Claims

Jersey City, N.J. - ISO has identified a six-point strategy where technology now exists for the effective management of claims through improved visibility of the claims handling process, establishing best practices and a more accurate assessment of injuries and recovery implications.Statistics from the Insurance Research Council (IRC) have shown that claims cost inflation has risen at an average of around 7% every year since 1997, with the average bodily injury claim cost rising from $4,804 in 1997 to $6,711 in 2002.

Pittsburgh - Highmark Blue Cross Blue Shield will offer members additional information on hospital quality information and treatment options online through its member Web site. As consumer-driven products shift decision-making responsibility to consumers, insurers are providing more information to help members make health care decisions."Highmark continues to provide additional resources to help our members make informed decisions that give them a greater hand in their health," says Kim Bellard, Highmark's vice president of e-marketing and CRM. "Our goal is to give members clear, accurate information about their health care options --choice of providers, costs and treatment options."

Simsbury, Conn. - The Hartford Financial Services Group Inc. has named Mark Esposito as chief information officer for its individual life division.Esposito, who is also vice president and director of business technology, will lead the division's project management office and technology initiatives. He will be a member of the senior planning group, which helps Executive Vice President Michael Kalen, director of individual life, set direction for the division.

New York - The property/casualty insurance industry will report an increase in its capital base and an overall profitable performance in 2005, enabling it to meet the insurance needs of the growing U.S. economy, according to preliminary financial results compiled by the Insurance Services Office (ISO) and the Property Casualty Insurers Association of America (PCI). Insurers achieved these results despite catastrophe losses totaling a record $57.7 billion before reinsurance recoveries, according to ISO's Property Claims Services unit."A financially strong, stable and secure insurance industry benefits consumers and communities devastated by disaster," says Dr. Robert Hartwig, senior vice president and chief economist of the Insurance Information Institute (I.I.I.). "U.S. insurers entered 2005 well capitalized and well prepared for major catastrophic losses, having implemented effective risk management strategies which helped insurers better manage losses and control costs. Additionally, insurers' investments benefited from higher interest rates and--like other American industries--a resurgent economy in 2005. Last year's financial performance is also a testament to the efficiency of the global market for sharing and spreading risk, principally through the use of reinsurance, which is insurance purchased by insurance companies. That being said, the $43.2 billion earned by property/casualty insurers in 2005 translates into a 10.1% return on surplus or net worth, well below the 14.9% return on equity earned by the Fortune 500 group of companies."

Newark, N.J. - Horizon Blue Cross Blue of New Jersey and WebMD Health Corp. have teamed up to provide Horizon BCBSNJ's members a new service called My Health Manager. The new online service is a personalized, interactive health application that provides Horizon BCBSNJ members with tools and health information resources they need to better assess, track, and manage their health."Horizon Blue Cross Blue Shield of New Jersey members now have access to reliable health information in the privacy of their own home whenever they need it through My Health Manager," says William J. Marino, president and CEO of Horizon BCBSNJ. "Working with WebMD, we are making health care easier by putting at our members' fingertips a powerful new tool and tremendous health resources."

Washington - At a hearing before the House Ways and Means Subcommittee on Health, Joseph Smith, senior vice president and chief information officer of Arkansas Blue Cross and Blue Shield, urged Congress to adopt a realistic timetable for a major shift in medical coding, moving systems from ICD-9 to ICD-10. Smith testified at the hearing, which focused on health care information technology, on behalf of the Blue Cross and Blue Shield Association (BCBSA).The bill Smith referenced, HR 4157, the Health Information Technology Promotion Act of 2005, calls for the major conversion of diagnostic and procedural codes that providers and insurers must use by 2009. Systems would change from ICD-9 diagnosis codes, which include 13,000 codes, to ICD-10, which includes over 120,000 possible codes.

Hartford, Conn. - Beginning May 3, Aetna will cover online physician-patient communications for members in California and Florida through RelayHealth, a provider of secure online health care communication services.RelayHealth enables online communication between doctors and patients, including clinically based doctor-patient consultations, appointment requests, the ability to get referrals, lab and test results, and electronic prescriptions and medication refills.

Andover, Mass. - CGI's special investigative unit (SIU) operating within Clarendon National Insurance Co. has concluded a probe that resulted in the arrest of four California residents. Six felony charges have been lodged in connection with a fraudulent auto theft claim that was filed with Clarendon.On March 1, 2006, California Insurance Commissioner John Garamendi announced the arrests and added: "These types of false claims cost all of us more in the form of higher insurance premiums. My department will continue to fight this fraud to help ensure a fair, affordable insurance system for all Californians."

Washington, D.C. - United States Senators John Sununu (R-N.H.) and Tim Johnson (D-S.D.) have introduced the "National Insurance Act of 2006," legislation that would allow life and property/casualty insurers to choose federal rather than state charters under an "optional federal charter" regulatory system.Sununu and Johnson, both members of the Senate Committee on Banking, Housing, and Urban Affairs, introduced the legislation on Wednesday, April 5. The measure has been referred to the Banking Committee where hearings are expected later this spring.

Santa Clara, Calif. - Itemfield, a provider of complex data transformation software, has formed a relationship with Adobe Systems Inc. to work together to develop a solution designed specifically for the insurance industry.The combination of Adobe's intelligent forms that support the ACORD XML data standard with the process-specific business rules and complex data transformation capabilities from Itemfield can help insurers increase efficiency by accelerating the processing of transactional data in electronic forms, such as quotations and new business submissions, according to the two companies.

Seattle - Safeco has named William Jenks chief information officer, effective April 17, 2006.Jenks most recently served as executive vice president and chief information officer of worldwide operations at Publicis Groupe, one of the world's largest advertising and media companies. At Publicis, Jenks led the consolidation of separate technology platforms following a major corporate acquisition. He also realigned the company's technical resources to support top-line business objectives and improve the efficiency of its global workforce.

New York - Lexington Insurance Co., a member company of American International Group, Inc. (AIG), has launced a new online site, www.lexaehelp.com, to provide relevant information to professionals carrying architects and engineers (A&E) liability insurance. The new Web site was created to provide insureds with access to ongoing education modules, contractual information and legal information resources."Because of the specialized liability concerns of architects and engineers, we created www.lexaehelp.com to give our A&E insureds resources specific to their field--including online classes that satisfy state requirements--to assist in mitigating risks and liabilities," says Kevin Kelley, CEO, Lexington Insurance Co.

Gilsbar Inc. has had a detailed disaster recovery and business continuity plan in place since 1996. The New Orleans-based third-party administrator, which handles claims for about 150,000 members, employs a certified disaster recovery specialist. And, the company's executives and technical staff go through tabletop disaster recovery scenarios at least twice a year.Like many other insurance companies, Gilsbar is prepared for catastrophes. However, when Hurricane Katrina hit last year, insurance executives were caught by surprise and had to act on their feet and respond to a bevy of unexpected circumstances.

I'm sure you've heard the one about the life insurance salesman who asked his client, "Do you know the present value of your husband's life insurance policy?""What do you mean?" countered the woman.

In a sign of the major benefits to be won by insurance firms that accentuate Web-based and electronic solutions, the Blue Bell, Pa.-based insurer PMA Insurance Group received superlative ratings in customer service in a recent survey conducted by an independent researcher.In the survey, J.P. Murphy and Co., a Malvern, Pa.-based marketing and opinion research firm, asked approximately 500 of PMA's active clients about the quality of customer service that the insurer offered in areas including claims processing, risk assessment, risk management and cost control.

Despite reeling from the worst year in history for claims losses, pundits say the insurance industry plans to increase its spending on claims technology in 2006. For some, the idea of stepping up to new technology sounds like the perfect way to address inefficiencies that continue to plague claims processing. To others, it's yet another Band-Aid that may or may not be effective in solving what has become a hushed, off-the-record issue: claims leakage."Claims leakage is the difference between what you spent on a claim and what you should have spent," says one East Coast health insurance claims executive, who, like many sources interviewed for this story, asked to remain anonymous.

According to the coalition Against Insurance Fraud, insurance fraud is an $80-billion crime wave. Unfortunately, most insurance carriers have neither the processes nor technology they need to stop fraud.Even so, as fraud schemes become more sophisticated, insurance carriers must examine an even wider array of data to identify fraud trends and detect fraudulent claims. To do this, they must institute a set of technology best practices and techniques to automatically detect fraud and abuse early in the claims process.

Washington - The American Academy of Actuaries disclosed that a future large terrorist attack in New York City could result in $778 billion in insured losses.Speaking at the National Association of Insurance Commissioners (NAIC) public hearing on "Terrorism Insurance Matters," Michael McCarter, chairperson of the Academy Terrorism Risk Insurance Subgroup, provided potential property/casualty, and group life insurance losses as a result of various types of terrorist attacks. His group estimated potential insured losses from a conventional truck bomb terrorist attack, as well as medium and large chemical, nuclear, biological or radiological (CNBR) events caused by terrorism.

New York and Emeryville, Calif. - After the completion of a successful 18-month pilot, Empire Blue Cross Blue Shield and RelayHealth Corp. are expanding the RelayHealth webVisit service to all members of Empire's HMO plan.Beginning July 1, 2006 more than 400,000 HMO members will have access to RelayHealth's Web-enabled doctor visits. As part of the expansion agreement, Empire will also make RelayHealth available to all of its national Administrative Services Only (ASO) accounts as a new benefit.

Chicago - The U.S. property/casualty insurance industry will report deterioration in profitability in 2005 because insured catastrophe losses reached record levels in 2005, according to Fitch Ratings.The decrease in profitability is largely due to the destruction from Hurricane Katrina, the most devastating insured loss event in history, and Hurricanes Rita and Wilma, each of which will rank among the top 10 historical insured loss events.