Claims

Washington, D.C. - The U. S. Department of Labor's Employee Benefits Security Administration (EBSA) today announced a new interactive resource Web site for employers in complying with the various federal health benefit laws. The Health Benefits Advisor is designed to help employers and other plan officials understand their responsibilities in operating group health plans. Private-sector employers can obtain guidance about operating their group health plans. The site provides benefit professionals with an overview of certain federal laws, such as COBRA, HIPAA, the Newborns' and Mothers' Health Protection Act, the Mental Health Parity Act and the Women's Health and Cancer Rights Act, all of which affect health insurance. Employees can also visit the site to learn more about their rights and options pertaining to health coverage provided by a private-sector employer. The online resource also offers general advice to workers undergoing life changes, such as marriage, childbirth, job loss and retirement. The site does not offer information, however, on an employee's specific plan or health plans provided by federal, state or local governments and churches. Source: U.S. Newswire, Employee Benefits News

Washington, D.C. – From stepping up with renewable energy projects to incorporating futuristic underwriting models, the insurance industry must do more to address the growing impact of climate change-induced damages, according to a new report by World Wildlife Fund (WWF) and Munich-based global insurer Allianz Group.

Mountain View, Calif. - eHealth Inc., the parent company of eHealthInsurance Services Inc., spent $50 million developing an electronic platform to sell health insurance through the Internet. The company’s business model? Serve the growing market of uninsured and underinsured consumers with online tools and ultimate health insurance products. The Mountain View, Calif., company, plans to raise $47.1 million in an initial public offering next week. In its prospectus the market for private health insurance brokering is a mess, stating that except for large companies buying insurance in bulk, finding medical coverage is time-consuming, paper-wasting, complicated and expensive. Most individuals, families and small businesses who buy their own medical coverage find insurers using local agents who serve a single community, offering insurance from a small handful or even a single insurance carrier. Through its Web site, eHealth has sold health insurance electronically to 325,000 consumers, and points to this statistic: More than 40% of those customers were uninsured before finding the site. That means the company thinks its site, which offers 5,000 health insurance products through 150 insurers, including Aetna and UnitedHealth, can tap into an underserved and fragmented corner of the estimated $658 billion market for private medical insurance. About 17 million Americans, including self-employed people, buy their own medical insurance (as opposed to electing coverage through an employer's plan), and the company said that number is growing. A rising number of small businesses have stopped offering medical benefits to employees, forcing these people to buy their own coverage or risk life without insurance, the company said. The U.S. Census estimates 46 million Americans are uninsured, and the company said many of these people have jobs, make decent salaries and would buy their own coverage if only they could find an affordable plan. That's where eHealth's business model comes in. eHealth's site offers online rate quoting and information, health plan comparisons, and online applications linking consumers with insurers. The variety of policy offerings and efficient brokering process in theory would help consumers find cheaper coverage. As a broker, eHealth offers insurers new market opportunities, access to electronic data about consumers and simplified policy processing, which reduces costs. The company takes a percentage off the insurers' premiums. In 2005, eHealth booked $41.8 million in revenue, almost all from brokerage commissions, compared with $9.3 million in 2001. For the six months ending June 30, 2006, eHealth reported net income of $2.7 million, compared with a net loss of $209,000 for the same period a year ago. The company, led by Chief Executive Gary L. Lauer, has lost money most quarters since its 1997 founding as it sinks money into technology and marketing through direct mail, television and radio. But it hopes that by harnessing the Internet, it can grab a large share of a huge and largely untapped market. The company plans to sell 5 million shares at $10 to $12 apiece, giving the deal a proposed market cap of $271 million, and is reportedly using joint-lead managing underwriters such as Morgan Stanley and Merrill Lynch. The stock will trade on the Nasdaq under the symbol "EHTH." Source: Associated Press, MSN Money, Red Herring

Worcester, Mass. - The Hanover Insurance Group Inc., reports that it has enhanced its homeowners quoting and issuance process, making it easier for its agent partners to do business. The 150-year old Worcester, Mass., company, which sells property and casualty products and services to individuals, families and businesses through a network of independent agents, reports that it has implemented distinct and separate quote and issuance processes and introduced screens that are easier to read and navigate. The simplified homeowners screens were recently piloted with in Connecticut and Virginia, and include homes, condominiums and tenants policies. Other improvements include helpful links for cross selling allow agents to easily offer additional policies such as second home, auto or umbrella and improved navigation and "help" icon efficiently answers agent questions. Hanover also provides a link to the Marshall & Swift/Boeckh Replacement Cost Estimator, to help foster agent/customer discussions about the adequacy of their coverage. The enhancements, which were made based on direct feedback from agent partners, should cut the time it takes to quote a policy by 30% and reduce the number of accounts referred to an underwriter, reports the company. "We believe these enhancements, as well as planned future enhancements, will deliver additional growth opportunities for independent agents," says Marita Zuraitis, president of The Hanover's property and casualty companies. The improvements in agent services comes on the heels of last year's launch of Connections Auto product, which has driven private passenger automobile new business growth of more than 150%, reports the company. Source: PRNewswire

Washington, D.C. - Subsequent to a June 2006 report by the Surgeon General that confirmed secondhand smoke causes lung cancer and heart disease, the American Academy of Actuaries (AAA) has released a dollar figure to go along with it. The effects of secondhand smoke on nonsmokers in the United States cost nearly $6 billion in medical and economic costs in 2004, according to an actuarial study entitled "Economic Effects of Tobacco Smoke." Cori Uccello, senior health fellow of the Washington-based AAA, analyzed the implications of the study, which estimated costs related to diseases caused by secondhand smoke. Medical costs to care for nonsmokers suffering from coronary heart disease and lung cancer as a result of secondhand-smoke exposure is estimated to have reached $2.6 billion in 2004," Uccello said. "This includes the medical care of nearly half a million people suffering from coronary heart disease, and an estimated 2,500 patients newly diagnosed with lung cancer -- an extremely deadly form of cancer -- as a result of exposure to secondhand smoke." Using U.S. Bureau of Economic Analysis data, the Americans for Nonsmokers Rights report that employees who smoke cost businesses in Marion County, Indiana, $260.1 million in increased health insurance premiums, lost productivity, and absenteeism, as well as additional recruitment and training costs resulting from premature retirement and deaths due to smoking. In addition, economic losses due to lost wages and benefits from disability or premature death of nonsmokers caused by exposure to secondhand smoke are estimated at $3.2 billion for 2004, giving a low-bound cost total of nearly $6 billion. In an effort to mitigate risk, many healthcare providers, such as Aetna, Cigna and Blue Cross Blue Shield, have implemented online campaigns to educate their policyholders on the dangers of second-hand smoke, and most carrier offer premium discounts to members who stop smoking. "It is important for policymakers, who must contemplate public smoking restrictions, to understand both how many people suffer ailments due to secondhand smoke as well as the costs involved," Uccello said. Uccello said actual costs could be even higher, because they do not include costs from other diseases and conditions that the Surgeon General identifies as being caused by secondhand smoke, such as low birth weight and sudden infant death syndrome. In addition, the Surgeon General finds evidence to suggest, but not prove, that secondhand smoke causes other conditions, such as asthma and an increased risk for chronic pulmonary disease. An estimated 50,000 people die annually due to illnesses caused by exposure to second-hand smoke. Sources: PRNewswire, American Academy of Actuaries

Arlington, Va. - As insurers scramble to minimize risk and make the most of business opportunities related to climate change and other severe weather-related losses, the National Science Board, Arlington, Va., is asking for $300 million in additional funds to help fund a multi-agency effort to improve hurricane science and engineering research. In a draft report released yesterday, "Hurricane Warning: The Critical Need for a National Hurricane Research Initiative (NHRI)'' the report calls for "a determined effort to maximize our understanding of hurricanes and ensure the effective application of science and engineering outcomes for the protection of life and property,'' the report states." And while no individual weather event can be attributed to global warming, a growing body of new scientific data show that rising temperatures are likely increasing the intensity of hurricanes, and other extreme weather events in the U.S. and globally. Hurricane-related losses in the U.S. totaled $168 billion in the last two hurricane seasons, and 1,450 storm-related deaths were reported, according to the report. Analysis performed by the science board found that most hurricane-related funding is focused on short-term forecasting efforts, with less than 2% aimed at improving structural design and engineering for buildings. Annual funding for the government's "focal point'' for storm analysis, the National Oceanic and Atmospheric Administration's Hurricane Research Division, has never exceeded $5.1 million, states the report, and its staff has declined by 30% in the past decade. "Billions of tax dollars have been provided for rescue, recovery, and rebuilding after hurricanes strike," notes the board. "Also important is national investment in the creation of new knowledge, and more effective application of existing knowledge to reduce these enormous public outlays, loss of life, and the associated societal disruption caused by hurricanes." The National Science Board, the governing board of the National Science Foundation (NSF), was established in 1950 to promote the progress of science, advance the national health, prosperity, and welfare, and secure the national defense. One lawmaker, referencing the report, has introduced bipartisan legislation to implement a national research initiative designed to better research, predict and prepare for hurricanes. U.S. Senator Mel Martinez, R-Fla., crafted the proposal working from recommendations presented by the National Science Foundation's new draft report. The bill's original cosponsors include Senators Mary Landrieu, D-La., David Vitter, R-La., and Bill Nelson, D-Fla. "Hurricanes, by far, cause more economic damage to a more widespread area than any other natural disaster. This bill takes sound, scientific recommendations and builds from them a foundation for better, more coordinated research," said Martinez. "Given the enormous cost associated with hurricanes, we ought to better coordinate research and information about hurricane prediction, observation, the vulnerability of structures and how we might develop better evacuation plans." The legislation would place responsibility for implementing and overseeing the NHRI on the National Oceanic and Atmospheric Administration (NOAA) and the National Science Foundation (NSF). The bill sets out specific goals for NHRI research, including predicting hurricane intensification, storm surge, rainfall, and inland flooding, improved observations, assessment of vulnerable infrastructure, interaction of hurricanes with engineered structures, improved computational ability, improved disaster response and recovery, and evacuation planning. The proposal also would establish a National Infrastructure Data Base in order to provide a baseline for developing standards, measuring modification and loss, and establishing public policy to better understand hurricanes and tropical storms. A Science Board task force has studied the issue of nationwide investments in hurricane science and engineering since December 2005. Its report warns that relative to the tremendous damage and suffering caused by hurricanes, the federal investment in hurricane science and engineering is insufficient, and as the board document exclaims, "Time is not on our side." Sources: Sen. Mel Martinez, The National Science Board, and Insurance Networking News Archives

Hartford, Conn. - Aetna announced today the results of its broadest study to date of consumer-directed plans - a review of four years of data to determine the impact of consumer-directed health plans on 1.6 million Aetna members. Aetna is one of many insurers targeting members with improved tools and plans to improve overall performance and management of their members’ health. Included in the latest study were members in an Aetna HealthFund consumer-directed plan, as well as employees within the same employer groups who have chosen other benefits options. Five years after the launch of Aetna HealthFund, consumer-directed plans consistently result in lower medical costs, maintained or improved levels of chronic and preventive care, and increased usage of generic medications and consumer tools and information, the study results noted. The 1.6 million members studied include 134,000 HRA members from 99 employers, 18,000 HSA members from 27 employers, and 1.45 million Aetna members from those same employer groups who have chosen other benefits offerings. These members were compared to a population of 1.4 million Aetna PPO members comprised of all large employer groups. Four years of data was studied for HRA members, two years of data was studied for HSA members, and three years of data was studied for the comparison population. Among the study’s results, Aetna reports that it is receiving favorable reviews on its online tools: its HealthFund members accessed online tools more than twice as often as members of other plans, based on the experiences of five large employer groups. As consumer-driven products shift decision-making responsibility to consumers, other insurers are providing more information to help members make health care decisions. Highmark, Pittsburgh, Pa. contracted with Subimo LLC, a provider of Web-based health care decision support tools. Currently, 75% of Blue Cross Blue Shield plans in the United States use Subimo tools, and nearly 75 million Americans have access through their insurance company or employer. Using Subimo's Healthcare Advisor and Hospital Advisor, members can access health care information in both English and Spanish on hospitals, medical conditions and treatment options. Healthcare Advisor enables consumers to research treatment options, know what to expect prior to surgery and find the appropriate hospital for a certain health need. And Mount Laurel, N.J.-based AmeriHealth New Jersey plans to offer online capabilities through its Web site, www.amerihealthexpress.com, to its group customers and members, starting in 2007. Through a contract with Mount Pleasant, S.C.-based Benefitfocus.com Inc., AmeriHealth New Jersey will improve its self-service Web site by providing new Web tools to create an online resource for health benefit management. Other key findings from the Aetna study point to the ability of Aetna’s members to experience savings and improve their overall health focus: Employers who offered Aetna HealthFund as an option are seeing savings across all products offered. Those who offered an HRA option plan effective in January of 2003 experienced an average medical cost trend of 6.7 percent over a three-year period. Both Aetna HealthFund HRA and Health Savings Account (HSA) members with chronic conditions maintained or improved the level of care they received prior to joining the plan, including a 6% higher usage of inhaled steroids among asthmatics when compared to a similar population. Preventive care was also maintained or improved. For example, first-year HSA members received cervical cancer screenings at a 13.8 percent higher rate than PPO members. Sources: Aetna, Business Wire, Insurance Networking News

"You cannot discover new oceans unless you have the courage to lose sight of the shore."

The stats have arrived- survey results from insurers and researchers have one thing in common: Baby boomers are not prepared for retirement, and therefore insurers could be missing out on business. Some companies are stepping up, using technology to capture this pending market.Allstate's 2006 Retirement Reality Check survey reveals that 40% of Americans admit they are not saving seriously for retirement. One unexpected finding, according to the survey, is that Generation X respondents (those born from 1965 to 1978) are more likely than their elders to describe themselves as financially independent-73% of gen-Xers compared with 67% of baby boomers.

YOUNG INDEPENDENT AGENTS WANT MORE TECHNOLOGYYoung independent insurance agents identify technology to help them more easily write business and service customers as the second most important thing-after competitive rates-carriers can offer an independent insurance agency. Drive Insurance Group of Mayfield Village, Ohio-based Progressive Casualty Insurance Co. discovered this while conducting a survey of more than 750 young (40 years of age or younger or those who have been in the industry less than 10 years) independent agents. The majority of young independent insurance agents (79%) say technology has been significant in helping them grow their business. Other results from the survey showed 11% have an interactive Web site where customers can quote, buy and contact them. Thirty-four percent have a static Web site where people can learn more about their agency and the services they provide, and 40% don't have a Web site at all.

VOICE SELF-SERVICE AND CUSTOMER INTERACTION MANAGEMENTThe customer interaction management software suite from Genesys Telecommunications Laboratories Inc., headquartered in Daly City, Calif., enables SAP solutions to integrate with voice self-service functionality from Genesys' Voice Platform. The integration of voice self-service with the back and mid-office is designed to simplify access to SAP solutions and make them available to a larger set of users across the organization.

In the highly competitive European insurance marketplace, Paris-based Groupama Insurance Co. Ltd. has built a reputation on the personal touch and close relationships it develops and maintains with customers. However, the carrier, which has been in business for more than a century, needed more efficient ways to work with its growing roster of customers. For decades, Groupama relied on customer support and contacts provided through its network of agencies. As business grew, the carrier sought to better capture and provide information in a more consistent and automated fashion, while still retaining the important relationships that had been built between agents and customers.Through business growth and mergers, Groupama became a leading mutual insurance company in France, with eight million customers and annual revenue of close to 13 billion Euros. The company now has more than 26,000 employees across France alone, as well as an additional 4,000 across nine other countries.

Insurance Networking News asked James Bisker, global insurance industry leader, IBM Institute for Business Value, to define knowledge-based, expert and artificial intelligence systems and provide insight into how they can benefit insurance industry operations.INN: There has been some confusion in the marketplace about knowledge-based/expert and artificial intelligence systems. Can you clarify?

BUSINESS SOFTWARE DEVELOPMENT SERVICES FOR ATLANTICNew York-based Atlantic Mutual Insurance Co. chose MFX to provide business software development, maintenance and enhancement services from MFX's data center facility in Roanoke, Va. MFX hired the application support staff previously supporting Atlantic Mutual's proprietary business software applications. The new team will support Atlantic Mutual, as well as gain knowledge and exposure to MFX's proprietary products including WriteNow, ClaimsAssure and RiskVault. Atlantic Mutual's proprietary business software applications will continue to be owned by Atlantic Mutual.

Carriers operate in a complex environment that challenges their ability to do business efficiently and cost effectively. As regulations become more complex, customer needs, behaviors and demographics, distribution channels, product design and service delivery models are changing. Although technology is key to product and service delivery, most insurers struggle with outdated applications and infrastructures, while facing the looming brain drain as baby boomers retire.Once IT outsourcing was considered merely a method of reducing cost through labor arbitrage. Now the situation is more complicated, with other factors, including regulatory compliance, weighing heavily in many outsourcing decisions. Business continuity-that is, how to stay in business should a major event such as a natural or man-made catastrophe or a pandemic occur-is an emerging reason for outsourcing or distributing some business functions or support facilities across geographies. Each insurer organization is different and the reasons for determining what and when to outsource vary within industry sectors and by business model.

Mayfield Village, Ohio - The Drive Group of Progressive Insurance Cos.'s Web site (www.driveinsurance.com) received a "Standard of Excellence" WebAward in the insurance category from the Web Marketing Association (WMA).The WMA judged more than 2,300 Web sites from 35 countries that were entered into the 2006 competition. Each site was assigned three or more judges from a panel of independent Internet experts and evaluated on seven criteria including: design, innovation, content, technology, interactivity, copywriting and ease of use.

Washington - Congressman Ed Royce (R-CA), a senior member of the House Financial Services Committee, introduced legislation that would create an optional federal charter regulatory regime for life and property/casualty insurance providers. The National Insurance Act of 2006, is companion legislation to S.2509, which was authored by Senators John Sununu (R-NH) and Tim Johnson (D-SD)."The National Insurance Act would create a federal regulatory agency within the Treasury Department; however, it would leave the current state regulatory system in place. An insurance provider could choose to be regulated by the 50 states or by the Office of National Insurance," says Royce. "This concept is not new--the banking system has lived under such a framework for much of our nation's history."

Denver - Englewood, Colo.-based InsureMe online service earned four standard of excellence awards from the Web Marketing Association (WMA).The WMA was developed to help set high standards in Web marketing and development. The association's annual Web Marketing Award names the best sites in 96 industry categories in 33 countries around the world. Submitted sites are judged on seven criteria: design, innovation, content, technology, interactivity, copywriting and ease of use.

San Francisco - A majority of consumers who experience problems visiting or making transactions on insurance Web sites will abandon transactions entirely or even turn to competitors, according to results of a consumer survey. The survey, commissioned by San Francisco-based TeaLeaf Technology Inc. and conducted by Rochester, N.Y.-based Harris Interactive Inc., focused on U.S. consumer transaction experiences on shopping, banking, travel and insurance Web sites. About nine in 10 (88%) online consumers experienced problems when transacting online, potentially impacting an estimated 4.5% of all online consumer transactions, according to survey results.Hundreds of respondents submitted vignettes of bad online experiences, most concerning failed, inaccurate or incomplete transactions, endless "loops" in a business process or inability to simply checkout at retail sites. One respondent who used an insurance Web site said, "[I] paid an insurance payment online through their Web site and it didn't go through. I ended up paying a late fee because of it."

Hartford, Conn. - The Hartford Financial Services Group Inc. enhanced The Hartford At Work Web site to enable employees covered by The Hartford's group benefits plans to more quickly and easily access their benefits information.A new, personalized log-in feature is one recent enhancement to the Web site (www.thehartfordatwork.com). The Web site has been updated with new tools for employees to set up direct deposit for payment of long-term disability claims, to use and print forms and to access personalized benefits account information.