Claims

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 Although technology is key to product and service delivery, most insurers struggle with outdated applications and infrastructures, while facing the looming brain drain as baby boomers retire.Once IT outsourcing was considered merely a method of reducing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.

Boston - Liberty Mutual Group enhanced its online workers compensation claims management to provide faster service and better outcomes. The Boston-based insurer provides those responsible for managing a claim instant online access to all of the related documents, while protecting the privacy of confidential medical information."We made a great claims management system even better by slashing the time required for documents from outside resources--such as medical reports, bills and even digital photos--to be available in the system," explains Kevin Carson, who manages the new process. "What took days can now happen in seconds. Outside partners can now send electronic versions of these reports, which instantly become part of our system. Other providers still send paper documents, which we now scan into the system within a day of arriving at Liberty Mutual."

Boston – A new probabilistic model designed to help insurers better understand the location of their exposures relative to high risk areas and to estimate potential losses from wildfires is now available from AIR Worldwide Corp., a Boston risk modeling company. The U.S. Wildfire Model is designed to help insurers, reinsurers, and intermediaries manage wildfire risk both for individual policies and entire portfolios of properties in California. Nationally, wildfires have cost the insurance industry more than $5 billion since 1980 with a majority of the losses occurring in California. The 2003 Cedar and Old wildfires in Southern California, for example, cost insurers more than $2 billion. Together, the fires burned more than 750,000 acres, destroyed 3,700 homes and resulted in the deaths of 24 people. In 2006, more than 8.7 million acres have burned in Western states to date, equaling the acreage burned in all of 2005, one of the worst years on record. “The growth in insured losses from wildfires is a result of the same broad demographic trend we’ve observed with respect to other perils—namely, increasing property development in high risk areas,” said Dr. Jayanta Guin, vice president of research and modeling at AIR. “In the case of wildfires, we are witnessing property growth in the buffer zone between wildlands and the urban environment. According to U.S. Fire Administration statistics, nearly 40 percent of new home development in the Western United States is occurring in this wildland-urban interface, putting more insured property at risk every year.” Insured losses from wildfires are influenced by factors such as local fuels, topography, weather, and the vulnerability of affected structures. AIR’s model employs high-resolution fuel (vegetation), topographic, and weather data. The model incorporates 13 burnable fuel types at 30-meter resolution accounting for variations in moisture content, fuel loading, and horizontal continuity. Since fire spread is influenced by topography, AIR has incorporated high-resolution USGS digital elevation data. The model also considers the effect of wind speed and direction, including the Santa Ana winds in Southern California and the Diablo winds in the northern part of the state. The AIR model also estimates the mitigating impact of firebreaks created in the course of fire suppression activities, as well as the exacerbating impact of impaired road access. The flammability of roof and siding materials is the primary determinant of a structures’ vulnerability to fire. The AIR model accounts for a wide range of residential and commercial constructions and takes into account mitigating factors, such as fire resistant roofing and siding materials, to build an estimate of damage and loss. AIR’s probabilistic wildfire model is based on a robust stochastic catalog of potential future events that provides insurers with full probability distributions of loss and the ability to generate loss costs. The model is available now for AIR’s CLASIC/2, CATStation, and CATRADER catastrophe risk management systems to analyze exposures in California. Future releases of the model will expand its coverage to other Western states. Source: AIR Worldwide Corp.

Hartford, Conn. - Many commercial lines insurers imagine a world of potential success by applying to their businesses the predictive modeling techniques now widely used in personal lines, according to a new survey-based study by Conning Research and Consulting, Hartford, Conn. "It is clear from our survey results that commercial insurers are inspired by the advances in predictive modeling that are revolutionizing the personal lines marketplace," said Stephan Christiansen, Conning's director of research. "Since the commercial lines industry is still in the early stage of exploration of predictive modeling, it is not yet clear whether the early and aggressive pursuit of the right combination of data and tools will lead to a permanent competitive edge." The Conning Research study, "Commercial Lines Predictive Modeling: Searching for the Lift" identifies the environmental contrasts between commercial and personal lines, current activity in commercial lines predictive modeling implementation, potential barriers, and likely outcomes in this search for predictive modeling competitive advantage. "Certainly, predictive modeling has become a key tool in personal lines, but that is not necessarily predictive of a success in all commercial lines," Christiansen said. "Our research shows that insurers and modeling vendors perceive strong opportunities in some segments, weaker opportunities in others. And while there are barriers to successful implementation, our analysis has identified potential solutions for these hurdles." Source: Insurance Newslink

New York and Walldorf, Germany - Health insurance companies may be able to collaborate next year with providers, public health authorities and pharmaceutical companies on a new health network being proposed by Germany-based business software provider SAP and Bermuda-based consulting firm Accenture.The Collaborative Health Network (CHN) network initiative will be based on SAP NetWeaver technology, which links a range of information and data. Designed to streamline the way health insurance companies and other stakeholders access, integrate and share information, the network will help organizations maintain reliable, accurate electronic health records that are accessible quickly by multiple parties, the companies said in a release. It will use an enterprise service-oriented architecture (enterprise SOA) to help reduce IT costs and enable automated collaborative processes among industry participants. The first release of the solution will be available mid-2007, predicts the companies.

Northbrook, Ill. - Allstate's board of directors today announced a changing of the guard that includes a leadership transition strategy that will occur over the next eighteen months. Current chairman and CEO Edward Liddy will step down as CEO at the end of 2006 and will be succeeded by Thomas Wilson, who currently serves as president and COO. Wilson was elected to the Allstate board of directors, and will retain the role and title of president, leaving the position of COO vacant. Liddy, who will be age 62 at his retirement in 2008, will stay on as chairman until at that time. Wilson, 48, joined Northbrook, Il.,-based Allstate in 1995 as vice president of finance and was elected CFO later that year. He was appointed president of Allstate Financial in 1999 and president of Allstate Protection, the company's largest business unit, in 2002. He assumed his current role of president and COO in May 2005. Allstate, which celebrates its 75th anniversary this year, saw its shares go up about 60% since Liddy took over, compared with a gain of about 40% in the Standard & Poor's insurance index. Allstate shares rose 60 cents to $60.72 in Monday afternoon trading on the New York Stock Exchange. In a statement, Liddy referenced Allstate's "deep management bench," and stated that Allstate is in a very strong position, "making this an ideal time for a leadership transition." Sources: PR Newswire, Reuters

Philadelphia - CIGNA Group Insurance (CGI) enhanced its disability claims reporting platform to provide customers more robust self-service capabilities via the Internet. Through one site designed to be secure and easy to navigate, employers now have access to a variety of critical operational claims information, such as advice-to-pay reports, individual claims status and new claim notifications, as well as analytical information, such as year-over-year trending data and health care reports (for customers who also have medical coverage with CIGNA HealthCare).The reporting capabilities are available to all new and existing self-insured and fully-insured disability customers who purchase any of Philadelphia-based CGI's short- or long-term disability products. The new platform, which includes a custom ad-hoc report builder is designed to help employers:

New York - New York Life Insurance Co. named Mark Sanders CTO and senior vice president of its Corporate Information department, reporting to COO and senior vice president Eileen Slevin. He joins New York Life from New York-based BKF Asset Management Inc., where he served as CTO.Sanders is responsible for New York Life's information technology vision, strategy and planning, overseeing the Enterprise Architecture and Engineering division in the Corporate Information department. In addition to serving as the CTO for BKF Asset Management prior to joining New York Life, he served as chairman and CEO of BevAccess, a combination online procurement site for licensed retail buyers, and trade media group for the alcohol beverage industry. Sanders was also a senior director for Merrill Lynch, and held leadership positions at Salomon Brothers Inc., J.P. Morgan, Sun Microsystems and Grumman Aerospace.

Portland, Maine - Companies across the disability insurance industry face similar challenges managing their claims processes largely due to rapid advancements in technology, according to results of a study of group and individual disability carriers' claims technology. The study--sponsored by Portland, Maine-based ClaimVantage Inc. and conducted by JHA, a disability reinsurance, consulting and research firm also located in Portland, Maine--revealved that 46% of the respondents indicated lower productivity levels and dissatisfaction with their current claims management technology.Some of the major issues identified in the study involve claims payment solutions, customized or over-engineered systems and image-enabled systems. Seventy percent of the respondents have semi-automated payment capabilities, while the remaining are fully automated on legacy systems with up to 20 years of in-house development built-in.

Northbrook, Ill.-based The Allstate Corp., sponsored a disaster preparedness resource called the Catastrophe Readiness Clearinghouse and its Web site, (www.catastrophereadinessclearinghouse.com).The Clearinghouse, which is housed and managed by Centereach, N.Y.-based Middle Country Public Library, is a collection of disaster preparedness data and support available to anyone who visits the library. It includes a complete disaster preparedness information-portal Web site that is available to people everywhere.

Springfield, Mass. - Massachusetts Mutual Life Insurance Co. (MassMutual), based in Springfield, garnered the top spot in DALBAR Inc.'s latest WebMonitor rankings of the best Web sites in the life insurance and annuity industry.FieldNet, the Web site for financial professionals produced by MassMutual, received an "Excellent" designation for the 9th straight quarter and earned 1st place for six of those quarters.

Chicago - Aon Consulting, the human capital consulting organization of Chicago-based Aon Corp., report that Anne Kemp and Kathleen Skapik have joined the electronic discovery business unit. This unit is part of the IT Risk Consulting group, a division of the company's Financial Advisory and Litigation Consulting Services practice.