Subject Root Tag

In 1999, when PwC Consulting formulated the blueprint for its Virtual Insurance Community (VIC), one dynamic that drove the initiative was its ability to provide insurance carriers with a pre-integrated best-in-class technology solution.The global management and consulting firm, a business unit of New York-based PricewaterhouseCoopers LLP, developed VIC as a component-based e-business solution for property/casualty insurers-eventually to be offered to life, annuity and group health carriers. And while the Virtual Insurance Community offers best-of-breed solutions spanning a myriad of technology applications, carriers that adopt the program-via licensing or via an application service hosting model-will still be able to deploy various applications that they previously have built and mapped within their IT infrastructure.

As insurance carriers expand into financial services and provide multichannel access for customers, many agents are not going along with the new program.Both State Farm Mutual Automobile Insurance Co. and Allstate Insurance Co. were sued in November by their agent associations. The agent associations are claiming the carriers have breached their contracts with the agents by increasing agents' production quotas, reducing their commissions, coercing agencies to forward their phones to call centers, and selling insurance directly to customers over the Internet.

More than nine months after it was created, Wilmington, Del.-based Fusura Inc., a Web-based personal lines insurance agency formed by global insurance giants AIG, Kemper and Prudential, is finally preparing to go live.As it prepares to launch-expected to be no later than March 31-the consortium capitalizing the venture can't be accused of rolling out the program too hastily. Since its celebrated formation was revealed, Fusura has witnessed its share of tweaks and modifications-from putting a permanent executive team in place to choosing its technology platform.

With more than 20 years of IT experience in the insurance industry, June Drewry has a vast knowledge of technology. Nevertheless, she insists she is not a high-tech wizard.In fact, when she talks about her responsibilities as executive vice president and CIO for Chicago-based Aon Corp., she peppers her conversation more with relaxed chuckles than with dry techno-speak.

Millions of potential buyers are using the Web to shop for insurance.That's why carriers are reassessing how to use the Internet to build their brand.

Until recently, insurance companies have developed many Web sites for various products and business units, with little attention paid to consistency in branding, according to Kimberly Harris, senior research analyst at Gartner Financial Services, a unit of Gartner Inc., a Stamford, Conn.-based research and consulting firm."But insurers are beginning to realize they need to focus on an enterprise brand and roll that down to the different channels," she says.

In 2000, insurers rode an information technology investment wave that was largely fueled by ambitious dot-com providers eager to plant their flag in the online insurance market.A year later, insurers jumped off the wave. The dot-com shakeout that intensified in 2001 meant that more than $15 billion in technology demand had suddenly evaporated. Moreover, a sliding economy contributed to a significant IT spending spiral-reducing healthy double-digit growth in 2000 to a less-than-stellar 3% growth rate last year.

When it comes to information technology investments in the insurance industry, there is a clear delineation of priorities predicated on the sector of business in which a carrier operates.Underwriting, pricing and products are the most important IT priorities for property/casualty insurers, while distribution reigns supreme for life insurers, states Tillinghast-Towers Perrin's e-Track report on insurance technology investments, which polled 248 large and mid-size carriers across North America.

Louisiana State University Health Sciences Center thought it had an efficient claims submission system. Half the claims from the nine-hospital integrated delivery system in Baton Rouge go to Medicare or Medicaid. Staff used to load the claims on magnetic tape each week and ship them to the government payers.

In March 2000, seven major health care payers started earnest negotiations to create a joint company to enable providers to communicate with the payers via the Internet.By July 2000, MedUnite was formed with a goal of offering services within a year. MedUnite launched its services last September, only six weeks behind its original schedule. However, it's a different company from what was originally envisioned.

Imagine how difficult it must be for an independent agent to locate a carrier that covers beekeepers or acupuncturists. Or, from a carrier's perspective, finding agents who will sell employee dishonesty or bailee coverages.MarketScout, a Dallas-based venture that was launched in June 2000, is using the Internet to help retail insurance agents get quotes and bind polices for more than 700 classes of business, primarily specialty insurance. Since it's inception, the company has registered more than 13,000 agents who have free access to information and quotes provided by 67 carriers, including such heavyweights as American International Group Inc. (AIG), Travelers Insurance The St. Paul Cos., Safeco, Cigna and Fireman's Fund.

As world of insurance grows more complex due to competition from within the industry and from banks and other financial services providers, Allied Insurance has a simple business strategy: attract and retain quality independent agents."Agents are our primary focus. Everything we do is aimed at how we can help the independent agent do business better," says Nate Beyene, IT officer for e-commerce at the Des Moines, Iowa-based carrier. "If our automation is not good, our agents can go next door."

Electronic bill payment and presentment (EBPP) has experienced a mixed bag of interest among consumers, with payments of insurance premiums ranking low on their online bill-payment priority list.In fact, insurance carriers, along with utilities, telecommunications and mortgage companies, are among the businesses that are lagging behind in the expansion of EBPP, according to a recent report by Stamford, Conn.-based consulting firm Gartner Inc.

Insurers can't understand the benefits of wireless technologies unless they experiment with it, as Progressive Insurance has done for the past year. At the same time, the lack of industry standards, coupled with current limits on how much data can be transmitted and received by mobile devices, limits the types of services that wireless devices can support."This is a technology that consumers are dying to use, except for claims and servicing," says Jamie Bisker, a senior insurance analyst with TowerGroup, Needham, Mass., and author of the recent report "Wireless Realities In Insurance."

Insurance companies spent more than $20 billion this year on new technology. But which technologies are the most innovative and will have the greatest impact on carriers' success?The Internet won't replace agents or call centers, nor will it become the preferred method for purchasing insurance. But it certainly is becoming an integral part in carriers' efforts to market, support and sell insurance policies to customers, and to attract new policyholders.

Most Americans will never forget where they were when they first heard news of the September 11th terrorist attack. For 62 Allstate claim handlers, they will remember they were attending training workshops at the carrier's

When the World Trade Center came under attack, David Annis was thousands of miles away from The Hartford Financial Services Group Inc.'s offices at Seven World Trade Center. In fact, Annis, the company's group senior vice president and CIO, was not able to return to the United States for more than a week to oversee recovery efforts.However, thanks to the combination of disaster planning, vendor support and quick work on the part of the carrier's crisis management committee, all 330 employees who worked for the five Hartford business units were working at alternative sites the following Monday.

Disaster preparedness is subject most often discussed in the aftermath of a major natural or manmade disaster.Although most major corporations have comprehensive disaster recovery plans in place, the unprecedented events of Sept. 11 clearly demonstrate importance of updating and testing those plans frequently.

In late August, Chicago-based global insurance brokerage and consulting firm Aon Corp. redesigned its corporate Web site so customers, employees and other affiliates could more easily and quickly find content and navigate the site.As part of the project, Aon's portal team also implemented a set of Web development techniques that would enable internal Web designers to reduce the turnaround time to post new and pertinent data and graphics onto the site, located at www.aon.com.

Within hours following the terrorist attacks on the World Trade Center, global insurers and reinsurers began the task of assessing the breadth and depth of the losses incurred by their businesses.With losses separated into five categories-property damage, business interruption, casualty, aviation and liability-estimates indicate that insurers worldwide may pay out as much as $70 billion as a result of the September 11 attacks in what will represent the most expensive disaster insurers have ever experienced.