Data and information management

Seattle and Madison, Wis. — A handful of U.S. auto insurers have begun offering in-car cameras or global positioning equipment to help parents monitor their teenagers' driving behavior, hoping to reduce the number of crashes involving young motorists.

Jersey City, N.J. — Extending its reach in healthcare market as a provider of data, analytics and decision-support solutions, ISO Properties Inc. confirmed the acquisition of Salt Lake City-based HealthCare Insight LLC (HCI), which provides solutions that enable healthcare claims payors to prevent fraud, abuse and overpayment. Terms of the deal were not disclosed.

Mayfield, Ohio - With an overarching goal to create a safer driving experience for its customers, The Progressive Group of Insurance Cos. is offering a virtual driving experience to existing and potential customers across America. The carrier is teaming with Metro City Group, a Laguna Niguel, Calif., owner of a 68-foot multimedia-equipped tractor-trailer, to provide drivers with the chance to test their skills in practical behind-the-wheel driving situations in a safe, virtual environment. With their eyes on the road and their hands securely placed at the “nine” and “three” positions on the steering wheel, people who experience the Progressive Driving Skills Simulator will increase their knowledge of the rules of the road and be better equipped to handle any driving situation. The driving course curriculum includes real-life situations--such as driving in high traffic, congested areas, through foggy or rainy weather or simply passing and yielding to other drivers--and the virtual technology system measures drivers' responses, reaction times, crash reduction techniques and general driving knowledge. "The interactive experience of the Progressive Driving Skills Simulator gives people the chance to 'test drive' their skills in all types of driving situations, which we hope will prepare them for driving on the real--not virtual--road," said Progressive product manager Mike Storbeck from the company's headquarters in Mayfield, Ohio. "Our objective has always been to redefine drivers education and provide a practical training program that gives people a chance to test, and practice, their skills in a safe, simulated environment," said Tim Albright, president of Metro City Group, owner of The Simulator. "We are looking forward to working with Progressive, and are sure that, together, we can make our roads safer and more enjoyable for everyone." Over the next several months, the Progressive Driving Skills Simulator will travel to many local events in the Western United States, including Motor Trend Auto Shows, state fairs and other automotive industry-related events. More information is available at www.progressive.com or www.streetsimulator.com. Source: Progressive Group of Insurance Cos.

WASHINGTON — The practice of insurers basing auto insurance premiums on a customer's credit rating was questioned at a House hearing yesterday, with critics asking whether it disproportionately hurts young people and minorities.

Washington — Gov. Marc Racicot, president of the American Insurance Association (AIA), made the case that the Federal Trade Commission's (FTC) credit study is the latest proof that credit-based insurance scores are fair, objective and beneficial to a vast majority of consumers. The American Insurance Association, Washington, represents approximately 350 major insurance companies that provide all lines of property/casualty insurance and write more than $123 billion annually in premiums. "There is no question that credit-based insurance scores are an efficient and accurate predictor of risk," stated Gov. Racicot. "Their use helps insurers refine their pricing to better reflect an individual's risk profile, resulting in most consumers paying less for insurance." In a statement to a U.S. House Subcommittee, Racicot responded to the FTC study, "Credit-Based Insurance Scores: Impact on Consumers of Automobile Insurance," (July 2007), which is the subject of a hearing today in the U.S. House Committee on Financial Services, Subcommittee on Oversight and Investigations. "It's a simple equation—the better your credit score, the lower your risk in the eyes of insurers— resulting in you paying less for your insurance," concluded Racicot. "The use of credit-based insurance scores has been in existence for more than a decade and has helped expand the availability of insurance in many markets, and increased competition among insurers." Opponents still contend that credit scoring tends to raise premiums overall, that it doesn't correlate directly with risk and that it may serve as a proxy for racial and ethnic discrimination, because some minority groups have lower incomes and are more likely to have credit problems. The FTC's study firmly validates the insurance risk assessment capabilities and consumer benefits of credit-based insurance scores. Most people pay less for insurance because of insurer use of credit, which the FTC's study, and numerous state studies have confirmed. According to the FTC, scores are 'predictive of the number of claims consumers file and the total cost of those claims,' and 'scores also may make the process of granting and pricing insurance quicker and cheaper, cost savings that may be passed on to consumers in the form of lower premiums.' Additionally, the FTC study directly refutes unfounded claims that insurers use credit-based insurance scores to 'unfairly target' minorities saying such scores 'have little effect as a "proxy" for membership in racial and ethnic groups in decisions related to insurance.' The FTC study shows there is no way to determine a person's race, ethnicity or economic status by simply looking at an insurance score. In August, the Federal Reserve also issued a report to Congress that evaluated the use of credit scoring and its effects on the availability and affordability of credit. The Federal Reserve's findings tracked closely with those in the FTC's study. Both clearly established that credit is a reliable risk predictor, and that credit scoring has little to no effect as a proxy for race or ethnicity, reports the government body. In urer use of credit is governed not only by the Fair Credit Reporting Act, which expressly allows for its use, but by dozens of state laws and regulations, including what is considered standard practice in the market, the National Conference of Insurance Legislators (NCOIL) Model Act on Credit. Introduced in 2002, the NCOIL model is law or regulation in 26 states, and it balances insurers' need to use an actuarially sound variable while enumerating certain consumer rights and protections, including not having credit be the sole determining factor for coverage or non-renewal, or allowing an exemption to insurer use of credit due to "special life circumstances" for things such as the death of a spouse or an unexpected medical emergency. The law also requires insurers to re-rate customers with corrected credit reports, notify applicants that credit information is being used in setting rates and let customers know if their credit information results in an adverse action—a higher premium, for example, or denial of coverage. It also is designed to protect consumers' privacy. Sources: PR Newswire, INN archives

Washington — A subgroup of the National Association of Insurance Commissioners (NAIC) is drafting a proposal to amend the existing regulatory framework to allow for single-state licensing of U.S. reinsurers, the insurance body reports. NAIC's Reinsurance Task Force is encouraging the NAIC to develop a reinsurance supervision review department (RSRD) to comprehensively modernize reinsurance regulation in the United States. "As state insurance regulators look at enhancements to reinsurance regulation in the United States," said NAIC President and Alabama Insurance Commissioner Walter Bell, "we are encouraged by supervisory developments in non-U.S. jurisdictions where robust regulation of reinsurance has recently been introduced." In the European Union, for example, member states are in the process of implementing a new reinsurance directive. The NAIC's reinsurance proposal could ultimately provide a framework for mutual recognition between the U.S. and non-U.S. jurisdictions. The RSRD would assist in the evaluation of the extent to which non-U.S. jurisdictions apply regulatory oversight that is "functionally equivalent" to U.S. regulation. Under the proposal, non-U.S. reinsurers domiciled in "functionally equivalent" jurisdictions would be allowed to access the entire U.S. market through a single port of entry state. "U.S. regulators believe that a reinsurance regulatory framework also must be sufficiently flexible to accommodate the rapidly changing reinsurance environment, while providing for appropriate levels of financial stability, solvency and predictability that are critical to a vigorous market, consumer protection and a strong and secure insurance regulatory system," Bell added. NAIC's Task Force will discuss this proposal during a meeting Nov. 7-8, 2007, held in conjunction with the NAIC Financial Summit in Atlanta. For more information, visit www.naic.org/committees_e_reinsurance.htm. Source: National Association of Insurance Commissioners

To find the wellspring of the insurance industry's reputation for being technologically backward, one need only follow the glow of green screens to the heart of carriers' data centers where "Big Iron" still holds sway.To get a countervailing view, one could visit Erie, Pa., where Erie Family Life Insurance Co., a member of Erie Insurance Group, is undergoing a platform consolidation of its policy administration systems.

Most insurance technology executives will tell you that navigating their way to the executive suite is, at the least, a rewarding experience. This adage is true for men and women, but in the male-dominated insurance industry, women tend to relish the ride.

Have you ever had to find a stud to hang a picture? You knew the stud was there ... somewhere ... beneath the surface, but you just couldn't find it without exhaustive searching. Finding studs is like locating knowledge management and knowledge personnel in today's insurance industry: You know they're there, but at first glance they're always hard to find.Around the time of the dot-com boom, knowledge management was one of the buzz-worthy trends infiltrating business and insurance circles. Formally established as a discipline in 1995, knowledge management, and the inception of the chief knowledge officer, had gained steam throughout the late 1990s, but fell off the radar almost completely once the bubble burst.

When INN's editors began research on the topic for this month's cover story, women in insurance industry IT leadership positions, they were charged with finding out how women are faring within the broader context of IT and management. That discovery process turned up some pretty negative press.The Journal, an online forum for educators on the value of teaching technology, quotes the National Center for Women & Information Technology's (NCWIT) research, which indicates an 80% decline in the number of female first-year college students who chose computer science as their field of study between 1996-2004. According to NCWIT, today, women make up only 26% of IT workers in the country.

Pre-retirees and retirees may produce immediate retirement planning profit for insurers, but Generations X and Y also need to start planning for retirement. So how do insurers focus on all generations? "Take a step back and develop a more client-centric approach," says David Schehr, a research director at Stamford, Conn.-based Gartner Inc. "An insurer's technology choice is a reflection of its business choice. There is a perception out there-and there is some reality behind the perception-that insurance organizations tend to approach retirement much as a product sale. In reality, the insurer should first determine its risk tolerance. If an annuity is appropriate, set goals in a retirement planning process. Ask all of the client-centric questions and, from there, if it's appropriate, develop an annuity illustration."SEPARATING THE GENERATIONS

The U.S. Bureau of Labor Statistics estimates that between 2004 and 2014, 1.49 million new computer- and IT-related jobs will be created.The retiring boomer generation may play a role in these figures, according to the Robert Half Technology 2007 Salary Guide. The guide, from Menlo Park, Calif.-based Robert Half Technology, reports that as many as 64 million baby boomers, representing more than 40% of the U.S. labor force, are poised to retire by the end of the decade.

The need for insurers to evolve in today's competitive marketplace is at an all-time high. Whether expanding to reach an untapped niche, or improving systems and practices just to keep the pace, carriers are constantly in need of setting goals and brainstorming effective ways of reaching them.One such company, New York-based XL Insurance, recognized a gaping hole in the U.S. casualty marketplace throughout the late 1990s and early 2000s and, in January 2004, made a strategic decision to swiftly expand into the casualty risk management business by offering a portfolio of risk-sensitive products. The impediment: limited internal resources and a rigid time frame in which to implement new solutions. And, for XL's rapid, creative and successful response to the problem, the company was named third-place winner of Insurance Networking News' 2007 INNovator award.

New technologies and competitive pressures are gradually prying open the doors to carriers' rating systems, long locked away in the silos of proprietary or homegrown systems. These rule-driven systems, designed to evaluate potential policyholder risk and price policies accordingly, are increasingly being called upon to integrate with multiple channels, back-end systems and front-end portals to provide real-time or close to real-time pricing for customers.These changes are being driven by a number of factors, relates Craig Weber, an analyst with Boston-based Celent LLC. Rising customer and agent expectations, for one, are pressuring carriers to provider faster, more accurate and more flexible quoting. In addition, there is continuing pressure to keep a lid on IT spending, causing carriers to look for more efficient solutions.

Mounting competition and market shifts are forcing property/casualty insurers to take a new look at core business processes.With an eye toward profitable growth and increased market share, carriers are now focusing on underwriting-an area long under-served by technology. Today, most underwriting is done through slow, error-prone manual processes or by outdated legacy applications. This inefficiency is driving down profits and eroding sales.

Chicago — Arup, a global multidisciplinary engineering and consulting firm, has joined with Chicago-based Aon Corp. in a strategic alliance that brings to the marketplace a pre- and post-loss consulting service that offers clients an independent, global catastrophic risk management solution.

Orlando, Fla. – Insurance carriers who make transient improvements and do not focus their resources on innovation and differentiation will meet with failure, according to Bill Pieroni, operations vice president for State Farm Insurance Co., Bloomington, Ill.

Manchester, N.H. – Physicians in New Hampshire are being offered a variety of incentives to participate in a statewide e-prescribing program, the latest initiative by the Blue Cross Blue Shield organization designed to improve patient safety, control costs and reduce medication errors. Anthem Blue Cross and Blue Shield in New Hampshire and the New Hampshire Citizens Health Initiative, created by Gov. John Lynch, launched a statewide electronic prescribing, or e-prescribing, program for every physician office in the Granite State, reports the insurer. This follows the announcement made in February by Blue Cross and Blue Shield (BCBS) of Illinois to expand its e-prescribing initiative throughout Illinois. In January, Anthem BCBS announced it would expand the effort in Ohio. Those efforts are ongoing. More than 3 billion prescriptions are written annually in the United States, with medication errors resulting in $77 billion in costs and 7,000 deaths per year (Institute of Medicine, 2006). Yet fewer than 22% of physicians nationwide use the basic capabilities of electronic prescribing, according to the Centers for Medicare and Medicaid Services (CMS). CMS estimates that the use of such technology could eliminate as many as 2 million harmful drug events each year. Electronic prescribing pilots have demonstrated that up to 2% of all prescriptions transmitted this way are changed before being administered to the patient because e-prescribing has alerted the physician to potential safety problems. E-prescribing enables a licensed practitioner to generate a prescription electronically, and then transmit it to a pharmacy. Through this new program, Anthem is offering physicians access to free e-prescribing software, a free mobile pocket PC and a discounted wireless telecommunication plan that will enable them to access real-time patient eligibility, formulary and medication history information from any Internet-enabled PC, or anywhere a cell phone signal is available. Physicians with these tools can write and renew prescriptions anytime, anywhere, for all of their patients, not just Anthem members. “Physicians will now have ample information at their fingertips to help them ensure the safety of their patients, to work more efficiently and to save their patients money on prescriptions,” says Lisa Guertin, president, Anthem Blue Cross and Blue Shield in New Hampshire. Last fall, Gov. Lynch announced his goal to make New Hampshire the first state in the nation where all prescribing health care providers are able to prescribe medication electronically. “Electronic prescribing will help ensure patients get the best possible medication to meet their needs. That will reduce medical errors, save lives and reduce health care costs,” he said. “That is why, working through the Citizens Health Initiative, I’ve made electronic prescribing a priority. This effort will help us meet our goals of making New Hampshire the first state in the nation where all health care providers are able to prescribe medication electronically.” The Anthem e-prescribing program, supported by Sprint and the National E-prescribing Patient Safety Initiative, will include access to a patient’s eligibility, formu aries, adverse drug event alerts and medication history, including medications prescribed by physicians outside of the practice. Most electronic medical record (EMR) systems have e-prescribing capability, however, to date, that technology has not been widely used, and often has not supported the ePrescribing process, reports the insurer. In addition to accessing e-prescribing via EMR systems, prescribers can use smart phone/personal digital assistant devices or stand-alone, Web-based applications. “Not only is this program expected to help reduce medical errors and improve patient safety by providing drug-specific information, it also will help eliminate confusion among drug names and improve communication between physicians and pharmacists,” says Elizabeth Malko, M.D., medical director, Anthem Blue Cross and Blue Shield in New Hampshire. The technology also will allow physicians to send new prescriptions to the pharmacy of the patient’s choice, as well as process refill requests from those same pharmacies. Anthem Blue Cross and Blue Shield in New Hampshire is working with a number of organizations to implement the program, including: The New Hampshire Citizens Health Initiative National E-prescribing Patient Safety Initiative Sprint RxHub LLC, which is providing the technology infrastructure that supports the secure exchange of patient-specific prescribing information between physicians and pharmacy benefit managers, and the transmission of the electronic prescriptions to mail-order pharmacies; SureScripts, operators of the Pharmacy Health Information Exchange, which facilitates the electronic connection between community pharmacies and physicians; and Anthem’s pharmacy benefit management company, which plays a key role by helping to ensure physician access to information, including benefits, eligibility, formularies and medication history. Information about the program was mailed to all New Hampshire physicians in late August. Those who adopt the program will be provided with orientation and training from Anthem. Participating providers who enter into a two-year service agreement with Sprint also will receive a free hand-held device courtesy of Sprint (The HTC 6800 Windows Mobile Device). Sources: Anthem Blue Cross Blue Shield, INN news archives

Washington–Insurance industry associations are giving mostly favorable reviews to the passage of H.R. 2761, legislation that would extend and expand the Terrorism Risk Insurance Act (TRIA). The bill, which passed the lower chamber yesterday by a vote of 312-110, aims to extend TRIA for 15 years, and expand the number of lines covered within it.

New York–A new study says human error, and a failure to address security on an enterprise-wide basis, are undermining efforts by top financial institutions to safeguard data.