InsurBanc Receives Conditional ApprovalThe Office of Thrift Supervision (OTS) in November granted conditional approval for InsurBanc, a federal savings bank that will be owned and operated jointly by the Independent Insurance Agents of America Inc. (IIAA) and three companies. InsurBanc will operate in three states-Connecticut, Massachusetts and New Jersey-once it meets criteria laid out in the OTS conditional approval and obtains approval from the Federal Deposit Insurance Corp. InsurBanc will provide an array of banking services including auto loans, credit cards, home equity loans, mortgages, CDs and money-market funds through independent agents. Joining the Alexandria, Va.-based IIAA as joint owners of the thrift holding company, Peyton Street Independent Financial Services Corp., are W. R. Berkley Corp. and two of its subsidiaries, Signet Star Holdings Inc. and Signet Star Reinsurance Co., both based in Florham Park, N.J.
Safeco System Processes Bonds Online
Following closely on the heels of its announcement to sell auto insurance, term life and stock via the Internet, Seattle-based Safeco launched an integrated, self-service system to help independent insurance agents process surety bonds through the Internet. Called "Surety Online," the program takes agents through the process-from the initial application to printing the final bond. The system will produce a complete and printable bond package, including a bond form, a bond-specific power-of-attorney, a transaction receipt and other ancillary documents for agent, once the transaction is complete. To create the XML-based application, Safeco enlisted JetForm Corp., a Web-based software solutions company based in Ottawa, Ontario. Initially, Surety Online will be available to agents in Washington, Oregon, Illinois and Indiana. The remaining states will be added through the second quarter of 2001.
Blue's Plan Unveils 'Internet Team'
Blue Cross and Blue Shield United of Wisconsin is the first health insurer in Wisconsin-and one of the first in the nation-to go online with a customer service and sales initiative. Dubbed as the "Internet team," the unit will be responsible for all customer service inquiries and sales generated from the provider's Web site, www.bluecrosswisconsin.com. The site is designed for members and prospective enrollees of Blue Cross and Blue Shield United of Wisconsin and its HMO subsidiary, CompcareBlue. When logging on the Web site, Blue Cross and Blue Shield United of Wisconsin and CompcareBlue members can obtain real-time customer service. Businesses with from two to 99 employees can apply and buy insurance online. A secure customer-service module enables subscribers to view their personal claims status, deductible and out-of-pocket amounts, hospital inpatient and outpatient authorization status, eligibility, and other health insurance.
CEOs Concerned About Technology
Life insurance CEOs understand that overcoming economic and customer satisfaction hurdles posed by distribution challenges is key to their companies' future profitability and performance, according to the findings of a Tillinghast-Towers Perrin survey of 750 life insurance CEOs from North America and Europe. Among the 250 life insurance CEOs in the United States, 85% said that distribution effectiveness and productivity are their top concerns. The biggest obstacle to further progress cited by the executives is technology limitations posed by aging legacy systems, according to the study. Inadequate control of distribution channels and the complexity of cross-channel integration are issues that the surveyed executives believe are hindering their organizations.
Activity-based Costing: Key To CRM
With the advent of activity-based costing (ABC), previous cost estimates have been shown to be highly inaccurate, according to a report from Newton, Mass.-based Meridien Research titled, "Putting ABC into Customer Profitability." The 27-page report examines the recent trend by leading-edge financial institutions to accurately measure, rather than estimate, profitability by customer using ABC techniques. One bank studied found that prior to implementing these techniques, its analyses incorrectly estimated the profitability of 75% of its customers. Institutions launching a customer relationship management (CRM) program should be using an ABC solution to establish a true baseline for determining CRM return on investment, says Bill Bradway, research director at Meridien.
ChannelPoint, IBM Form Alliance
ChannelPoint Inc., Westminster, Colo., formed a worldwide strategic alliance with IBM Corp., Armonk, N.Y., to provide comprehensive e-business solutions to the insurance and financial services industries. Zurich Financial Services, a Swiss-based financial services organization, is the first company to participate in the alliance. Through the partnership, the terms of which were not disclosed, Zurich Financial Services hopes to create a comprehensive, integrated global e-business exchange that will enable its business units to increase distribution capacity to the sales channels, provide integrated solutions, and focus on target customers through an interactive e-marketplace. Other goals the alliance partners hope to achieve is the integration of disparate legacy platforms with an Internet-based e-commerce platform.
New York Cracks Down On Fake ID Cards
New York is the first state to issue bar-coded insurance ID cards designed to reduce fraud. The new cards have a bar code that includes a policyholder's name, address, vehicle description, insurance policy number, driver's license number and the insurance company's name. Insurers and agents began issuing the cards in November, but they are not required under law to begin issuing the cards until July 1, 2001. New York police and Department of Motor Vehicle employees will use scanners to authenticate a motorist's insurance status.
Metlife Divests Genelco Subsidiary
New York City-based MetLife Inc. recently sold a majority of the assets and operations of Genelco Inc., a provider of software and outsourcing solutions for the life and health insurance industry. Genelco was sold to Greenville, S.C.-based Liberty Insurance Services Corp., a subsidiary of Royal Bank of Canada. Although the terms of the deal were not disclosed, Liberty says it plans to retain Genelco's employees and will also keep the company's in its current St. Louis and Marietta, Ga., locations. MetLife acquired Genelco, formerly known as NaviSys Inc., last January as part of its acquisition of GenAmerica Financial Corp. In June, MetLife sold certain business segments of NaviSys to TA Associates, and the remaining company was renamed Genelco Inc. Liberty plans to continue providing business process outsourcing services to General American Life Insurance Co. and certain of its affiliates, as well as to other current customers. The acquired Genelco software division will continue to offer and support its product portfolio.
InsureZone Supporting Chase Customers
InsureZone, based in Fort Worth, Texas, is now providing online support for a wide range of financial products from New York-based Chase Manhattan Bank that target small-business customers. The alliance with InsureZone, which was formed through Chase's Small Business Financial Services Group and Chase Insurance Group, will enable small-business owners to purchase commercial insurance directly through www.chase.com. Initially, small-business customers will be provided with quotes and policy-binding abilities within one business day through InsureZone. In several months, customers will be able to get quotes and bind a policy online within 15 minutes. Small-business customers will then be able to view and request amendments to their insurance information. InsureZone is servicing customers who currently have commercial insurance policies with Chase.
Data Warehousing Lacks Cohesion: Study
Insurers' ability to transform their raw data into knowledge is critical to their survival. However, many data warehousing efforts have been postponed while others have proven to be unsuccessful, according to a study by Hartford, Conn.-based Conning & Co., a market research firm for the insurance industry. In the study, "Data Warehousing and Data Mining in the Insurance Industry: Floods of Information, Fountains of Knowledge," researchers conclude that data warehousing initiatives are undermined by employees who view widespread sharing of horizontal data as a threat to their job status. Conning researchers emphasize that data warehousing requires a close partnership between a company's business and IT leaders.
