Policy adminstration

When it comes to information technology investments in the insurance industry, there is a clear delineation of priorities predicated on the sector of business in which a carrier operates.Underwriting, pricing and products are the most important IT priorities for property/casualty insurers, while distribution reigns supreme for life insurers, states Tillinghast-Towers Perrin's e-Track report on insurance technology investments, which polled 248 large and mid-size carriers across North America.

Louisiana State University Health Sciences Center thought it had an efficient claims submission system. Half the claims from the nine-hospital integrated delivery system in Baton Rouge go to Medicare or Medicaid. Staff used to load the claims on magnetic tape each week and ship them to the government payers.

In March 2000, seven major health care payers started earnest negotiations to create a joint company to enable providers to communicate with the payers via the Internet.By July 2000, MedUnite was formed with a goal of offering services within a year. MedUnite launched its services last September, only six weeks behind its original schedule. However, it's a different company from what was originally envisioned.

Electronic bill payment and presentment (EBPP) has experienced a mixed bag of interest among consumers, with payments of insurance premiums ranking low on their online bill-payment priority list.In fact, insurance carriers, along with utilities, telecommunications and mortgage companies, are among the businesses that are lagging behind in the expansion of EBPP, according to a recent report by Stamford, Conn.-based consulting firm Gartner Inc.

Insurance companies spent more than $20 billion this year on new technology. But which technologies are the most innovative and will have the greatest impact on carriers' success?The Internet won't replace agents or call centers, nor will it become the preferred method for purchasing insurance. But it certainly is becoming an integral part in carriers' efforts to market, support and sell insurance policies to customers, and to attract new policyholders.

Most Americans will never forget where they were when they first heard news of the September 11th terrorist attack. For 62 Allstate claim handlers, they will remember they were attending training workshops at the carrier's

When the World Trade Center came under attack, David Annis was thousands of miles away from The Hartford Financial Services Group Inc.'s offices at Seven World Trade Center. In fact, Annis, the company's group senior vice president and CIO, was not able to return to the United States for more than a week to oversee recovery efforts.However, thanks to the combination of disaster planning, vendor support and quick work on the part of the carrier's crisis management committee, all 330 employees who worked for the five Hartford business units were working at alternative sites the following Monday.

Disaster preparedness is subject most often discussed in the aftermath of a major natural or manmade disaster.Although most major corporations have comprehensive disaster recovery plans in place, the unprecedented events of Sept. 11 clearly demonstrate importance of updating and testing those plans frequently.

In late August, Chicago-based global insurance brokerage and consulting firm Aon Corp. redesigned its corporate Web site so customers, employees and other affiliates could more easily and quickly find content and navigate the site.As part of the project, Aon's portal team also implemented a set of Web development techniques that would enable internal Web designers to reduce the turnaround time to post new and pertinent data and graphics onto the site, located at www.aon.com.

When disaster strikes, insurance companies immediately mobilize their catastrophic ("cat") teams to deal with the accompanying sudden increase in claims.The aim is to provide expedient customer service to policyholders who have been injured or who have lost property or loved ones-and rightfully deserve compensation from their insurance company.

Unlike other types of insurance claims, individuals who file a homeowners claim know that cash reimbursement is imminent. Even the promise of a claim payment within 48 hours isn't swift enough to satisfy an individual who has been forced from their home.

As the financial cost of the Sept. 11 terrorist attacks on New York and Washington, D.C., continues to rise, the ramifications for insurers remains unclear. Indeed, while carriers certainly have the financial reserves to cover estimated losses, industry observers say the wounds suffered from the devastating attacks will take many months to heal."While the hit to the economy will obviously put expense pressure on many companies, I think the disaster itself will have the effect of changing company priorities," says John Hodge, chief information officer for NAC Reinsurance Corp., Stamford Conn. The company is a subsidiary of XL Capital Ltd., which estimates its losses from the attacks at $700 million (see chart).

In its attempt to create an enterprisewide view of its customers, the numbers were stacked heavily against New York City-based MetLife Inc.: a customer base amassing 100 million customer records stored in more than 30 disparate back-office systems.Furthermore, MetLife has three vastly diverse organizations-a retail bank, a mutual fund company and a newly-acquired property/casualty insurer. Data is spread across five different lines of business-property/casualty insurance, banking, institutional, brokerage and mutual funds.

Web-to-host is a relatively simple approach that insurers often overlook as they scramble to build a Web presence for internal, business-to-business, and public-facing applications.However, many companies now realize that by adding browser access to existing back-end applications, they can quickly and adequately Web-enable mainframe and midrange applications.

While recently examining data stored within one of its auto policy databases, executives with New York City-based Metropolitan Insurance Co. uncovered a troubling glitch. It was an irregularity that any seasoned IT troubleshooter would certainly have appreciated.

r some insurance carriers, the Year 2000 compliance aftershocks are still lingering. But one such carrier, Charlotte, N.C.-based Royal & SunAlliance USA, hopes a court ruling in July spells the last Y2K trembler it will have to absorb.A Delaware Superior Court dismissed a lawsuit filed in August 1999 by Unisys Corp. The Blue Bell, Pa.-based computer giant, which has a commercial general liability (CGL) policy through two Royal & SunAlliance co-insurers, sought to recover more than $35 million in Y2K expenses to bring its computer networks into compliance.

Mark Popolano compares the difference between being CIO and being chief technology officer at American International Group this way: As CTO, he was the navigator of technology; now he is the technology pilot."As CTO, you have to be very savvy to understand the nuances of technology," he explains. "The CIO has a greater responsibility across the organization to help steer the direction of technical processes."

When Atlantic Mutual Cos. moved its back-office operations from New York to Roanoke, Va., in 1977, David Mitchell was working on school redistricting as a programmer for the Roanoke City schools.Tipped off by IBM Corp.'s local representative about Atlantic Mutual's plans, Mitchell jumped at the opportunity and was hired by the New York-based insurer as a senior programmer.

It's solid. It's established. It's "the rock." And despite a 125-year history and $371 billion in assets that could have slowed it down, Prudential Insurance Co. of America has defied inertia and rapidly transformed itself into a 21st century operation determined to hold its own in the high-speed New Economy. Two recent strategic IT initiatives have contributed significantly to Prudential's transformation. They stand out not only for their scope, but also for the speed with which they've been implemented.Namely, the rollout of the $130 million LaunchPad laptop program, which was initiated three years ago to equip Prudential's entire field force of 12,000 with IBM ThinkPad notebook computers, has been recognized as a phenomenal achievement. "That's just mind-boggling-to roll out thousands of PCs on a very concerted basis," says John McFadden, chief technology officer of Loyola College in Timonium, Md.

When a global financial services behemoth such as Zurich Financial Services Group decides to merge three commercial property/casualty businesses into one regional unit, it would be reasonable to assume that consolidating their IT resources into one common platform would take longer than nine months.After all, large corporations aren't usually nimble and quick, insurance companies are known for their cumbersome legacy systems, and mergers of any kind are difficult to implement.