Core systems

A number of auto insurance carriers adding real-time rating capabilities and other agent- and consumer-friendly enhancements have decided to give The Progressive Group of Insurance Companies a run for its money.

New York - Integro Ltd., a risk management brokerage firm, today announced that Craig Lowenthal has joined the company as managing director and chief information officer. Based in the company's New York headquarters, Lowenthal will be responsible for the applications, infrastructure, telecommunications and technology operations for Integro Ltd. worldwide. Lowenthal has been a technology professional in the insurance industry for more than 16 years, most recently serving as vice president and chief information officer for Hartford Financial Products, a company of The Hartford. He previously held positions with Credit Suisse First Boston and Deloitte & Touche. Lowenthal is active in the Insurance Accounting & Systems Association (IASA) and the Long Island chapter of the Association of Information Technology Professionals (AITP). He is a member of the AICPA, and the NY State Society of CPAs.

The Insurance Accounting & Systems Association (IASA), Durham, N.C., announced today that their members have elected Mark Robison as president for the fiscal year that will begin on July 1, 2005. Robison has risen through the ranks of IASA holding various management team, leadership and volunteer positions within the association during his many years of volunteering. Currently, he serves as vice president and treasurer of Brotherhood Mutual Insurance Company, a Fort Wayne, Ind., a niche regional P&C carrier insuring America's churches and related ministries. Robison joined Brotherhood in January, 1994. Prior to joining Brotherhood, he worked as a manager for Ernst & Young, LLP serving insurance clients, and also within the firm's information systems consulting practice. Robison is a Certified Public Accountant, a Chartered Property Casualty Underwriter, a Fellow, Life Management Institute and holds the Associate in Insurance Accounting and Finance designation from the Insurance Institute of America.

Washington - The Terrorism Risk Insurance Act (TRIA), a temporary program introduced after the Sept. 11 terrorist attacks, has served its purpose and is probably stunting the development of the private insurance market, Treasury Secretary John Snow wrote in a letter to the Senate Banking Committee summarizing the agency's conclusions regarding TRIA.

Genworth Financial is streamlining its operations. The $103 billion company, which serves the lifestyle protection, retirement income, investment and mortgage insurance needs of more than 15 million customers, operates in 22 countries, including the U.S., Canada, Australia, the U.K. and more than a dozen other European countries.

San Mateo, Calif. - Siebel Systems Inc. is stepping up efforts to tackle the rise in fraudulent claims, the San Mateo, Calif., provider of customer-facing solutions reports. Analysts estimate that fraud in the U.S. has jumped 63 % in the past four years, and more than 25% of current U.S. insurance claims contain some element of fraud, contributing to an annual cost of at least $44 billion.

Hartford, Conn. - Aetna has entered into an agreement to acquire HMS Healthcare, a regional health care network. The acquisition will enable Aetna to strengthen its local market presence - particularly in Michigan and Colorado - by providing access to highly competitive health care networks. In addition, Aetna also enters the market for providing network access to other health plans in those states. Aetna will acquire HMS for approximately $390 million, subject to customary post-closing adjustment, and expects to finance the transaction from available cash. Aetna expects to close the transaction during the third quarter of 2005. The privately held HMS, which is majority owned by entities affiliated with KRG Capital Partners, operates under four trade names. PPOM, based in Southfield, Michigan, manages and provides access to networks throughout Michigan and parts of Ohio and Indiana. Flora Health Network operates in Ohio, Indiana and Kentucky. Sloans Lake Preferred Health and Mountain Medical Affiliates, based in Denver, manage and provide access to networks in Colorado. Source: Business Wire

Kansas City, Ks. - General Electric Co. (GE) has unveiled a plan to reorganize its 11 business groups into six. The reorganization places GE's largest Kansas City area operation, GE Insurance Solutions, in the corporate giant's commercial financial services division, headed by Michael Neal. Neal, 52, previously was president and chief executive of GE Capital Corp. and has worked in a variety of GE jobs, both in the United States and overseas, since 1979. GE's insurance operations will continue to be headed by Ron Pressman, president of Insurance Solutions in Kansas City. The new commercial financial services group will also include the parent company's leasing, real estate, corporate financial services and health care financial services operations. The restructuring also touched GE's top management ranks. Three senior executives, including Neal, were promoted to vice chairman. The company did not disclose what changes, if any, the reorganization would mean for Insurance Solution's 850-member Kansas City area work force. GE says its Insurance Solutions, formerly known as Employers Reinsurance Corp., is the world's fourth-largest reinsurance company. The other divisions created by the realignment are GE Infrastructure, which includes energy, transportation and aviation manufacturing operations; GE Industrial, which includes industrial chemicals and technology operations; NBC Universal, the company's broadcasting and entertainment operations; GE Healthcare, which includes medical technologies; and GE Consumer Finance, a global collection of financial services providers. Securities analysts quoted by Reuters and other news services said that the changes play important roles in GE's transition to a more technology-driven company.

It's a great time for P&C carriers to be considering a new policy administration system, as features critical to return on investment, such as customer relationship management and data mining, become relatively standard features in these systems, according to Boston-based Celent Communications. In a report released this week designed to help insurers understand the marketplace, Celent cites additional incentives: a drop in prices, faster implementations, and more plentiful vendor options.

Chicago - Companies want clean, accurate enterprise data to enhance analytics capabilities, say business and IT professionals in a recent survey conducted by Chicago-based data warehousing consultant Knightsbridge Solutions. More than 2,000 respondents among all levels of business and IT functions and industries completed the survey, entitled the "2005 BI Peer Review," this past spring.

Jupiter, Fla. - If life and health insurers maintain their chokehold on technology spending, it shouldn't be a case of pleading poverty. Just-released figures from Weiss Ratings show that profits in that sector climbed nearly 30% last year, the second consecutive year of growth.

Chicago - Brokerage giant Aon Corp. has appointed Bill Pieroni global chief information officer. Pieroni joins Aon from IBM, where he was head of that company's global insurance industry practice. He has extensive technology and industry experience, working with insurance companies and other clients on complex information and technology issues. Pieroni, whose appointment is effective Monday, June 20, will have responsibility for global Aon IT-related activities. He will be based at the firm's headquarters in Chicago.

Northbrook, Ill.-Michael J. Roche has been promoted to senior vice president of Allstate Insurance Co. with responsibility for Allstate Protection technology and administration . Allstate Protection combines the Allstate and Encompass property and casualty offerings through Allstate and independent agencies, respectively. Roche is also now a member of the Allstate senior management team.

Chicago - The third annual study conducted by Chicago-based Foley & Lardner LLP on the costs associated with corporate governance reform shows that the average cost of being public in 2004 increased 33 percent over 2003 for a company with annual revenue under $1 billion.

While CRM systems can get an organization 90 percent of the way toward reaching its customer relationship management objectives, the systems do not answer the key question of "why," according to CRMDirectory.com, a customer management website.

Washington - The Independent Insurance Agents and Brokers of America, Alexandria, Va., says a proposal to establish an optional federal charter for insurance regulation is not the "best or right solution for regulatory reform in the industry." The association of 300,000 business owners reacted yesterday to a letter sent by 135 insurance, national and regional finance companies to the Senate Banking Committee in support of a charter. "The lack of a federal insurance regulator is especially troublesome," the letter stated. The group asked the Committee to consider the fact that, because insurance is solely regulated by the individual states, "there is no Federal regulatory agency to represent the financial regulatory interests of the U.S. insurance industry."

Alexandria, Va.-During the past year, the Agents Council for Technology (ACT), working closely with ACORD and agency management system user groups, has undertaken a major initiative to make commercial lines download more accurate and effective for independent insurance agencies and brokers.ACT's commercial lines download work group, which drew broad participation from carriers, vendors, agents, and user groups, has released a series of important recommendations toward this end.

Oakland, Calif.-A review of hurricane trends by EQECAT Inc. shows a more than a one in three chance of large hurricane catastrophe losses in the United States in the current season, based on current forecasts by the National Hurricane Center (NHC)."Although the current season might not be as severe and unusual as the 2004 season, the potential for large losses in 2005 is likely to be troubling to insurers and reinsurers, which will have to cover the potential hurricane damage claims," says Tom Larsen, senior vice president of EQECAT.

Columbus, Ohio - Healthcare Transaction Processors Inc. (HTP), Columbus, Ohio, announced it is integrating claim overpayment protection services (COPS) into its HTP Transaction Manager suite, which serves health insurers, HMOs, TPAs, IPAs and other medical payment organizations. COPS leverages ClaimsGuard technology from Bloodhound Inc., a Research Triangle Park, N.C., software company. The enhancement will enable real-time editing of claims before they are entered into the client's claim system. Through a series of business and clinical rules and other algorithms, COPS identifies anomalies in clients' claims data, such as potential overpayments, overutilization, duplicate claims and questionable provider billing practices.

Boston - At the National Association of Insurance Commissioners (NAIC) meeting held here this weekend, the NAIC Property and Casualty Reinsurance Study group approved enhanced disclosure requirements for insurers that utilize reinsurance with limited risk transfer features, also known as finite reinsurance. The use of finite reinsurance has received considerable attention over the past several months, because of its misuse by some high-profile insurers. State insurance regulators, working in a coordinated fashion through the NAIC, have been evaluating existing relevant statutory financial reporting since last year. NAIC Property and Casualty Reinsurance Study Group approved enhanced disclosure requirements for insurers that utilize reinsurance with limited risk transfer features, also known as finite reinsurance. The use of finite reinsurance has received considerable attention over the past several months, because of its misuse by some high-profile insurers. State insurance regulators, working in a coordinated fashion through the NAIC, have been evaluating existing relevant statutory financial reporting since last year. The latest proposed disclosures would require an insurer to report to state insurance regulators any finite reinsurance agreement that has the effect of altering policyholders' surplus by more than three percent, or representing more than three percent of ceded premium or losses. Additional reporting requirements regarding contract terms and management's intention in entering the contract have been included to improve transparency. Study Group members also approved a standard attestation form to be signed by the insurer's CEO and CFO attesting that there are no side agreements and that risk transfer has occurred.