Policy adminstration

Boston - AIR Worldwide Corp., (AIR) released Version 9.0 of its U.S. Hurricane Model, which includes enhanced methodology for estimating business interruption (BI) losses, which accounts for both building and business characteristics when estimating total BI downtime and includes indirect losses from sources other than physical damage to the insured building. The release also includes enhancements to the model’s demand surge function, the vulnerability of residential contents and pool enclosures, and incorporates research by AIR meteorologists and climate scientists into the link between elevated sea-surface temperatures (SSTs) and U.S. landfall activity. “In the aftermath of the 2004 and 2005 hurricane seasons, AIR undertook an intensive research and development effort to improve the way catastrophe models estimate business interruption losses,” according to Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide. The software also estimates indirect business interruption losses—those stemming from sources other than physical damage to the insured building—such as utility service interruption, actions taken by civil authorities, dependent building damage, and extended period coverage. The new model has been validated using detailed claims data from 2004 and 2005 hurricane seasons. Boston-based AIR is also providing an update to Version 9.0 of the U.S. Hurricane Model’s near-term catalog, which incorporates an additional 12 months—and several man-years—of research by AIR meteorologists and climate scientists into the link between elevated SSTs and U.S. landfall activity. Rather than relying on highly uncertain point forecasts of sea-surface temperatures, the Version 9.0 near-term catalog is instead conditioned on the assumption that currently elevated SSTs are likely to remain elevated for the next five years. As a result, the inclusion of one additional hurricane season will not significantly change estimates of near term risk. However, uncertainty in near-term estimates of landfall frequency remain significant, so AIR is once again releasing the near-term catalog as a supplement to, rather than a replacement for the standard catalog, which is based on more than 100 years of historical data. Analysis of claims data from recent hurricane seasons has revealed that contents vulnerability for single-family homes has decreased significantly in recent years. The updated model accounts for this trend. The model has also been enhanced to explicitly account for the impact of hurricane winds on pool enclosures, structures that—according to AIR’s latest research—show a higher vulnerability to wind damage than previously estimated. Finally, the impact of demand surge—the increase in material, services, and labor costs due to increased demand following a catastrophic event—was fine-tuned and validated using high resolution construction cost time series data for the 2004 and 2005 hurricanes taken from XactAnalysis, a reporting tool created by ISO subsidiary Xactware. Research at AIR shows higher levels of demand surge for time element, including BI. A state-of-the-art model alone is not sufficient for generating accurate BI loss estimates, notes the company. AIR’s analyses also revealed significant issues with the accuracy and completeness of insurers’ business interruption exposure data. For many companies, large numbers of locations have very low BI exposure values. In most cases, business interruption limits, which reflect part-year business income exposure, have been set equal to annual BI exposure. AIR also found evidence that companies are using general “rules of thumb” to determine the BI limit, rather than the use of BI worksheets for each location in multi-location policies. Finally, the number of locations that may sustai damage in a catastrophe is often underestimated. Together, these issues regarding the quality of BI exposure data lead to significant underestimation of modeled BI losses by many companies. “Modeled loss estimates are only as accurate as the exposure data input into the catastrophe model,” continued Dr. Guin. “Insurers must continue to put an emphasis on improving the quality and completeness of their BI exposure data to improve the accuracy of the catastrophe risk information used by company management.” Source: AIR Worldwide Corp.

New York - The Guardian Life Insurance Company of America introduced a debit card and Web tools as part of its FlexPlan Flexible Spending Account program, which enables clients to access and manage FSA accounts easily.Guardian's FlexPlan offers employees point of service access to money they set aside in their FSA, minimizing steps of substantiating claims with receipts and waiting for FSA reimbursements via mail. Clients can pay for co-payments, deductibles, prescriptions, eyeglasses and other eligible healthcare expenses with just one swipe of a Benny Pre-paid MasterCard card.

Chicago - Insurance Networking News magazine, a SourceMedia publication, released the results of its 2007 INNovators Award, a special designation intended to advance the spread of business technology acumen in the insurance industry.Nominees for the 2007 INNovators program included insurance carriers, agencies and brokerages. Their "innovation" was required to have been in production long enough to have returned demonstrable, tangible results.

The word "governance" has come to prominence in insurance IT circles in just the last few years, partly in reaction to the spate of federal regulation rained down by the Sarbanes-Oxley Act of 2002, the Gramm-Leach-Bliley Act of 1999 and the USA Patriot Act, which became law in 2001."The need for governance didn't become apparent until Sarbanes-Oxley and the others came along," says Karen Pauli, senior analyst in the insurance research practice at the Needham, Mass.-based TowerGroup. "SOX made it mandatory to know what's going on."

In the last five years or so, a handful of major life insurers in the United Kingdom have embraced what for them is a new wealth-management technology—so-called wrap platforms.Wraps, as the Web-based, business intelligence systems are called, enable independent financial advisors, or IFAs, and their customers to view and manage, in one application, a range of investment products that includes pensions, bonds and many types of savings vehicles, some with life-insurance-like features.

Basic data integration, the act of extracting, transforming and loading (ETL) structured data from disparate systems into a single data store so it can be manipulated and evaluated, carries with it certain logical elements and processes.In today's insurance IT department, however, the vast amount (approximately 80% according to experts) of new data being generated is unstructured, (Web, VoIP, IM and e-mail) and being lopped into data silos that are growing exponentially. Integrating structured and unstructured data brings with it yet another layer of complexity.

The IASA 2007 annual conference theme, "learning today, leading tomorrow," may sound a bit clichéd-until you consider insurance carriers that have incorporated a similar theme into their corporate cultures-cultures that espouse insurance industry-specific professional development.Take Indianapolis-based WellPoint, a health benefits company that serves about 28 million medical members and 80 million specialty members in the United States. With more than 38,000 employees, the organization owns Blue Cross and/or Blue Shield plans in 13 states. Apparently, WellPoint believes that a large predictor of customer satisfaction and associated growth is reflected in its ranks, as measured by employee satisfaction. Rumor has it that when WellPoint's Georgia division discovered that its employee satisfaction level dropped below its national company average a few years ago, the division created an Associate Career Development program, which included a job-specific competency model and all associated learning opportunities, both online and in person. In the year following the program's inception, turnover reportedly dropped more than 11%.

With consumers now paying more premiums online than by paper check, insurance carriers need to present electronic bills effectively enough to leave a lasting good impression.Take a look at the numbers. Online bill payments accounted for 39% of bill payments among online households last year, an increase of 4% over the previous year, according to The 2007 Consumer Bill Payment Survey, a study by Rochester, N.Y.-based Harris Interactive Inc. and The Marketing Workshop Inc. Norcross, Ga. In contrast, the volume of checks sent by mail fell 4%, accounting for 34% of the volume.

U.S. CONSUMERS WANT CONTROL OF E-HEALTH RECORDSAmericans show a strong interest in controlling their own electronic medical records, according to a national survey released at a health IT conference.

ARCOT SYSTEMS AND ADOBE WORK ON DIGITAL SIGNINGSunnyvale, Calif.-based Arcot Systems Inc. has collaborated with San Jose, Calif.-based Adobe Systems Inc. to create a new option for digital signing in Adobe Acrobat software and Adobe Reader software using "Roaming Digital IDs."

What's the secret of running an IT department at a major brokerage? To find out, Insurance Networking News asked Fred Danback. As principal and head of global technology services for Integro Insurance Brokers, Danback is charged with developing the technology infrastructure organization.INN: What's the most important goal of an IT department?

Why do companies go out of business even though they rate decent customer satisfaction scores on surveys? Maybe somebody's not asking the right survey questions.Instead of a barrage of queries, researchers need to pose the "ultimate question" in a regular, systematic and timely fashion to get a true measure of success and growth-the Net Promoter Score (NPS).

Insurers name e-signatures and online applications; document management, workflow and imaging; and Web self-service for distributors and/or customers (portals) as the technology strategies they are very likely or likely to implement, according to a survey from Dallas-based Robert E. Nolan Co.The "Life & Annuity Industry Survey Findings" report says, "While e-signatures and online applications are likely to represent the largest investment, the electronic delivery of customer materials in support of the online purchase ranks somewhat lower.

Accounting systems may seem about as exciting as dry toast, but they're becoming increasingly important hubs in insurance carriers' IT strategies.On the back end, they serve as collection points by integrating data from billing, HR, investment management and even policy administration systems. On the front end, either alone or in combination with other products, they feed information into data warehouses and management dashboards to provide detailed and flexible reports that give managers new ways of seeing their companies' workings.

PURE CHOOSES ONESHIELD FOR POLICY ADMIN SYSTEMPrivilege Underwriters Reciprocal Exchange (PURE), a startup with headquarters in Plantation, Fla., has selected software from Westborough, Mass.-based OneShield Inc. to support administration of new insurance products. PURE deployed OneShield's Dragon platform to manage the end-to-end policy administration of PURE High Net Worth Insurance personal lines product offerings.

Picture yourself in the early 1900s. You own a horse-drawn carriage but you're frustrated with the slow, bumpy ride. So you invest in the latest wheels and bearings for less rolling resistance. You buy modern suspension to cushion the potholes, and you say goodbye to old Nellie and get a friskier steed. Now you're going a little faster, with fewer bumps. You're feeling good until a "horseless carriage" whizzes by, leaving you in the dust. You realize your expensive improvements haven't helped you much.The insurance industry finds itself in a similar situation with claims. Insurance companies have re-engineered claims processes, replaced legacy systems, installed imaging systems, and implemented business process management tools and workflow systems. Despite the millions spent, those efforts have rarely delivered significant improvements in productivity or slashed claims costs.

Ithaca, N.Y. - Contrary to what many people think, the large majority of call centers serving United States' customers – service centers in remote locations that handle telephone and web-based inquiries – are operated in the U.S., not in India and other overseas locations. This is one of the findings revealed in "The Global Call Center Report: International Perspectives on Management and Employment."Some of the study's key findings:

Tokyo - Most Japanese insurance companies are now pursuing new customer and product strategies due to regulatory reforms that are opening the banking sector as a distribution channel for insurance products, according to an Accenture survey of senior executives at one-third of the insurance companies operating in Japan.

Zurich, Switzerland – Swiss Re entered into an agreement that gives it the right to sell the new business operations of Tomorrow, the recently re-branded GE Life to LV= (formerly known as Liverpool Victoria). Subject to the exercise of the appropriate option, and satisfaction of various regulatory and other conditions, the sale is expected to be completed in December 2007.

London - Regulatory overkill is the greatest risk facing the global insurance industry, according to London-based Centre for the Study of Financial Information's (CSFI) latest Banana Skins survey, in association with PricewaterhouseCoopers (PwC) LLP, New York.