Policy adminstration

W.L. Gore & Associates is about as far removed from the financial services industry as any company can get. Newark, N.J.-based Gore, best known as the creator of the durable GORE-TEX fabric so popular in outdoor wear, is a manufacturer of consumer products, textiles, electronics, medical and healthcare products, sealants, and filtration. What can a company in the financial services sector learn from Gore?Plenty, and that's why Wachovia Corp., Charlotte, N.C., hired the head of Gore's research and development team to bring analytical thinking to its own operations.

Not many adjusters would argue against technology as a means of easing their workload-certainly not the adjusters at Farmers Mutual of Nebraska. After all, the company's claims estimating system was efficiently processing information at the desktop. But that apparent blessing was actually part of the problem: the system processed data at the desktop and not in the field, where much of the real work takes place."Our adjusters would go out in the field and inspect the loss, noting the damage just on a piece of paper," says Jamie Fredrickson, director of Field Services. "Then they would go back to their district offices, sit down at their computers and manually re-enter all of this information to generate their estimates."

How can SOA help carriers? That's what Insurance Networking News asked Andy Labrot, chief technology officer for the Innovation Group, Hartford, Conn. Labrot has 20 years of IT experience and leads his company's R&D efforts.INN: As carriers grapple with aging technology infrastructure, how does service-oriented architecture (SOA) address their needs and challenges?

No one ever said guiding a distribution network to optimal performance is easy. The insurance and financial services industry's supply chain is as complex as ever, and carriers across all lines want to exploit its value.How do you know how much business you may be missing? How do you hold your distribution network accountable for increased growth and profitability? For many carriers, it becomes the classic "what to do with all that data" dilemma.

Two factors that define a customer's image of an insurance provider are the quality of the buying experience and the effectiveness of the underlying communication. That's why carriers find a comprehensive enterprise communications platform critical. What's needed in communications is consistent excellence.Insurance carriers are feverishly modernizing almost every other aspect of their business, from claims and policy administration systems to agent automation. Large and mid-sized carriers alike are engaged in sweeping projects to grow their businesses and streamline internal processes. In many cases, those efforts provide an opportunity to embrace new capabilities. Yet their approach to document generation has remained static.

CANAL SELECTS TRUMBULL FOR SUBROGATION MGT.Canal Insurance Co., Greenville, S.C., entered an agreement with Trumbull Services, Windsor, Conn., to use Trumbull's Subrooutsource, an internally developed, advanced system designed to enhance subrogation recovery activities for all lines of business nationwide. Trumbull, in conjunction with an experienced subrogation team, will manage the entire subrogation process, leveraging the system's abilities to increase recoveries through effective resource allocation, automated workflows and a continuous improvement model.

Passage of the Pension Protection Act in August 2006 has made siloed IT designs obsolete. Life, annuity and long-term care combinations are now acceptable from a tax and regulatory compliance perspective. Recent pension legislation allows combinations of long-term care policies and annuities. As a result, we can expect a frenzy of product introductions in the near future and beyond.What does this new set of possible combination contracts mean to the IT systems of insurance organizations? It means co-existence and configurability are now of paramount importance. That gives rise to the bigger question: Are carriers' software solutions ready to support the new hybrid product world?

New York - New York Life Insurance Co. promoted Alexander Burbatsky to senior vice president in the corporate information department, reporting to senior vice president Eileen Slevin.

Dallas - 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.

New York - Two technology providers each released a Nationwide Health Information Network (NHIN) prototype in one week—first Armonk, N.Y.-based IBM and now Accenture. Accenture demonstrated its prototype solution for a fully integrated health information system at the 3rd Nationwide Health Information Network Forum on Thursday, Jan. 25, 2005, in Washington, D.C., where IBM also demonstrated its prototype. The solution shows that patient data can be extracted from disparate information systems and converted to a common format that enables sharing among physician offices, medical laboratories, hospitals and other clinical settings.

Malvern, Pa. - A number of chartered property and casualty underwriters that belong to the CPCU Society believe that the industry will experience greater integration of productivity-enhancing technology into day-to-day insurance operations. They'll also face more regulatory pressures, compounded by a growing risk of class action litigation. That said, the members, who were surveyed last year, believe that they are well equipped to deal with the industry's upcoming challenges. The CPCU Society, which counts more than 26,000 members in its ranks and is headquartered in Malvern, Pa., released the results today of a November survey of its member opinion panel. In this first survey of a two-part series on insurance career outlooks, members of the panel were asked for their views on the industry's future, and what any impending changes would mean for their careers. Members did raise concern, however, about the preparedness of their industry to deal with the upcoming wave of retiring Baby Boomers. Combined with a projected shortfall in the number of new entrants with the necessary technical and subject skills, 66% of survey respondents foresee an "experience gap" as very likely to form in the next five years if nothing is done. Their suggested countermeasures include more aggressive recruiting efforts; improved training; retaining retiree capital via consulting, mentoring, and flexible scheduling; more competitive compensation and benefits; and enhanced positive visibility for the industry and its career options. "It's become very clear that education of its employees will be critical to the success of the industry's future," says Betsey Brewer, CPCU, 2006-2007 president of the CPCU Society. "Employers must recruit the best and brightest, especially applicants who hold a professional designation, like the CPCU, and/or have significant industry experience," she says. Source: CPCU Society

Armonk, N.Y. - Framing it as flexible roadmap for insurance companies, governmental regulatory agencies and other healthcare related organizations and researchers, IBM unveiled its technology foundation for the Nationwide Health Information Network (NHIN) yesterday. The technology is designed to enable secure access to healthcare data and real time information sharing and exchange of healthcare data among physicians, patients, hospitals, laboratories and pharmacies, and other stakeholders, regardless of where the medical data is located. As reported in INN in December, two such stakeholders, America's Health Insurance Plans (AHIP) and the Blue Cross and Blue Shield Association, have agreed to support a common set of standards for the network, according to published reports. Under contract to the U.S. Department of Health and Human Services (HHS), Office of the National Coordinator for Health Information Technology (ONC), IBM developed a standards-based system, based on a service oriented architecture (SOA) to connect information that allows for a secure nationwide healthcare information exchange across widely dispersed healthcare communities. The IBM solution will bring patients and clinicians one step closer to electronic medical records and a more efficient, flexible and cost effective healthcare delivery system, says the Armonk, N.Y. company. IBM's NHIN prototype is installed and operational in three healthcare marketplaces and allows seven hospitals and 24 physicians located in Research Triangle/Pinehurst, N.C.; Guilford and Rockingham Counties, N.C./Danville, Va. and Mid-Hudson Valley, New York to securely access and exchange medical and personal health data, regardless of underlying applications and locations of data. Central to the IBM NHIN prototype effort is the use of important interoperability standards for healthcare published by the Health Information Technology Standards Panel (HITSP), key SOA interoperability principles and advanced data management algorithms developed by IBM scientists. In addition, IBM software and IBM's Health Information Exchange, used to collect and share health data electronically from an exchange platform, will help physicians access and view a patient's electronic medical records even if those records originate from disparate systems in multiple locations, reports the company. Also, the use of the IHE Framework (Integrating the Healthcare Enterprise) sponsored by the Electronic Records Vendors Association and the Health Information Management Systems Society (HIMSS) played a major factor in allowing participants to support this initiative. IBM will demonstrate its prototype NHIN Architecture during The Third Nationwide Health Information Network forum to be held Jan. 25 - 26 in Washington D.C. Sources: IBM, INN archives

New York - European and Asian life insurers are outpacing their North American counterparts at streamlining and centralizing their policy administration systems--the core systems that support and deliver insurance products for their customers, according to a global survey of more than 100 insurance technology professionals, which was commissioned by Bermuda-based Accenture.

Austin, Texas - CastleBay Consulting Corp., a consulting services firm to the P&C insurance market, has launched and will facilitate the P&C technology blog to offer the industry an open forum for opinion, conversation and experience-sharing. Sponsored by Guidewire Software, a San Mateo, Calif., provider of insurance technology and services, the P&C technology blog is intended to coalesce and share perspectives from a broad group of technology minds in insurance for the benefit of the entire industry. The objective of the blog is to facilitate ongoing discussion, debate, and unbiased information-sharing on a broad range of insurance technology topics. “It has been a long-standing challenge in our industry for insurance technology professionals to find in-depth and unbiased technical and market expertise – expertise that is needed by virtually every insurer to make the most informed IT decisions,” says Castle Bay CEO George Grieve. “This challenge is the driving force behind establishing the P&C technology blog and making it available to the industry wide technology community.” Grieve will provide his technology insights and experience on the blog while encouraging other authors to share their unique voices and to weigh in on insurance technology relevant topics. In addition to the blog, the site will also offer a wide range of current and frequently updated insurance technology related content and links. Users can access the blog at http://insurancetechnology.typepad.com. Source: CastleBay Consulting and Guidewire

Atlanta - LOMA has released a new edition of Life and Health Insurance Underwriting, for the first time in downloadable PDF format, the life research and education association reports. The revised textbook introduces risk assessment principles applied to underwriting individual and group life and health insurance and provides a thorough introduction to underwriting terminology and concepts. The text is assigned reading for LOMA’s underwriting course, UND 386.

Boston - A new report recognizes 39 insurance companies as “Model Carriers” for “doing everything right” in technology initiatives. The companies, which were cited in a report by Boston-based Celent LLC, were invited to a Model Carrier Summit, which began today in New York.

San Francisco - Advances in medical technology are a main factor driving the trend of increasing health-care costs, and industry stakeholders, insurance companies fundamentally among them, agree that improved evaluation methods are needed to better measure the benefits and risks of new technologies and procedures in order to avoid misallocation of health-care dollars. A wide range of health care industry stakeholders--from medical institutions and insurance companies to Medicare and other administrative agencies--agree on the need for a new review system, says Rita Redberg, MD, MSc, director of Women's Cardiovascular Services at UCSF Medical Center and professor of clinical medicine in the UCSF School of Medicine, San Francisco. Redbert examines this subject in the January/February 2007 edition of the health policy journal Health Affairs, which devotes the full issue to cardiovascular medicine.

Toronto - Sun Life Financial, a provider of protection and wealth accumulation products and services to individuals and corporate customers, announced it has acquired Genworth Financial's U.S. Group Benefits Business for $650 million. The acquisition, which includes Genworth's group life, short- and long-term disability, stop-loss and dental insurance, complements Sun Life's existing Group Insurance business unit and makes Sun Life a top 10 player in the U.S. group insurance market, reports the company. The new unit will be headed by Michael Shunney, who currently heads Sun Life's U.S. Group Insurance business unit from Sun Life's U.S. headquarters in Wellesley, Mass. Source: Sun Life Financial

Geneva, Switzerland - There is a growing disconnect between the power of global risk to cause major systemic disruption and our ability to mitigate it. This is one of the main conclusions released today in the annual Global Risks report, published by the World Economic Forum in cooperation with Citigroup, Marsh & McLennan Companies, Swiss Re and the Wharton School Risk Center. The Global Risks 2007 report identifies 23 core global risks (see below), and suggests that many of these risks have worsened over the last 12 months, despite growing awareness of their potential impacts. The 23 Core Risks identified by the Global Risk Network include:* Technological: breakdown of critical information infrastructure; emergency of risks associated with nanotechnology.* Societal: pandemics; infection diseases in the developing world; chronic disease in the developed world, and liability regimes.* Geopolitical: international terrorism; proliferation of weapons of mass destruction; interstate and civil wars; failed and failing states; transnational crime; retrenchment from globalization; Middle East instability.* Environmental: climate change; loss of freshwater services; national catastrophes (tropical storms, earthquakes and inland flooding).* Economic: oil price shock/energy supply interruptions; U.S. current account deficit/fall in US$; Chinese economic hard landing; fiscal crises caused by demographic shift, and blow up in asset prices/excessive indebtedness. In addition to specific risk mitigation measures, which would require the utmost in global support, communication and technologies, the report suggests that institutional innovations may be needed to create effective responses to a complex risk landscape. The report identifies two such innovations: first, the appointment of Country Risk Officers - an analogy to chief risk officers in the corporate world -- that could provide a focal point in government for mitigating global risks across departments, learning from private-sector approaches and escaping a 'silo-based' approach. “Risks are often still viewed and dealt with in isolation,” says Jacques Aigrain, Chief Executive Officer of Swiss Re. “However, in today's world, global risks are tightly interwoven. To address our contemporary risk landscape, governments and enterprises need to take a holistic approach to overcome silo thinking and acting. We need to prioritize risks effectively, improve preparedness and strengthen public-private partnerships to mitigate risks and to finance economic losses. Finally, we propose to coordinate global risk mitigation efforts by creating the function of Country Risk Officers at governmental level who regularly meet on an international level." The second innovation would be the creation of flexible “coalitions of the willing" around specific global risk issues that can provide momentum to mitigation efforts. This would allow mitigation strategies to emerge from dynamic interplay between governments and business, achieving a balance between inclusiveness and decisiveness, says the report. In addition, the report recommends a number of key needs for addressing specific global risks, including: * Linking energy security with considerations on climate change * Urgently beginning work on a successor to the Kyoto agreement with three central principles: * Involvement of the United States and major developing countries (particularly China and India); * Differential responsibilities for future emissions' reduction dependent upon past emissions and stage of economic development; and, * Common overall responsibility for climate change * Renewing terrorism insurance schemes scheduled to sunset in 2007 in some form; improve framework for public-private arrangements in other countries, and * In order to prepare for a pandemic, governments should increase research into the identification of critical choke-points in the supply/value chain where skill sets are rare, interdependencies are greatest and the risk of triggering systemic failure is highest. "While risk mitigation is set to be a key theme at this year's meeting in Davos, there is continued evidence of a disconnect between risk and mitigation," said Mike Cherkasky, President and CEO of Marsh & McLennan Companies (MMC). "The focus of government and corporations must not only be on reacting to events but on utilizing effective enterprise risk management to set priorities, increase business focus, allocate resources and maximize efficiency. Catastrophic natural disasters in recent years have demonstrated that our ability to confront emerging risks depends more on the choices we make before a disruption than the actions we take during a crisis. Only a systematic planning approach will ensure that countries and companies are prepared for the risk environment we presently face." The topics identified in the report will be at the core of the agenda for the annual meeting of the World Economic Forum taking place later this month in Davos, Switzerland. "While opinion suggests that levels of risk are rising in almost all of the 23 risks on which the Global Risk Network has been focused over the last year, the mechanisms in place to manage and mitigate these risks are inadequate; world leaders must act now," says Thierry Malleret, Director, Head of Global Challenges Team of the World Economic Forum. "While the global economy has been expanding faster than at any time in history, it remains vulnerable." Compiled by the Global Risk Network of the World Economic Forum, Global Risks 2007 draws insights from leading domain experts engaged throughout 2006 and from partnership with Citigroup, Marsh & McLennan Companies (MMC), Swiss Re and the Wharton School Risk Center. In 2007, the Global Risk Network will build on this report in extending its global work. Sources: WebWire, World Economic Forum

Washington – Insurance organizations quickly responded to charges of consumer gouging, leveled yesterday by the Consumer Federation of America (CFA), a Washington nonprofit group representing 300 consumer groups.The charges were given voice by J. Robert Hunter, CFA’s director of insurance. Hunter, an actuary, former state insurance commissioner, and former federal insurance administrator, authored a study that concluded that the P&C industry dramatically increased profits and surplus in recent years.