Arlington, Va. - As insurers scramble to minimize risk and make the most of business opportunities related to climate change and other severe weather-related losses, the National Science Board, Arlington, Va., is asking for $300 million in additional funds to help fund a multi-agency effort to improve hurricane science and engineering research. In a draft report released yesterday, "Hurricane Warning: The Critical Need for a National Hurricane Research Initiative (NHRI)'' the report calls for "a determined effort to maximize our understanding of hurricanes and ensure the effective application of science and engineering outcomes for the protection of life and property,'' the report states." And while no individual weather event can be attributed to global warming, a growing body of new scientific data show that rising temperatures are likely increasing the intensity of hurricanes, and other extreme weather events in the U.S. and globally. Hurricane-related losses in the U.S. totaled $168 billion in the last two hurricane seasons, and 1,450 storm-related deaths were reported, according to the report. Analysis performed by the science board found that most hurricane-related funding is focused on short-term forecasting efforts, with less than 2% aimed at improving structural design and engineering for buildings. Annual funding for the government's "focal point'' for storm analysis, the National Oceanic and Atmospheric Administration's Hurricane Research Division, has never exceeded $5.1 million, states the report, and its staff has declined by 30% in the past decade. "Billions of tax dollars have been provided for rescue, recovery, and rebuilding after hurricanes strike," notes the board. "Also important is national investment in the creation of new knowledge, and more effective application of existing knowledge to reduce these enormous public outlays, loss of life, and the associated societal disruption caused by hurricanes." The National Science Board, the governing board of the National Science Foundation (NSF), was established in 1950 to promote the progress of science, advance the national health, prosperity, and welfare, and secure the national defense. One lawmaker, referencing the report, has introduced bipartisan legislation to implement a national research initiative designed to better research, predict and prepare for hurricanes. U.S. Senator Mel Martinez, R-Fla., crafted the proposal working from recommendations presented by the National Science Foundation's new draft report. The bill's original cosponsors include Senators Mary Landrieu, D-La., David Vitter, R-La., and Bill Nelson, D-Fla. "Hurricanes, by far, cause more economic damage to a more widespread area than any other natural disaster. This bill takes sound, scientific recommendations and builds from them a foundation for better, more coordinated research," said Martinez. "Given the enormous cost associated with hurricanes, we ought to better coordinate research and information about hurricane prediction, observation, the vulnerability of structures and how we might develop better evacuation plans." The legislation would place responsibility for implementing and overseeing the NHRI on the National Oceanic and Atmospheric Administration (NOAA) and the National Science Foundation (NSF). The bill sets out specific goals for NHRI research, including predicting hurricane intensification, storm surge, rainfall, and inland flooding, improved observations, assessment of vulnerable infrastructure, interaction of hurricanes with engineered structures, improved computational ability, improved disaster response and recovery, and evacuation planning. The proposal also would establish a National Infrastructure Data Base in order to provide a baseline for developing standards, measuring modification and loss, and establishing public policy to better understand hurricanes and tropical storms. A Science Board task force has studied the issue of nationwide investments in hurricane science and engineering since December 2005. Its report warns that relative to the tremendous damage and suffering caused by hurricanes, the federal investment in hurricane science and engineering is insufficient, and as the board document exclaims, "Time is not on our side." Sources: Sen. Mel Martinez, The National Science Board, and Insurance Networking News Archives

Hartford, Conn. - Aetna announced today the results of its broadest study to date of consumer-directed plans - a review of four years of data to determine the impact of consumer-directed health plans on 1.6 million Aetna members. Aetna is one of many insurers targeting members with improved tools and plans to improve overall performance and management of their members’ health. Included in the latest study were members in an Aetna HealthFund consumer-directed plan, as well as employees within the same employer groups who have chosen other benefits options. Five years after the launch of Aetna HealthFund, consumer-directed plans consistently result in lower medical costs, maintained or improved levels of chronic and preventive care, and increased usage of generic medications and consumer tools and information, the study results noted. The 1.6 million members studied include 134,000 HRA members from 99 employers, 18,000 HSA members from 27 employers, and 1.45 million Aetna members from those same employer groups who have chosen other benefits offerings. These members were compared to a population of 1.4 million Aetna PPO members comprised of all large employer groups. Four years of data was studied for HRA members, two years of data was studied for HSA members, and three years of data was studied for the comparison population. Among the study’s results, Aetna reports that it is receiving favorable reviews on its online tools: its HealthFund members accessed online tools more than twice as often as members of other plans, based on the experiences of five large employer groups. As consumer-driven products shift decision-making responsibility to consumers, other insurers are providing more information to help members make health care decisions. Highmark, Pittsburgh, Pa. contracted with Subimo LLC, a provider of Web-based health care decision support tools. Currently, 75% of Blue Cross Blue Shield plans in the United States use Subimo tools, and nearly 75 million Americans have access through their insurance company or employer. Using Subimo's Healthcare Advisor and Hospital Advisor, members can access health care information in both English and Spanish on hospitals, medical conditions and treatment options. Healthcare Advisor enables consumers to research treatment options, know what to expect prior to surgery and find the appropriate hospital for a certain health need. And Mount Laurel, N.J.-based AmeriHealth New Jersey plans to offer online capabilities through its Web site, www.amerihealthexpress.com, to its group customers and members, starting in 2007. Through a contract with Mount Pleasant, S.C.-based Benefitfocus.com Inc., AmeriHealth New Jersey will improve its self-service Web site by providing new Web tools to create an online resource for health benefit management. Other key findings from the Aetna study point to the ability of Aetna’s members to experience savings and improve their overall health focus: Employers who offered Aetna HealthFund as an option are seeing savings across all products offered. Those who offered an HRA option plan effective in January of 2003 experienced an average medical cost trend of 6.7 percent over a three-year period. Both Aetna HealthFund HRA and Health Savings Account (HSA) members with chronic conditions maintained or improved the level of care they received prior to joining the plan, including a 6% higher usage of inhaled steroids among asthmatics when compared to a similar population. Preventive care was also maintained or improved. For example, first-year HSA members received cervical cancer screenings at a 13.8 percent higher rate than PPO members. Sources: Aetna, Business Wire, Insurance Networking News

"You cannot discover new oceans unless you have the courage to lose sight of the shore."

The stats have arrived- survey results from insurers and researchers have one thing in common: Baby boomers are not prepared for retirement, and therefore insurers could be missing out on business. Some companies are stepping up, using technology to capture this pending market.Allstate's 2006 Retirement Reality Check survey reveals that 40% of Americans admit they are not saving seriously for retirement. One unexpected finding, according to the survey, is that Generation X respondents (those born from 1965 to 1978) are more likely than their elders to describe themselves as financially independent-73% of gen-Xers compared with 67% of baby boomers.

It started with a casual conversation at a CIO luncheon held in conjunction with IASA's annual meeting in Las Vegas in June. Although there were an equal number of men and women at my table, ours was the exception. Most of the other tables were occupied primarily by men. Not surprising in an industry traditionally populated by men, I mused aloud. The discussion between my tablemates that followed became fodder for this month's cover story: a focus on six unique women who embody what it takes to occupy an insurance technology leadership role.No one could argue that there has been a dearth of women occupying such roles. The National Center for Women in Technology (NCWIT), a Boulder, Colo., organization that supports women's participation in professional IT careers, reports that although women represent 46% of the U.S. workforce overall, they held only 32% of computer and information systems management positions from 2004 to 2005 [U.S. Department of Labor (DOL) population survey]. "This is slightly higher than the aggregated average for women's participation among all computer-related occupations (29%) but significantly lower than their participation in professional management positions in general (51%)," a NCWIT spokeswoman told INN.

YOUNG INDEPENDENT AGENTS WANT MORE TECHNOLOGYYoung independent insurance agents identify technology to help them more easily write business and service customers as the second most important thing-after competitive rates-carriers can offer an independent insurance agency. Drive Insurance Group of Mayfield Village, Ohio-based Progressive Casualty Insurance Co. discovered this while conducting a survey of more than 750 young (40 years of age or younger or those who have been in the industry less than 10 years) independent agents. The majority of young independent insurance agents (79%) say technology has been significant in helping them grow their business. Other results from the survey showed 11% have an interactive Web site where customers can quote, buy and contact them. Thirty-four percent have a static Web site where people can learn more about their agency and the services they provide, and 40% don't have a Web site at all.

VOICE SELF-SERVICE AND CUSTOMER INTERACTION MANAGEMENTThe customer interaction management software suite from Genesys Telecommunications Laboratories Inc., headquartered in Daly City, Calif., enables SAP solutions to integrate with voice self-service functionality from Genesys' Voice Platform. The integration of voice self-service with the back and mid-office is designed to simplify access to SAP solutions and make them available to a larger set of users across the organization.

I was speaking with an IT executive recently about service-oriented architectures (SOA), and while he understood the grand vision of what SOA could bring to his company, he claimed it wasn't ready for "prime time." Probing a bit further, he told me it must not be ready because almost every vendor and consultant he spoke with painted a rosy picture of enterprise business value and then immediately did the "old bait and switch" and launched into a discussion of infrastructure "plumbing," with little connection to that vision.SOA promises insurers the ability to weave new systems and legacy applications together to support enterprise business processes across business units, product lines and country borders. Business process management (BPM) tools and business process execution language (BEPL) enable insurers to define business processes composed of Web services from new and legacy applications with minimal programming.

After surveying a cross-industry spectrum of companies, Lori Sechio confirmed what she already suspected: 95% of them had inaccurate information on the number and configuration of their IT assets-a discrepancy that could put these firms at risk of Sarbanes-Oxley (SOX) noncompliance if they were publicly held and did not implement a rigorous IT asset management (ITAM) program."We looked at our client base over the past two years, and 95% of the time the technology assets they had on their books did not match what we actually found," says Sechio, CEO of TekMethods, a Tampa, Fla.-based IT asset management (ITAM) services firm.

In the highly competitive European insurance marketplace, Paris-based Groupama Insurance Co. Ltd. has built a reputation on the personal touch and close relationships it develops and maintains with customers. However, the carrier, which has been in business for more than a century, needed more efficient ways to work with its growing roster of customers. For decades, Groupama relied on customer support and contacts provided through its network of agencies. As business grew, the carrier sought to better capture and provide information in a more consistent and automated fashion, while still retaining the important relationships that had been built between agents and customers.Through business growth and mergers, Groupama became a leading mutual insurance company in France, with eight million customers and annual revenue of close to 13 billion Euros. The company now has more than 26,000 employees across France alone, as well as an additional 4,000 across nine other countries.

Insurance Networking News asked James Bisker, global insurance industry leader, IBM Institute for Business Value, to define knowledge-based, expert and artificial intelligence systems and provide insight into how they can benefit insurance industry operations.INN: There has been some confusion in the marketplace about knowledge-based/expert and artificial intelligence systems. Can you clarify?

Say the word "conversion" in a roomful of insurance technology professionals, and you'll likely hear a cacophony of moans, groans and expletives.That's because converting policy data from one administration system to another is tedious, stressful, time-consuming and costly.

BUSINESS SOFTWARE DEVELOPMENT SERVICES FOR ATLANTICNew York-based Atlantic Mutual Insurance Co. chose MFX to provide business software development, maintenance and enhancement services from MFX's data center facility in Roanoke, Va. MFX hired the application support staff previously supporting Atlantic Mutual's proprietary business software applications. The new team will support Atlantic Mutual, as well as gain knowledge and exposure to MFX's proprietary products including WriteNow, ClaimsAssure and RiskVault. Atlantic Mutual's proprietary business software applications will continue to be owned by Atlantic Mutual.

Carriers operate in a complex environment that challenges their ability to do business efficiently and cost effectively. As regulations become more complex, customer needs, behaviors and demographics, distribution channels, product design and service delivery models are changing. Although technology is key to product and service delivery, most insurers struggle with outdated applications and infrastructures, while facing the looming brain drain as baby boomers retire.Once IT outsourcing was considered merely a method of reducing cost through labor arbitrage. Now the situation is more complicated, with other factors, including regulatory compliance, weighing heavily in many outsourcing decisions. Business continuity-that is, how to stay in business should a major event such as a natural or man-made catastrophe or a pandemic occur-is an emerging reason for outsourcing or distributing some business functions or support facilities across geographies. Each insurer organization is different and the reasons for determining what and when to outsource vary within industry sectors and by business model.

Washington - Congressman Ed Royce (R-CA), a senior member of the House Financial Services Committee, introduced legislation that would create an optional federal charter regulatory regime for life and property/casualty insurance providers. The National Insurance Act of 2006, is companion legislation to S.2509, which was authored by Senators John Sununu (R-NH) and Tim Johnson (D-SD)."The National Insurance Act would create a federal regulatory agency within the Treasury Department; however, it would leave the current state regulatory system in place. An insurance provider could choose to be regulated by the 50 states or by the Office of National Insurance," says Royce. "This concept is not new--the banking system has lived under such a framework for much of our nation's history."

Hartford, Conn. - The Hartford Financial Services Group Inc. enhanced The Hartford At Work Web site to enable employees covered by The Hartford's group benefits plans to more quickly and easily access their benefits information.A new, personalized log-in feature is one recent enhancement to the Web site (www.thehartfordatwork.com). The Web site has been updated with new tools for employees to set up direct deposit for payment of long-term disability claims, to use and print forms and to access personalized benefits account information.

Boston - Liberty Mutual Group enhanced its online workers compensation claims management to provide faster service and better outcomes. The Boston-based insurer provides those responsible for managing a claim instant online access to all of the related documents, while protecting the privacy of confidential medical information."We made a great claims management system even better by slashing the time required for documents from outside resources--such as medical reports, bills and even digital photos--to be available in the system," explains Kevin Carson, who manages the new process. "What took days can now happen in seconds. Outside partners can now send electronic versions of these reports, which instantly become part of our system. Other providers still send paper documents, which we now scan into the system within a day of arriving at Liberty Mutual."

New York - American International Group has appointed 61-year-old Robert Willumstad as its new chairman of its board of directors, effective November 1, 2006. As reported in the popular press, Willumstad resigned from his positions as New York-based Citigroup's president and COO in July 2005 after being passed over for the chief executive's position at the company. Willumstad previously was vice chairman of the Global Consumer Group and led Citigroup's Global Consumer Lending division shortly after the merger of Citicorp and Travelers Group in 1998. Prior to the formation of Citigroup, he was chairman and CEO of Travelers Group Consumer Financial Services. He joined CitiFinancial (then Commercial Credit, a predecessor company) in 1987. Willumstad earlier spent 20 years with Chemical Bank in operations, retail banking and computer systems. Willumstad will replace Frank Zarb, who filled Maurice "Hank" Greenberg's spot when he stepped down in March 2005 amidst a growing accounting scandal. Zarb has served as interim chairman since April 2005. AIG agreed to pay $1.64 billion to settle the allegations against it in February 2006. Willumstad was elected to the AIG Board of Directors in January 2006. He retired in 2005 as president and COO of Citigroup, where he served on its board of directors. He is also a member of the board of directors of S.C. Johnson & Son, Inc., Habitat for Humanity and Adelphi University. "Bob Willumstad is a superb choice to assume the position of AIG Chairman," says Zarb. "I have tremendous respect for his judgment, intellect and expertise in the insurance and financial services industries." Over the past 18 months, AIG's Board of Directors and its senior management have transformed the company in many ways, most particularly in the area of corporate governance, composition of the Board of Directors, transparency, regulatory compliance and the installation of a new management team, headed by president and CEO Martin Sullivan, Zarb added. Also elected to AIG's board was Virginia Rometty, 49, who serves as senior vice president, IBM Global Business Services, managing a network of more than 100,000 consultants and service professionals worldwide. Sources: Business Wire, Forbes

Hartford, Conn. - Many commercial lines insurers imagine a world of potential success by applying to their businesses the predictive modeling techniques now widely used in personal lines, according to a new survey-based study by Conning Research and Consulting, Hartford, Conn. "It is clear from our survey results that commercial insurers are inspired by the advances in predictive modeling that are revolutionizing the personal lines marketplace," said Stephan Christiansen, Conning's director of research. "Since the commercial lines industry is still in the early stage of exploration of predictive modeling, it is not yet clear whether the early and aggressive pursuit of the right combination of data and tools will lead to a permanent competitive edge." The Conning Research study, "Commercial Lines Predictive Modeling: Searching for the Lift" identifies the environmental contrasts between commercial and personal lines, current activity in commercial lines predictive modeling implementation, potential barriers, and likely outcomes in this search for predictive modeling competitive advantage. "Certainly, predictive modeling has become a key tool in personal lines, but that is not necessarily predictive of a success in all commercial lines," Christiansen said. "Our research shows that insurers and modeling vendors perceive strong opportunities in some segments, weaker opportunities in others. And while there are barriers to successful implementation, our analysis has identified potential solutions for these hurdles." Source: Insurance Newslink

New York and Walldorf, Germany - Health insurance companies may be able to collaborate next year with providers, public health authorities and pharmaceutical companies on a new health network being proposed by Germany-based business software provider SAP and Bermuda-based consulting firm Accenture.The Collaborative Health Network (CHN) network initiative will be based on SAP NetWeaver technology, which links a range of information and data. Designed to streamline the way health insurance companies and other stakeholders access, integrate and share information, the network will help organizations maintain reliable, accurate electronic health records that are accessible quickly by multiple parties, the companies said in a release. It will use an enterprise service-oriented architecture (enterprise SOA) to help reduce IT costs and enable automated collaborative processes among industry participants. The first release of the solution will be available mid-2007, predicts the companies.