Subject Root Tag

The insurance industry is taking aim at a survey sponsored by the Washington Office of the Insurance Commissioner which raises the issue of whether credit scoring can adversely impact the ability of low-income and minority consumers to obtain affordable insurance.The latest controversy over the use of credit scoring comes as the industry braces for another round of legislative efforts to either curb the practice or ban it altogether. As many as 40 states are expected to tackle the issue this year, industry groups say.

Understanding how and when consumers want to receive financial advice is an important aspect in gaining the upper hand in the competitive field of financial planning.By implementing automated systems to expand advice delivery channels, life and annuity insurers can remain competitive with other financial services institutions.

Since buying Acordia Inc. in 2001 and creating the nation's largest bank-owned insurance agency, Wells Fargo & Co. has not been a big player on the agency acquisition scene-but that should change, thanks to the deal-minded focus of the agency's new head.Acordia intends to further tie itself to its San Francisco bank parent through continued cross-selling and acquisitions in the bank's West Coast stronghold, according to the agency's new chief executive officer, Kevin W. Conboy.

If you build it, they will come. But, if you want to make sure they flock to it, ask them to design it for themselves. Essentially, that's what Zurich North America did when it began developing its state-of-the-art underwriting workstation-an integrated online platform that the Schaumburg, Ill.-based commercial insurer began rolling out last year.Currently, approximately 250 large-account property underwriters are using the workstation, which houses the company's best underwriting practices, provides underwriters access to data they need from internal and external sources, and enables collaboration and knowledge-sharing between risk engineering, claims and field offices.

What do you do when you are bound by law to educate thousands of employees in less than a year on privacy standards contained in a 350-page, fine-print document?If you're like most health insurers, you spend a lot of time interpreting the privacy rules of the Health Insurance and Portability and Accountability Act (HIPAA), you boil them down to simplified policies and guidelines, you determine what employees need to know to perform specific jobs, you develop a training program, and you begin instruction.

In the insurance industry, a great deal of emphasis is placed on customer relationship management, and rightly so. But as Matthew Piroch, chief information officer for Highmark Life & Casualty Co. sees it, CRM would be difficult to achieve without ERM-employee relationship management.Pittsburgh-based Highmark Life & Casualty is a provider of life, workers' compensation, stop-loss and disability insurance to 2.2 million individuals through group policies. The company was established in 1990, with Piroch coming on board in 1998 as manager of relationship management. He was appointed CIO last May.

Yom Senegor believes information technology is not some business department that you keep locked up in the basement of an organization and manage solely as a cost center."IT plays an extremely critical role in the long-term success of an insurance company and is an integral part of the business," says Senegor, senior vice president, CIO and chief corporate strategist of Seattle-based Safeco Corp., a $7-billion insurance and financial services company.

When Blue Cross Blue Shield of South Carolina wanted to streamline its call center operations to improve productivity, it did not re-invent the technological wheel. Instead, the Columbia, South Carolina-based insurer implemented state-of-the-art software to leverage its existing IT systems.The intuitive, single browser-based interface simplifies data gathering and interpretation for its more than 350 customer service representatives.

With a $900 million annual IT budget spread across 14 business units, Nationwide Financial Services cannot afford a lot of duplication and misguided spending. However, the Columbus, Ohio-based insurance giant also needs to encourage and fund cutting-edge technology deployments to maintain its market leadership.Over the years, insurance companies have made many attempts to rein in the growth of their information systems. To promote standardized architectures, IT executives have attempted to centralize purchasing, restrict hardware purchases, or prevent "rogue" software purchases and installations that don't fit in with the master plan.

The concept of adaptive enterprise architecture is being extended outside of Nationwide Financial's vast IT structure. As part of the process, IT executives at Columbus, Ohio-based Nationwide are involved in corporate merger and acquisition decisions."We don't play a deal-breaking role in acquisitions, but we're a significant voice at the table," explains Srinivas Koushik, vice president and chief technology officer for Nationwide Financial Services. "We'll report on whether we can integrate the other company's systems."

"No more easy money for criminals, just hard time." With those words, President George Bush signed into law the most sweeping corporate reform legislation since the New Deal of the 1930s.Under the new law, the stakes for white-collar crime have increased dramatically, with the CEOs and CFOs of America's corporations now required to attest under oath to the accuracy of their financial statements under the threat of million-dollar fines and prison sentences.

It seems that everyone is jumping on the wireless bandwagon. From cell phones to PDAs to wireless pagers, both professionals and consumers are seeking new, more efficient means of communication. The fast-paced growth of wireless technology in other industries hints at the tremendous potential benefits these solutions may hold for insurance.With wireless technology, agents can have a continuous connection to their information resources, management staff can monitor business from any location, or instantly respond to time-sensitive communications, and clients can look forward to faster response times. That means support issues that once took 24 hours and two or three phone calls can now be resolved in a matter of minutes via wireless e-mail.

Recent outsourcing deals have caused a resounding buzz within the executive suites of many insurers. Prominent vendors are proposing seductive deals with no up-front cost, immediate and dramatic savings, and most recently, computing on demand. Some executives see it as a silver bullet that will drive substantial and sustainable cost reduction along with measurable improvements in performance.Far from a new idea, this is a rocky road that many companies have been traveling down for decades. History has shown that for every raging success, there is a bone-crushing failure and most deals fall in between these extremes.

After the technology exuberance of the late 1990s, the current conservative approach to IT spending seems like a hangover after a big party. But IT spending by carriers in the coming year isn't all that bleak.Depending on whom you ask, carriers on average are expected to increase their IT spending by up to 8% each year over the next few years, including this year. Last year, property/casualty and life/health carriers together spent approximately $18 billion on information technology, and they will spend $19.3 billion this year, according to Celent Communications, a Boston-based research and advisory firm.

The shortest distance between two points is a straight line. And in processing their business, insurers have found that progressing from point A to point B typically involves a straight-line approach.But there's a hitch: While the line might be straight, there's a great deal of manual redundancy and human error that lurk in the middle. By identifying technology that supports automated-or straight-through-processing (STP), carriers and their affiliates are ferreting out inefficiency and embracing a simpler method to execute transactions, billing and claims settlement.

To most insurance companies, knowing the identities of their customers has always been motivated by commission-that is, the more insurers know about them increases the rate at which they can market additional services.Following the passage of the USA PATRIOT Act in late 2001, carriers are gleaning details about their customer base motivated by omission-that is, how to eliminate unsavory customers whose sole objective is setting up insurance accounts to break the law.

While the plenary body of the National Association of Insurance Commissioners (NAIC) gave its final approval to the proposed interstate compact at its Winter meeting in San Diego, opposition and questions raised in the debate bode for the process taking years rather than months.The proposal now goes before numerous organizations representing state lawmakers and policymakers before a final package to create a single national filing system for life products will be presented to state legislatures.

Last February, PwC Consulting unveiled an intriguing concept known as the Virtual Insurance Community (VIC), an end-to-end component-based e-business solution designed for property and casualty insurance carriers.One major distinction that set VIC apart was its vast array of services, including Web portal development, application hosting and front- and back-office components.

As banking companies from coast to coast buy agencies to get into the property/casualty insurance business, Fifth Third Bancorp, for one, is getting out.In late December, the Cincinnati-based regional banking company announced it agreed to sell its property/casualty insurance operation to Hub International Ltd., an insurance agency based in Chicago, for an undisclosed amount of cash.

Still in its infancy, knowledge management technology has the potential to help carriers deliver a consistent brand image and high-impact advertising to target audiences.Advocates of knowledge management systems have long pointed to the many benefits insurance carriers could derive from the technology, but one area frequently overlooked is brand image.