Customer experience

New York - A National Association of Insurance Commissioners personal lines working group expressed mixed feelings recently concerning a draft proposal that would authorize insurers to ignore current filed rates and competitively bid on applicants seeking coverage thorough a proposed electronic insurance exchange system. The "Alternative Recommendation for a Pilot Project Testing Pricing Freedom" draft, which was presented via conference call on February 22 to the Personal Lines Market Regulatory Framework Working Group, is based on the use of a technology platform called the "Insurance Exchange," sources at NAIC confirmed. The insurance exchange technology, first publicized by the Council of Insurance Agents and Brokers and reported in Insurance Networking News, March 2007, p. 6), is designed to streamline the underwriting process, says the NAIC draft proposal. The premise of the technology is to enable an insurance producer to complete a single application for a variety of insurance products and to submit that single application to multiple insurers. Insurers respond with a quote if they are interested in the risk. Once the applicant selects the insurer, the producer uses the insurance exchange to inform the insurer and the insurer issues the policy to the applicant. According to the draft proposed to the NAIC Working Group, which functions under the auspices of the NAIC's Speed to Market Committee, "In exchange for providing easy access to multiple quotations, the insurers could be offered pricing freedom through a pilot project that is enabled by interested insurance regulators." The proposal states that participating states use discretionary authority contained in current rating laws to enable a pilot project that: *Applies to personal auto insurance and homeowner insurance coverages (other products could be added); *Authorizes insurers to ignore current filed rates and competitively bid on applicants seeking coverage thorough the electronic insurance exchange system; *Allows an insurance producer selected by the applicant to assist the applicant with completion of a single application that is submitted through the system to all interested insurers; *Requires insurers to disclose coverage terms and conditions to the applicant, through the insurance producer, along with the competitive bid detailing the cost for the coverages requested by the applicant; *Provides insurance regulators with statistical information needed to evaluate whether the pricing freedom is providing applicants with sufficient information and broad selection among a variety of insurers and insurance products; and *Leads to a formal evaluation of the success or failure of the pilot project by participating states. The introduction of the draft, says Working Group chair D. David Parsons, Deputy Commissioner, State of Alabama Department of Insurance, was merely that: a simple introduction to the Working Group of the topic as "floating option" for possible consideration for a larger agenda of "developing a system that would be less intrusive, and that would allow carriers to get their products out to consumers in a more efficient manner." "We didn't have an official vote count or even a quorum," Parsons told INN, "but we did hear a number of states express disapproval [about the pilot], and a few that expressed positive feedback." Parsons attributes the disparate responses to the insurance industry's culture. "In some ways state regulation is cumbersome to the industry," he said. "There are so many diverse opinions. Our working group's charge is to try to improve that... get to the public more efficiently... at less cost to them and with good protection." Parsons admitted that the industry faces several large hurdles, including differences in filing issues, licensing issues and more. "There is a lot to be worked out," he said. "But this is a good group and they are passionate about their positions. We would like to see, at a minimum, flex rating come out of this," he said. Source: National Association of Insurance Commissioners

Kansas City, Mo. - Recent statistics show that while consumer complaints decreased for the third consecutive year, the reasons behind those complaints have remained relatively the same for the past five years: Consumers want faster customer service. According to data collected by the National Association of Insurance Commissioners (NAIC), the top three reasons consumers filed formal complaints against their insurance companies in 2006 were delays, denials of claims and unsatisfactory settlement offers. Rounding out the top five sources of consumer complaints were policy cancellations and premiums/insurance rating issues. The NAIC maintains a centralized electronic Complaint Database System (CDS), through which states voluntarily report “closed” complaints. A closed complaint is a complaint that has been investigated and resolved to the satisfaction of the state or jurisdiction in which it is filed. First established in 1990, the CDS was significantly expanded in 1998 and now houses more than 2 million complaints. A total of 190,572 consumer complaints were reported to CDS in 2006, a 7.8% decrease from the previous year. This information is based on the submission of data to the NAIC from the state insurance departments. The NAIC does not collect all complaint data from all states. Aggregate data compiled from the CDS can be accessed on the NAIC’s Web site through the Consumer Information Source link. By accessing this program, consumers can obtain company–specific complaint ratios (the ratio of the company’s market share of complaints compared to the company’s market share of premiums for a specific policy type), as well as aggregate counts of complaints by state and by type of coverage for specific companies. Below is details the top five types of complaints and the top five complained about insurance coverages for 2006. Included is the total number of complaints (for complaint type and line of coverage), followed by the percentage of overall complaints each type represents. (Example: “Delays” make up 21.9% of all complaints received by the NAIC in 2006.) Top 5 Types of Complaints in 2006: Delays: Total number reported: 41,647; Percentage 21.9% Denial of Claim: Total number reported: 3,601; Percentage 18.7% Unsatisfactory Settlement Offer: Total number reported: 26,556; Percentage 13.9% Cancellation: Total number reported: 12,467; Percentage 6.5% Top 5 Complaints by Type of Coverage in 2006:Auto: Total number reported: 71,302; Percentage 37.4% Accident & Health: Total number reported: 62,954; Percentage 33.0% Homeowners: Total number reported: 24,785; Percentage 13.0% Life & Annuity: Total number reported: 16,939; Percentage 8.9% Commercial Multiperil: Total number reported: 3,521; Percentage 1.9%

Gig Harbor, Wash. - Jon Kaplan, head of financial services, advertising, for Google, Inc. and Roger Dawson, a nationally recognized speaker, negotiator and author, will headline the 2007 annual meeting of the Insurance Marketing Communication Association (IMCA), June 3-6, 2007 in Newport, R.I. In his role, Kaplan sets the overall strategy for Google's national advertising sales team and for enhancing product offerings, and works with regional sales teams on strategic clients. Roger Dawson, a full-time speaker and author, is considered a negotiations expert. A full-time speaker since 1982, Dawson has trained managers and salespeople at top companies and leading associations throughout the United States, Canada and Australia. Jeanne Salavatore, senior vice president, public affairs, Insurance Information Institute, is also scheduled to address the group. She will "grade" the insurance industry on how well it is doing in its communications in her presentation, "Why Insurers Should Care About Communications." Source: Insurance Marketing Communication Association

Chicago - The fortunes of two industries are beginning to intertwine, according to Cards & Payments, a Chicago-based sister publication of Insurance Networking News.

DIRECT MARKETING TOOL ENHANCEDMelissa Data announced the addition of multi-platform capabilities to the Canadian Address Object, a complementary product to the Rancho Santa Margarita, Calif. company's Data Quality Suite, a direct-marketing tool that verifies and corrects address, phone and contact data.

STRATEGIC GOALS GUIDE IT SPENDINGSenior insurance IT executives are making strategic investments, but budgets and staff size are generally flat or growing only modestly.

INSURER AUTOMATES INTERNAL CONTROLSPhysicians Mutual, based in Omaha, Neb., selected OpenPages FCM for its financial controls management initiatives. OpenPages FCM is an enterprise financial controls management solution designed to reduce time and resource costs associated with ongoing financial reporting regulations. It is expected to reduce Physician Mutual's time and costs associated with efforts to comply with changes to National Association of Insurance Companies financial reporting regulations. "OpenPages allows us to automate our ongoing assessment and monitoring of internal controls and ensure that compliance initiatives align with our business strategy," says Barbara Bergmeier, senior vice president of internal audit, Physicians Mutual.

Waukesha, Wis. - Markel American Insurance Co. launched its new Web site (www.markelinsuresfun.com). The site is designed to provide a single access point to people seeking to insure their recreation. The site enables customers and potential customers to quote and purchase insurance for their motorcycle, boat, personal watercraft and ATV all in one place. In addition, the site will be regularly updated with industry news, stories and trends to provide visitors with the information they are looking for to stay up to date on their favorite activities.

Franklin Lakes, N.J. - Patients are 58% more likely to switch to a lower-cost prescription drug when assisted by an online tool that allows them to compare prices, a new study from pharmacy benefit manager Medco reveals.

Bloomfield, Conn. - Juan Conde joined Bloomfield, Conn.-based CIGNA HealthCare as CIO. He is responsible for the IT strategy and delivery of CIGNA's consumer-focused technology solutions.

Chicago - Blue Cross and Blue Shield (BCBS) of Illinois announced that it plans to expand its e-prescribing initiative throughout Illinois. This follows on a plan BCBS announced in January in which the Anthem BCBS group would expand the effort in Ohio.

New York - Look for accelerated growth this year of the outsourcing trends that predominated in 2006: Expansion of business process outsourcing (BPO), the maturing of the offshore market and more multi-sourcing at the expense of single, one-off “mega-deals.”

Kansas City, Mo. - U.S. Census projections issued in 2004 state the number of U.S population speak a language other than English at home will continue to trend upward. Two insurance industry organizations addressed this trend by launching Spanish-language Web sites.

Boston - Wrap platforms are changing the way UK insurance firms are able to distribute their products and will raise a number of challenges for IT departments, according to a new report issued by Boston-based research firm Celent LLC.

Cambridge, Mass. - Across every generation, females are more likely than males to say that life insurers meet their needs, and the relationship female seniors have with their life insurance providers is especially strong, according to new report by Forrester Research, Cambridge, Mass. Forrester's Report, "Do Financial Institutions Meet Customer Needs" evaluated the relationships consumers have with eight types of financial institutions, including insurance. This most recent report is based on findings from Forrester's NACTAS Q3 2006 Survey. No surprise, banks were reported as the most prevalent provider, and seven of 10 consumers in the report--across all age groups--believe that banks meet their current needs. Both male and female seniors believe that home and auto insurers meet their needs. At the other end of the spectrum, only about half of consumers of all ages think that their credit card providers meet their needs. Across all of the other institutions, the Generation Y Group (consumers born between 1976 and 1982) are the least likely to have a relationship with a financial institution, says Bruce Temkin, Forrester senior analyst and author of the report. "We also found that credit card providers most often meet the needs of seniors and life insurers meet the needs of females more often than they do males. Looking across the institutions, it's clear that younger Boomers could use more attention," says Temkin. For more information, visit www.forrester.com

New York - A number of life insurance executives recently surveyed by Deloitte & Touche USA LLP's insurance industry group related that technology is more likely to be considered a barrier at this point in time, rather than a strength. Many stated they can do better in terms of streamlining the growth processes to enhance the distributor and customer experience, and they do not believe their technology is as advanced as it can and should be.The survey of 20 C-suite executives from top life insurance companies, as well as an analysis of life insurance industry growth patterns contributed to a report--"Organic Growth for Life Insurers: A Playbook for Market Advantage."

Forget the stereotypes--ASP isn't just for small, IT-challenged carriers any more, and many of the ASP problems that gave insurance companies pause only a few years ago are being solved. Dollar savings and fast time to market are still big pluses for ASP, but today there are a lot of other reasons to consider it.The market among insurance carriers for ASPs, or application service providers, is growing by about 10% a year-slower than in most other industries-according to Marc Cecere, vice president and principal analyst for Forrester Research in Cambridge, Mass. From a supply-side perspective, that's partly because of the structure of the insurance industry and partly because of the regulatory scene for insurance companies.

ADOBE EXPANDS ACROBATAdobe Systems Inc., San Jose, Calif., introduced Adobe Acrobat Connect software, a Web conference and collaboration product with "always-on" personal meeting rooms. It is designed to enable workers to connect online instantly with a Web browser and the ubiquitous Flash Player software. Together with Adobe Acrobat 8 software the expanded Acrobat family accelerates the flow of business by allowing people to work together in real-time, according to Adobe. The new, extended Acrobat family brings together the two critical components of knowledge work-documents and people. Acrobat Connect enables users to choose a Web address for their online personal meeting room, with unlimited use for up to 15 participants for one monthly fee.

CANAL SELECTS TRUMBULL FOR SUBROGATION MGT.Canal Insurance Co., Greenville, S.C., entered an agreement with Trumbull Services, Windsor, Conn., to use Trumbull's Subrooutsource, an internally developed, advanced system designed to enhance subrogation recovery activities for all lines of business nationwide. Trumbull, in conjunction with an experienced subrogation team, will manage the entire subrogation process, leveraging the system's abilities to increase recoveries through effective resource allocation, automated workflows and a continuous improvement model.

New York - Two technology providers each released a Nationwide Health Information Network (NHIN) prototype in one week—first Armonk, N.Y.-based IBM and now Accenture. Accenture demonstrated its prototype solution for a fully integrated health information system at the 3rd Nationwide Health Information Network Forum on Thursday, Jan. 25, 2005, in Washington, D.C., where IBM also demonstrated its prototype. The solution shows that patient data can be extracted from disparate information systems and converted to a common format that enables sharing among physician offices, medical laboratories, hospitals and other clinical settings.