(St. Louis, MO-December 11, 2003) Genelco Software Solutions, a division of Liberty Insurance Services Corporation and a developer of software applications for the life and health insurance industry, has joined IBM's ISV Advantage Initiative, a program designed to provide independent software vendors (ISVs) with technical and marketing support to help meet the specific needs of small and medium business (SMB) customers.

POOLESVILLE, Md., Dec. 12-- The insurance Fraud DetectionSystem (FDS), developed using Visual Analytics, Inc.'s award winning product, VisuaLinks, was successfully launched this past week by the Korean Financial Supervisory Services, FSS. The FSS announced that they have implemented and will be using this system to detect fraud through the integrated analysis of insurance-related data including accidents, contracts and claims.

The insurance industry appears poised to remove the "technology laggard" label. Despite a back-to-basics management philosophy brought on by the two-year economic slump, insurance companies continue to move forward with their Internet strategies.For the third consecutive year, Internet-related categories ranked at the top of Insurance Networking News' "Best of the Newest" survey, a poll of 17 technologies rated by insurance company executives and industry experts. The panel rated each technology based on its impact on carriers' operations and its level of innovation.

As 2003 comes to a close, it's a great opportunity for executives to gauge the current business climate and identify trends that will follow through to the new year. For insurance carriers, the near-term outlook is considerably more upbeat than it was 12 months ago.That was the crux of the message delivered by Frank Coyne, ISO chairman, president and CEO, to attendees at the recent ISOTech conference. Coyne's keynote highlighted significant indicators of the firming insurance market: Premiums rose 11% in the first half of 2003; the industry's annualized return on net worth rose a robust 9.7% during the first six months of the year, a significant improvement over the 1.8% gain in 2001; and, the industry's combined ratio is projected to improve to 101, nearly 15 points higher than 2001's level of 115.9.

The old adage of "What, me worry?" isn't part of the lexicon of CIOs, CTOs and other senior level executives in charge of IT functions at life/health and property/casualty firms, according to a survey completed by Celent Communications Inc. in partnership with Insurance Networking News.Twenty executives from small, medium and large carriers paint a picture of insurance IT organizations in a double bind of diminished resources and increased demand this year and anticipated again in 2004.

Ask not for whom the bell tolls; it tolls for carriers' legacy systems. At least that's the conclusion of a survey conducted by Guidewire Software Inc., a San Mateo, Calif.-based Web-based claims system provider.Three-quarters of property/casualty and workers' compensation carriers are engaged in significant claims system projects, according to Guidewire (see chart). "Mid-sized carriers are really biting the bullet-looking at what's in front of them and starting to take steps," says James Kwak, vice president of marketing at Guidewire. "So we're seeing many of them looking at replacing their claims systems."

In the past, insurers could write off fraud expenses with investment income and capital reserves. But those days are over. Reduced investment income and reserves have forced insurers to face such operational bugaboos as fraud and subrogation head on. Fortunately, insurers ahead of the curve have identified technology-based strategies to get to the heart of the matter.

For anyone who has ever owned a car, it's an inevitable question: Continue pouring money into the old jalopy, or cut your losses and buy a shiny new model complete with six-cylinder engine, alloy wheels and keyless entry?

Unlike many insurance companies that reach a point of pain with old technology, Berkley Risk Administrators Co. LLC (BRAC) was not under duress when it decided to migrate to a new platform.

For years, insurance executives have been striving to introduce more streamlined procedures and technologies to improve their financial management and analysis capabilities. One of the primary end goals of these efforts has been to deliver more accurate and timely reporting.From an enterprise resource planning (ERP) perspective, this goal has eluded carriers due to the massive amounts of widely dispersed source data, which often is housed in stand-alone legacy systems that lack flexibility, consistency and transparency.

When executive recruiters at Los Angeles-based Farmers Insurance Group need to fill a vacant position, posting a print version of a job opening to attract prime candidates is regarded as an option-albeit an increasingly obsolete one.Call it an evolution from a "dinosaur" methodology to a "monster" opportunity. That's because at Farmers, a host of job-recruitment Web sites-from Monster.com to Insurance-pros.net-are bringing the lion's share of new claims executives. With such a success rate, it's no surprise that the Web has stepped forward to become the predominant tool of choice to fill staffing.

When John W. Hayden went off to the Massachusetts Institute of Technology for a president's symposium on technology in 1999, a professional epiphany wasn't on his personal radar screen.The president, chairman and CEO of American Modern Insurance Group Inc., Amelia, Ohio, already had a game plan on how to retool the specialty carrier's business strategy and its information technology strategy. It called for the technology strategy to run in parallel with the business strategy.

Information technology strategy plays a critical role in the success of American Modern Insurance Group Inc. (AMIG), a wholly owned subsidiary of The Midland Co., Amelia, Ohio.The provider of specialty personal lines insurance products has an average annual premium of just $450 across its book of business. So having information technology in place "so that the business can flow relatively untouched by human hands is critically important to us. There's not enough money in a $450 premium for us to have to fondle each file," says John Hayden, CEO and president of The Midland Co., and president, CEO and chairman of AMIG.

When the call arrived at PMA Insurance Group's customer contact center in Allentown, Pa., it was unlike most of the in-bound inquiries normally fielded at the sprawling facility."The agents at our contact center assist injured workers seeking claims-related indemnity or medical payment status," explains Meg Schumer, assistant vice president of call centers for the Blue Bell, Pa.-based mid-size property/casualty insurer. "But in the midst of a call, an individual informed one of our agents that he was contemplating ending his life. Our agent began to talk the individual through the crisis-basically got him to calm down-and then sought intervention from crisis counselors, who took it from there."

INN: Explain why technology is a core emphasis at Countrywide Financial.

Few U.S. companies will escape the fallout from the recent financial scandals in corporate America. One outcome of the well-publicized corporate debacles is the Sarbanes-Oxley Act of 2002, requiring CEOs and CFOs of public companies to attest to the integrity of the company's financial statements.In a heavily regulated industry, such as insurance, this increased scrutiny just adds to the already daunting financial reporting burden.

A recent report by the Data Warehousing Institute claims that the annual cost of poor data quality for U.S. industries is $611 billion. This includes direct costs of analyzing and correcting data errors and indirect costs as well.For instance, when errors become exposed to customers and regulators, fines can follow and the backlash can force an avalanche of expensive changes to how an insurance company conducts its business.

With almost 60% of its homeowners insurance business consisting of coverage for homes valued at $1 million and up, Novato, Calif.-based Fireman's Fund Insurance Co. understands that appraising affluent homes is an extremely tall order.Expensive dwellings don't come equipped with run-of-the-mill furnishings. Often, such homes feature rare and exotic items ranging from Pella French doors, Italian granite countertops, premium carpeting and elaborate building materials.

Insurers are becoming insular with information technology maintenance and investment priorities. Referring to it as internal "housecleaning," Cary, N.C.-based Sapiens International Corp. states that U.S. insurers are shifting gears to emphasize internally-driven IT efficiencies as a better way to control costs.Findings from a recent survey conducted by Sapiens, a global IT solutions provider, reveal that externally focused activities, such as business process outsourcing (BPO), customer relationship management (CRM), and standards implementation-such as ACORD XML, now rank significantly lower on the IT priority scale than internal initiatives.

The economy has tempered IT spending within the insurance industry in recent years, as many carriers reigned in their project development to concentrate on essential projects. This year, spending appears to be bouncing back somewhat, according to the findings of Insurance Networking News' recent survey of 95 carriers, agents, brokers and services firms.For starters, insurers' spending on packaged applications and software development appears to be on the upswing for the remainder of 2003. Carriers have budgeted an average of $1.4 million for packaged software for 2003, up by more than 14% from what they spent in 2002, the survey reveals (See chart, page 19).