Policy adminstration

Mayfield Village, Ohio — The Progressive Group of Insurance Cos. yesterday introduced Paperless Policies, a feature that will allow customers who buy a policy directly from the company, or through one of its independent insurance agencies, the ability to reduce the amount of policy-related paper documents they receive. Having policy documents delivered electronically saves trees, expedites delivery of the documents and reduces the opportunity for misplaced documents, says the insurer.

Seattle and Madison, Wis. — A handful of U.S. auto insurers have begun offering in-car cameras or global positioning equipment to help parents monitor their teenagers' driving behavior, hoping to reduce the number of crashes involving young motorists.

Jersey City, N.J. — Extending its reach in healthcare market as a provider of data, analytics and decision-support solutions, ISO Properties Inc. confirmed the acquisition of Salt Lake City-based HealthCare Insight LLC (HCI), which provides solutions that enable healthcare claims payors to prevent fraud, abuse and overpayment. Terms of the deal were not disclosed.

New York and Chicago - October 10, 2007-- Insurance Networking News (INN) and Celent LLC, announce a partnership to deliver INN's second annual ranking of technology solution providers to the insurance industry, including several enhancements to last year's program. This second annual ranking, called the Insurance Networking News VIP Awards, will be based on a survey of executives and staff from North American insurance companies, including property/casualty, life/health--and new this year--reinsurance. These insurers will identify their preferred technology providers in several categories, such as enterprise platforms, point solutions, platform technologies and services. Also new to the second annual program will be additional rankings by respondent type. The 2008 INN VIP Award winners will be determined solely by insurance carriers, brokers, managing general agents and agents. In partnership with Insurance Networking News, Celent, the most respected source of independent insurance technology and business research and advisory services, will conduct and manage the program's survey distribution, data collection and analysis. In Part II of the INN VIP Awards program, the top-ranked solution providers will be offered an opportunity to nominate an insurance carrier customer as a "visionary" for its use of a specific technology, and is encouraged to illustrate the role, if feasible, that ACORD data standards plays as part of their business and technology success story. INN's readers, its Editorial Advisory Board, and Celent's top insurance research analyst will determine this top-ranked technology best practice in action. "The INN VIP Awards program will provide an important perspective that will contribute to insurance company technology decisions," says Matthew Josefowicz, managing director of Celent's insurance practice. "We hope that the structure of this year's survey, with categories based on respondent type as well as technology categories, will make the results even more useful for INN's readers." For readers of Insurance Networking News who depend on the publication as the independent authority on information on how technology supports insurers' business strategies, the 2008 INN VIP Awards ranking and its accompanying analysis will provide insights into the leading technology solution providers across multiple categories. "This year's enhanced program reflects an honest and factual assessment of the technology solution provider landscape," says Pat Speer, editor-in-chief, Insurance Industry News. "Equally important, the enhanced INN VIP Awards program evokes the necessary discussion of the "why" behind the ranking. By including a critical educational component, such as how ACORD standards have helped facilitate the leading technology's application success, insurers can map to their own success." Winners of this second annual ranking will be recognized at an exclusive black-tie event held in conjunction with the ACORD LOMA Insurance Systems Forum in Las Vegas in May 2008, and will be featured in a Special Report by Insurance Networking News in the June 2008 issue. The special report will also be distributed at the ACORD LOMA Insurance Systems Forum in Las Vegas and at the IASA annual conference in Seattle. The INN VIP Awards ceremony will also be included as part of the INN NewsCast video broadcast. "We are delighted to work with Celent," says Speer. "Celent's research and advisory professionals represent exceptional industry acumen, which means our readers and the industry at large will have direct access to the knowledge and expertise generated as part of our collective research efforts." With six senior-level analysts in the United States, and three covering Europe and Asia, Celent's breadth and depth of insurance technology experience dates back to 2001. Celent is the only analyst firm to publish comprehensive reports on insurance software sales volumes and in-depth rankings of vendor software. Celent also publishes the widely read annual CIO survey and popular Model Carrier report, making the firm uniquely position to understand the buyer's side of the industry's highly competitive landscape. Contact Josefowicz directly via e-mail at mjosefowicz@celent.com if you have questions about the INN VIP Awards ranking, or wish to participate in the survey. To participate, please go to: www.insurancenetworking.com. Technology solution providers seeking more information about the Insurance Networking News' VIP Awards, or information about how to post the survey link on their Web sites, can contact Holli Gronset at holli.gronset@sourcemedia.com or 312-983-6178. About Insurance Industry News and SourceMedia, Inc.Insurance Networking News is a trusted source for information on how technology is being implemented to support insurers' strategic business objectives, providing insightful analysis of - and case studies on - how technology is being innovatively utilized to automate critical processes. Every issue of Insurance Networking News is written to help senior insurance executives bypass the hype and get to the heart of resolving industry challenges. Readers rely on carefully researched content that is both engaging and analytical.SourceMedia, an Investcorp company, is the pre-eminent provider of timely and essential market information - including industry news, analysis, research and insights - for members of the financial services community, as well as related fields such as accounting and technology. Through its comprehensive library of professional publications, suite of industry-standard data applications, and in-depth seminars and conferences, SourceMedia (www.sourcemedia.com) offers its clients and subscribers a valuable and sophisticated range of products and services. About Celent LLCCelent, LLC is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally experienced analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. More information about Celent's insurance practice is available online at www.celent.com/insurance.asp Source: Insurance Networking News and Celent LLC

Thousand Oaks, Calif. — For small-business owners who face pressure to provide their employees with affordable health insurance, one statewide provider has devised an online solution to address the situation. Blue Cross of California has released a new tool that makes it easier for small-business owners to navigate the health care arena and find the most affordable products for their employees with the launch of an online tool called Click4Biz.

Mayfield, Ohio - With an overarching goal to create a safer driving experience for its customers, The Progressive Group of Insurance Cos. is offering a virtual driving experience to existing and potential customers across America. The carrier is teaming with Metro City Group, a Laguna Niguel, Calif., owner of a 68-foot multimedia-equipped tractor-trailer, to provide drivers with the chance to test their skills in practical behind-the-wheel driving situations in a safe, virtual environment. With their eyes on the road and their hands securely placed at the “nine” and “three” positions on the steering wheel, people who experience the Progressive Driving Skills Simulator will increase their knowledge of the rules of the road and be better equipped to handle any driving situation. The driving course curriculum includes real-life situations--such as driving in high traffic, congested areas, through foggy or rainy weather or simply passing and yielding to other drivers--and the virtual technology system measures drivers' responses, reaction times, crash reduction techniques and general driving knowledge. "The interactive experience of the Progressive Driving Skills Simulator gives people the chance to 'test drive' their skills in all types of driving situations, which we hope will prepare them for driving on the real--not virtual--road," said Progressive product manager Mike Storbeck from the company's headquarters in Mayfield, Ohio. "Our objective has always been to redefine drivers education and provide a practical training program that gives people a chance to test, and practice, their skills in a safe, simulated environment," said Tim Albright, president of Metro City Group, owner of The Simulator. "We are looking forward to working with Progressive, and are sure that, together, we can make our roads safer and more enjoyable for everyone." Over the next several months, the Progressive Driving Skills Simulator will travel to many local events in the Western United States, including Motor Trend Auto Shows, state fairs and other automotive industry-related events. More information is available at www.progressive.com or www.streetsimulator.com. Source: Progressive Group of Insurance Cos.

Washington – Thanks in part to technology that automates the credit-verification process within 48 hours, an unlikely contender is entering the mortgage lending business. A division of Citigroup Inc. is piloting a program to offer mortgages to Washington-area residents with "limited credit histories" who "therefore often end up with high-cost or risky home loans." Setting aside $200 million for the program, the division, CitiMortgage, has partnered with Fannie Mae, Washington, D.C. and State Farm Mutual Automobile Insurance Co., Bloomington, Ill., which together agreed to buy $100 million worth of the loans. To qualify for the program, a person must be in the country legally and have alternate credit lines, such as rental payments, utility bills or a tithing record, that a lender can use to evaluate creditworthiness. Historically, gathering the paperwork to confirm these trade lines has been a laborious process that could take months, which often discouraged potential buyers and hurt their chances of closing a deal, reports The Washington Post.

WASHINGTON — The practice of insurers basing auto insurance premiums on a customer's credit rating was questioned at a House hearing yesterday, with critics asking whether it disproportionately hurts young people and minorities.

Washington — Gov. Marc Racicot, president of the American Insurance Association (AIA), made the case that the Federal Trade Commission's (FTC) credit study is the latest proof that credit-based insurance scores are fair, objective and beneficial to a vast majority of consumers. The American Insurance Association, Washington, represents approximately 350 major insurance companies that provide all lines of property/casualty insurance and write more than $123 billion annually in premiums. "There is no question that credit-based insurance scores are an efficient and accurate predictor of risk," stated Gov. Racicot. "Their use helps insurers refine their pricing to better reflect an individual's risk profile, resulting in most consumers paying less for insurance." In a statement to a U.S. House Subcommittee, Racicot responded to the FTC study, "Credit-Based Insurance Scores: Impact on Consumers of Automobile Insurance," (July 2007), which is the subject of a hearing today in the U.S. House Committee on Financial Services, Subcommittee on Oversight and Investigations. "It's a simple equation—the better your credit score, the lower your risk in the eyes of insurers— resulting in you paying less for your insurance," concluded Racicot. "The use of credit-based insurance scores has been in existence for more than a decade and has helped expand the availability of insurance in many markets, and increased competition among insurers." 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. The FTC's study firmly validates the insurance risk assessment capabilities and consumer benefits of credit-based insurance scores. Most people pay less for insurance because of insurer use of credit, which the FTC's study, and numerous state studies have confirmed. According to the FTC, scores are 'predictive of the number of claims consumers file and the total cost of those claims,' and 'scores also may make the process of granting and pricing insurance quicker and cheaper, cost savings that may be passed on to consumers in the form of lower premiums.' Additionally, the FTC study directly refutes unfounded claims that insurers use credit-based insurance scores to 'unfairly target' minorities saying such scores 'have little effect as a "proxy" for membership in racial and ethnic groups in decisions related to insurance.' The FTC study shows there is no way to determine a person's race, ethnicity or economic status by simply looking at an insurance score. In August, the Federal Reserve also issued a report to Congress that evaluated the use of credit scoring and its effects on the availability and affordability of credit. The Federal Reserve's findings tracked closely with those in the FTC's study. Both clearly established that credit is a reliable risk predictor, and that credit scoring has little to no effect as a proxy for race or ethnicity, reports the government body. In urer use of credit is governed not only by the Fair Credit Reporting Act, which expressly allows for its use, but by dozens of state laws and regulations, including what is considered standard practice in the market, the National Conference of Insurance Legislators (NCOIL) Model Act on Credit. Introduced in 2002, the NCOIL model is law or regulation in 26 states, and it balances insurers' need to use an actuarially sound variable while enumerating certain consumer rights and protections, including not having credit be the sole determining factor for coverage or non-renewal, or allowing an exemption to insurer use of credit due to "special life circumstances" for things such as the death of a spouse or an unexpected medical emergency. The law also requires insurers to re-rate customers with corrected credit reports, notify applicants that credit information is being used in setting rates and let customers know if their credit information results in an adverse action—a higher premium, for example, or denial of coverage. It also is designed to protect consumers' privacy. Sources: PR Newswire, INN archives

To find the wellspring of the insurance industry's reputation for being technologically backward, one need only follow the glow of green screens to the heart of carriers' data centers where "Big Iron" still holds sway.To get a countervailing view, one could visit Erie, Pa., where Erie Family Life Insurance Co., a member of Erie Insurance Group, is undergoing a platform consolidation of its policy administration systems.

Most insurance technology executives will tell you that navigating their way to the executive suite is, at the least, a rewarding experience. This adage is true for men and women, but in the male-dominated insurance industry, women tend to relish the ride.

Have you ever had to find a stud to hang a picture? You knew the stud was there ... somewhere ... beneath the surface, but you just couldn't find it without exhaustive searching. Finding studs is like locating knowledge management and knowledge personnel in today's insurance industry: You know they're there, but at first glance they're always hard to find.Around the time of the dot-com boom, knowledge management was one of the buzz-worthy trends infiltrating business and insurance circles. Formally established as a discipline in 1995, knowledge management, and the inception of the chief knowledge officer, had gained steam throughout the late 1990s, but fell off the radar almost completely once the bubble burst.

When INN's editors began research on the topic for this month's cover story, women in insurance industry IT leadership positions, they were charged with finding out how women are faring within the broader context of IT and management. That discovery process turned up some pretty negative press.The Journal, an online forum for educators on the value of teaching technology, quotes the National Center for Women & Information Technology's (NCWIT) research, which indicates an 80% decline in the number of female first-year college students who chose computer science as their field of study between 1996-2004. According to NCWIT, today, women make up only 26% of IT workers in the country.

Pre-retirees and retirees may produce immediate retirement planning profit for insurers, but Generations X and Y also need to start planning for retirement. So how do insurers focus on all generations? "Take a step back and develop a more client-centric approach," says David Schehr, a research director at Stamford, Conn.-based Gartner Inc. "An insurer's technology choice is a reflection of its business choice. There is a perception out there-and there is some reality behind the perception-that insurance organizations tend to approach retirement much as a product sale. In reality, the insurer should first determine its risk tolerance. If an annuity is appropriate, set goals in a retirement planning process. Ask all of the client-centric questions and, from there, if it's appropriate, develop an annuity illustration."SEPARATING THE GENERATIONS

STUDY: INSURERS NEED TO CHANGEU.S. consumers want insurance companies to more effectively communicate new products and services available to them, provide customized policies to better meet their needs and bring their customer experience up to par with other industries, according to a study by Armonk, N.Y.-based International Business Machines Corp. (IBM) of more than 3,000 P&C insurance policyholders.

Remember when Johnny Carson would become Karnack the Magnificent and answer the question before he opened the envelope holding the question? Well, here is the answer: You will save time and money and improve customer service as well as compliance. The question: What will Check 21 do for me?Congress enacted Check 21, or more formally known as Check Clearing for the 21st Century, in 2004 at the behest of the Federal Reserve. Recall that when 9/11 occurred, all aircraft were grounded and could not fly. The small planes that would fly checks from various cities to Federal Reserve locations as a part of the check clearing and settlement process were not exempt. As a result, the Federal Reserve decided to implement new processing rules and utilize technology, coining this process as Remote Deposit Capture (RDC), to digitize checks and remove the physical check from the clearing process.

The U.S. Bureau of Labor Statistics estimates that between 2004 and 2014, 1.49 million new computer- and IT-related jobs will be created.The retiring boomer generation may play a role in these figures, according to the Robert Half Technology 2007 Salary Guide. The guide, from Menlo Park, Calif.-based Robert Half Technology, reports that as many as 64 million baby boomers, representing more than 40% of the U.S. labor force, are poised to retire by the end of the decade.

The need for insurers to evolve in today's competitive marketplace is at an all-time high. Whether expanding to reach an untapped niche, or improving systems and practices just to keep the pace, carriers are constantly in need of setting goals and brainstorming effective ways of reaching them.One such company, New York-based XL Insurance, recognized a gaping hole in the U.S. casualty marketplace throughout the late 1990s and early 2000s and, in January 2004, made a strategic decision to swiftly expand into the casualty risk management business by offering a portfolio of risk-sensitive products. The impediment: limited internal resources and a rigid time frame in which to implement new solutions. And, for XL's rapid, creative and successful response to the problem, the company was named third-place winner of Insurance Networking News' 2007 INNovator award.

New technologies and competitive pressures are gradually prying open the doors to carriers' rating systems, long locked away in the silos of proprietary or homegrown systems. These rule-driven systems, designed to evaluate potential policyholder risk and price policies accordingly, are increasingly being called upon to integrate with multiple channels, back-end systems and front-end portals to provide real-time or close to real-time pricing for customers.These changes are being driven by a number of factors, relates Craig Weber, an analyst with Boston-based Celent LLC. Rising customer and agent expectations, for one, are pressuring carriers to provider faster, more accurate and more flexible quoting. In addition, there is continuing pressure to keep a lid on IT spending, causing carriers to look for more efficient solutions.

Mounting competition and market shifts are forcing property/casualty insurers to take a new look at core business processes.With an eye toward profitable growth and increased market share, carriers are now focusing on underwriting-an area long under-served by technology. Today, most underwriting is done through slow, error-prone manual processes or by outdated legacy applications. This inefficiency is driving down profits and eroding sales.