Claims

SC BLUES WINS CALL CENTER TECH AWARDBlueCross BlueShield of South Carolina, Columbia, S.C., took top honors in the "Best Use of Technology" category during the 3rd Annual Call Center Excellence Awards held recently in Las Vegas.

FEE REDUCTION FOR INSURANCE SERVICESThe Depository Trust & Clearing Corporation's (DTCC) Insurance Services New York business reports its first fee reduction in history, reflecting growing usage of its services. Insurance Services has automated linkages and data exchange between carriers and their broker/dealer, bank and other distributor partners who market insurance products.

The relationship between IT and the business within insurance companies is a subject insurance professionals will talk about until the cows come home. How do the two work together? Who are the forward thinkers? How does IT know what the business needs and vice versa? These questions plague both sides. CUNA Mutual Group, Madison, Wis., may have figured it out. In fact, this epiphany helped win the company Insurance Networking News' 2007 INNovator of the Year award for its ability to successfully combine the efforts of IT and the business to create a specialized claims processing solution, Claims Express."We're (business and IT) part of the same team," says Tom Gosnell, CIO at CUNA Mutual. "I think it's that close working relationship that helps best position us to be able to share ideas with the business and vice versa and to be able to come up with the right solution across the board."

Reinsurance firms are gripped by a series of major challenges, from increased consolidation in the industry to the rise in securitization and the greater risk primary insurers assume. Although the firms' brokers remain intent on winning clients by accentuating the personal touch, many reinsurers are aggressively adopting technology to confront the stiff obstacles they face.A principal new challenge for reinsurers is the rise in the use of securitization to support life insurance products. Both life and P&C insurance firms are turning to securitization to access capital markets, which has helped lead to a decline in recurring reinsurance since 2005, according to the recent study, "Emerging Trends in U.S. Life Reinsurance: Challenge or Opportunity," from the Hartford, Conn.-based firm Conning Research and Consulting Inc. While recurring reinsurance increased significantly from 1995 through 2000, it flattened out from 2001 until 2004, and then began declining in 2005. "To the extent that some primary insurers, initially several larger ones, use securitization as a substitute for reinsurance, it presents a threat to reinsurers," the study notes.

DIRECT-TO-CONSUMER INSURER CHOOSES RULES MANAGEMENT SYSTEMPrecedent Insurance Co., a subsidiary of American Community Mutual Insurance Co., headquartered in Livonia, Mich., chose Redwood Shores, Calif.-based Corticon Technologies' Business Rules Management System as a critical component in the development and management of Precedent's direct-to-consumer healthcare insurance solution. Precedent plans to deliver a suite of health insurance solutions called REMIX, which includes "Coverage on Demand" plans that charge the insured for only the health insurance coverage they need.

Remember the tale of the boiling frog? As the fable goes, a frog placed in a pot of boiling water will frantically clamber out. That same frog, however, will sit placidly in a pot of tepid water. It will remain there even as the water is slowly heated. Gradual changes go unnoticed, with the frog never recognizing the impending disaster as the water reaches the boiling point.Liken the pot of tepid water to legacy claims systems. P&C insurers are beginning to take a closer look at their systems, but will they act in time or wait on the sidelines and continue claims as usual?

A study of European insurance policy holders by Cambridge, Mass.-based Forrester Research Inc. revealed an overarching reluctance to manage their accounts online. Given many of the major carriers’ desire to drive more customers to the Internet for routine sales and service interactions, the data points to an uphill battle.

Needham, Mass. – Leaders in claims operations are beginning to break away from traditional processes and seek technology to assist them in managing a complex business process that has, to date, been extremely people intensive, according to new research from TowerGroup, Needham, Mass. Claims departments have been historically reluctant to adopt technology solutions, perceiving technology as incapable of duplicating the decision-making process of an experienced claims adjuster.

Zurich, Switzerland - In the latest in a series of insurance-related executive announcements, Zurich Financial Services Group (Zurich) announced the appointment of Christian Orator to the position of Global Chief Claims Officer. He will assume his new role as of August 1, 2007. Orator, 44, and a Swiss and Austrian citizen, will succeed Jane Tutoki who was appointed Chief Claims Officer for Zurich North America Commercial. In his new position, Orator will be responsible for leading a global network of claims professionals and driving continuous improvement in the group's claims capabilities and customer service. He will be report to John Amore, CEO General Insurance, and will be located in Zurich. Orator currently heads special initiatives within the office of the Group Chief Administrative Office. He has extensive experience in the strategic planning, underwriting and claims fields having held numerous executive and operational positions in Austria, the US, Germany and at Corporate Center since joining Zurich in 1989. These roles include serving as a member of the German Executive Board, responsible for commercial lines and broker distribution. He holds a Ph.D. and master's degree in law from the University of Vienna as well as a master's degree in comparative law from Dickinson School of Law in the United States. Source: Zurich Financial Services Group

CIGNA HealthCare, Hartford, Conn., announced yesterday that it will begin providing online precertification this fall to more than 365,000 physicians in its national network.

A former insurance agent from Penn Valley, Calif., was convicted of one felony count of insurance fraud and three misdemeanor counts of petty theft for collecting insurance premiums from clients for commercial general liability and commercial automobile insurance and failed to remit the premiums to insurers. A former Allstate insurance agent was charged with a single count of theft, a Class D felony, after an investigation revealed that he had accepted and deposited his clients' checks without applying the funds toward their policies. A Louisiana-based agent was arrested, transported to jail and booked on four counts of insurance fraud and one count of forgery for altering insurance applications to increase the previously agreed upon premium amount, thereby increasing his commission. In one instance, he forged the client's initials to changes without the client's knowledge or consent.All three of these stories graced the news within a week-and-a-half, and are just a few that have recently made headlines. Independent agents seem to be finding more ways to commit fraud and practice unethical business--creating false insurance entities, fraud rings, misinterpreting policies and just flat--out stealing policyholders' money.

Roughly a decade after insurance carriers began adding customers' credit scores to the stew of statistics used to set premiums for auto and homeowner's coverage, negative reaction and feedback appears to be waning.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.

BANKS SHOULD SET SIGHTS ON RELATIONSTo entice customers to buy more financial products and services, financial services companies need to focus on improving their relationship strategies, according to Gartner Inc., a research firm headquartered in Stamford, Conn.

ISTREAM TO INCLUDE NEW FUNCTIONALITYWhitehill Technologies Inc., Moncton, New Brunswick, announced new functionality in the IStream document automation suite, including IStream Publisher and IStream Document Manager. The IStream suite is designed to enable business users to create 'model documents' that control the language, layout and look of complex files, such as policies and contracts. IStream can be used to create and control virtually any kind of insurance document, from contracts to welcome kits to group booklets. New functionality includes add-ins for Microsoft Word and Adobe Reader, letting users create complex documents in a familiar, easy-to-use, interactive environment. As data or standard wordings change, users can automatically update their documents to reflect those changes. Leveraging industry-standard applications gives insurers the power to create and update documents easily as part of their normal processes.

An accident or catastrophe brings the moment of truth between a carrier and a policyholder. All too often, it's the only interaction between the two parties. The result is a relationship vulnerable to unwanted surprises.For example, a policyholder suffering a loss because of a fire may find a policy failed to cover enough of the current value of the property to make it whole again. Years of appreciation as well room additions and remodeling may not have been updated in the policy.

XL GLOBAL TO USE INTERCEPT TO MANAGE PROCESSESStamford, Conn.-based XL Global Services Inc., a part of the XL Capital Ltd. group of companies, will use Intercept Studio, a flagship product from Baltimore-based AVIcode, to manage business processes worldwide.

Converting a book of business to a new system can be viewed by some as the riskiest part of a new system implementation. However, with proper time and resources, conversions need not be feared. They are all part of the system migration, which is to enable the company to improve its ROI and competitiveness. Each company needs to assess the cost, time and benefits, and if sufficient resources and time are allocated, success is manageable.In single-phase conversions, all data is converted at one time with two options. Sufficient history levels (number of years) are converted that enables the discontinuance of the existing system. And the latest versions of data are converted to allow the new system to be used for all future transactions. The existing system is retained for a period of time for inquiry purposes into past transactions.

Boston, Mass. – Insurers around the country are making changes to their technology areas with the naming of new executives. Three such examples are Liberty Mutual Group, The Guardian Life Insurance Co. of America and NYMagic.James McGlennon has been appointed vice president and CIO for Liberty Mutual Agency Markets, a strategic business unit of Boston-based Liberty Mutual Group that consists of property/casualty and specialty insurance carriers that distribute their products and services primarily through independent agents and brokers.

Chicago - The Blue Cross and Blue Shield Association (BCBSA), Chicago, has established physician and employer advisory groups to further enhance the market development of its Blue Health Intelligence (BHI) initiative, the nation's premier healthcare database comprised of de-identified claims information from up to 80 million lives. "The addition of these groups will help BHI maintain its leadership in healthcare informatics," said BCBSA President and CEO Scott Serota. "We look forward to working with this esteemed group of employers and physicians. Their hard work will result in a database that will enhance the quality of information available to consumers, providers and employers." Launched in 2006, BHI will provide sharper insight into healthcare trends, delivery and best clinical practices, and information about the efficacy of treatments and new medical technologies. BHI compiles, analyzes and organizes data, which can then be used as benchmarks to conduct comparative analyses across a range of healthcare components. The first sets of benchmark data were released to participating Blue Cross and Blue Shield companies in December 2006. "The advisory groups will provide high-level strategic counsel and recommendations that will help us provide insight into important health issues," said Bob Greczyn, Jr., president and chief executive officer, Blue Cross and Blue Shield of North Carolina, and co-chair of the BHI board. The employer and physician advisory groups will be responsible for contributing research-based insights into issues critical to the public's health. In addition, they will monitor new market initiatives in the areas of healthcare costs and quality data, and track healthcare literature and trends in practice and technology. With this knowledge, these advisory groups will help identify opportunities for BHI to form new healthcare solutions in quality and transparency for employers, providers and consumers. "This input from the groups will guide BHI as it continues to establish itself as the most comprehensive collection of healthcare information in the industry," added Alice F. Rosenblatt, executive vice president, integration and information management officer and chief actuary, WellPoint Inc., and co- chair of the BHI board. The groups will meet separately with the first meetings convening this summer. Members will serve one, two-year term. The following is a roster of BHI's employer and physician advisory groups. BHI Employer Advisory GroupMember / Title / Company-- Delia Vetter, Senior Director of Benefits, Employee Services & Programs, EMC Corporation-- Bill Greer, Vice President, Benefits, Kellogg Company-- Mike Stoll, Vice President, Benefits, The Kroger Co.-- Greg Heaslip, Vice President, Benefits, Pepsico-- Bob Ihrie, Vice President, Compensation and Benefits, Lowe's Cos. Inc.-- Steve Lampkin, Vice President, Benefits Department, Wal-Mart Stores Inc.-- Mark Cullen, M.D., Professor of Medicine & Public Health, Yale University School of Medicine; Senior Medical Director, ALCOA-- Jeanne Denz, Director, Global Benefits, General Mills-- Martin Storey, Director of Benefits, Michelin North America-- Tom Jecklin, Manager, Healthcare Benefits, State Farm-- William Strahan, Vice President, Compensation and Benefits, Comcast-- Daniel Green, Deputy Associate Director, Center for Employee and Family Support Policy, Office of Personnel Management-- Anna Fallieras, Program Leader, Health Care Initiatives, GE Company-- Pascale Thomas, Director, Benefits, Corporate Human Resources, Verizon Communications Inc. BHI Physician Advisory GroupName / Employer / Contact, Title / Company-- H. Frank Farmer, Jr., M.D., Chairman and Practicing Physician, Florida Board of Medicine-- David Blumenthal, M.D., MPP, Samuel O. Thier Professor of Medicine and Health Policy, Harvard Medical School; Director, Institute for Health Policy, Massachusetts General Hospital/Partners HealthCare System-- Thomas Henry Lee, Jr., M.D., Professor of Medicine, Harvard Medical School, Network President, Partners HealthCare System-- Joel Bender, M.D., Ph.D., Corporate Director of Health Services, General Motors Corp.-- James R. Claflin, M.D., Specialist, Oklahoma Allergy and Asthma Clinic-- Kelly Kelleher, M.D., MPH, Professor, Ohio State University; Vice President for Health Services Research, Children's Research Institute, Columbus, Ohio-- David Filipi, M.D., MBA, Vice President, Medical Affairs for Methodist Physicians Clinic, Methodist Physicians Clinic, Omaha, Neb.-- William L. Roper, M.D., MPH, Dean, School of Medicine and CEO, UNC Health Care System, University of North Carolina-- Alan M. Garber, M.D., Ph.D., Henry J. Kaiser Jr. Professor; Director, Center for Health Policy; Director, Center for Primary Care and Outcomes Research, Stanford University; Staff Physician, Department of Veterans Affairs-- Jonathan B. Perlin, M.D., Ph.D., MSHA, FACP, Chief Medical Officer and Senior Vice President for Quality, Hospital Corporation of America (HCA)-- Frederick L. Brancati, M.D., MHS, Professor of Medicine & Epidemiology; Director, Division of General Internal Medicine, Johns Hopkins University-- Mark Cullen, M.D., Professor of Medicine & Public Health, Yale University School of Medicine; Senior Medical Director, ALCOA-- Allan Korn, M.D., Senior Vice President and CMO, Office of Clinical Affairs, Blue Cross and Blue Shield Association Source: Blue Cross Blue Shield

London - Guy Carpenter & Company LLC, a New York-based global risk and reinsurance specialist and part of the Marsh & McLennan Companies, will mandate the use of electronic claims file (ECF) for in-scope claims for all Lloyd's markets from Jan. 1, 2008. This decision follows the successful implementation of Guy Carpenter's ECF initiatives and underscores the firm's commitment to further market reform, according to the company.