chubb developed the repair network as part of the Masterpiece Auto Preference Services program.

The tool is now available online to agents and brokers. They can obtain information any time, even when losses occur after hours or on weekends. The tool also provides directions from the customer's address to the chosen shop.

HOUSING STOCK UNDERVALUED 21%

According to the 2006 Insurance to Value (ITV) Quality Index, 58% of U.S. residential housing stock is currently undervalued for insurance purposes by an estimated 21%. That's an overall improvement of approximately 2% from the previous year in the number of undervalued properties, states report publisher Marshall & Swift/Boeckh (MSB), a Los Angeles cost valuation technologies provider.

The ITV Index, published annually since 1999, highlights the estimated amount of undervalued residential properties in the U.S. economy, with a particular emphasis on the nearly 80 million single-family, Main Street-type dwellings.

MSB attributes the results to improved valuation technologies and the collaborative efforts between policyholders, agents and insurers that enable insurers to update legacy replacement cost information already on the books.

FEMA SAYS POLICYHOLDERS CAN APPEAL

The U.S. Department of Homeland Security's Federal Emergency Management Agency (FEMA) published the final rule amending the National Flood Insurance Program's (NFIP) regulations to include an appeals process for flood insurance policyholders.

The final rule fulfills a key provision of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (P.L. 108-264).

Under the new appeals process, FEMA will acknowledge receipt of a policyholder's appeal in writing, review the documentation submitted by the policyholder and conduct any necessary additional investigation. FEMA will advise the policyholder and the appropriate flood insurance carrier of FEMA's decision regarding the appeal.

NEW YORK LIFE NAMES CTO

Mark Sanders joined New York Life as CTO and senior vice president of the corporate information department, reporting to COO and senior vice president Eileen Slevin. Sanders is responsible for New York Life's information technology vision, strategy and planning, overseeing the enterprise architecture and engineering division in the corporate information department. Sanders is also president of the Wall Street Technology Association.

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