Policy adminstration

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.

New York – It’s understood that the actuarial department has vast computing needs and a heavy reliance on actuarial modeling, valuation and supporting technology. But stochastic modeling requirements for financial reporting, pricing and risk management are causing a growing desire to benefit from the move toward high performance computing. This, coupled with the need to pull actuarial executives out of the data preparation and calculation mire so they can focus on financial analysis and business decision support, is creating a significant push toward greater actuarial/IT alignment. These were but some of the insights that came from a recent Actuarial Transformation Roundtable, released by the Insurance and Actuarial Advisory Services (IAAS) practice of Ernst & Young LLP yesterday. The group, which brought together senior actuaries and IT professionals, focused on ways to better align the two departments in order to meet the heightened business/management demands created by competition as well as increasingly complex products, extensive Sarbanes-Oxley (SOX) compliance requirements, the shift from rules-based to principles-based valuation and the growing volume of data in general that must be integrated and managed.

Indianapolis - WellPoint, Inc. is the latest benefits provider to unveil a plan to help address the growing ranks of the uninsured. The WellPoint plan is a blend of public and private initiatives aimed at ensuring universal coverage for children and providing new and more attractive options for the working uninsured. The plan is a part of a mission to improve the lives of the people it serves and the health of its communities, says the company. Insurance Networking News reported in October 2006 that eHealth Inc., the parent company of Mountain View, Calif.-based eHealthInsurance Services Inc., planned to serve the growing market of uninsured and underinsured consumers with online tools and ultimate health insurance products. The company, which planned to raise $47.1 million in an initial public offering, said in its prospectus that, except for large companies buying insurance in bulk, finding medical coverage is time-consuming, paper-wasting, complicated and expensive. Through its Web site, eHealth has sold health insurance electronically to 325,000 consumers, and points to this statistic: More than 40% of those customers were uninsured before finding the site. At WellPoint, an independent licensee of the Blue Cross and Blue Shield Association, the mission is similar: "A core focus of our company's strategy is to reduce the rate of the uninsured and under-served," said Larry Glasscock, WellPoint's chairman, president and CEO. "The plan we've developed will broaden the reach of our health care system to include those who need it most." According to WellPoint, more than 46 million Americans under the age of 65 did not have health insurance in 2005. Approximately 45% of these individuals are either eligible for public programs and are not enrolled or voluntarily choose not to purchase coverage, while the remaining 55% simply cannot afford private insurance. Although WellPoint was received national recognition in 2006 for its health care Web sites, the company's plan may not have a robust technology focus (similar to eHealth's). Rather, its focus is to support the expansion of state health care programs to cover more of the 9 million American children who went without coverage last year. Specifically, WellPoint urges states to expand their programs to cover children in families that earn up to 300% of the federal poverty level (FPL), which means that for a family of four, they can earn up to $60,000. The plan also includes a call for improved outreach to enroll the majority of uninsured children -- up to 70%-- who are already eligible for public programs. WellPoint also calls for the expansion of state health care programs to include parents in families that earn up to 200% of FPL (a family of four could earn up to $40,000) and for childless adults who earn up to 100% of FPL ($9,800 for a single adult). If adopted by all states, the proposed expansion of public programs, coupled with a successful outreach campaign, could provide coverage to 25 million people who are currently uninsured, claims WellPoint. To help pay for the changes to these programs, WellPoint will support an increase in tobacco taxes. WellPoint's plan also includes a financial commitment from the company's charitable foundation of at least $30 million over the next three years to support community and state-based programs related to the company's uninsured initiatives across the country that are helping to provide access to care.Sources: PRNewswire, Insurance Networking News' Archives, WellPoint

Atlanta - Although the life insurance industry is predicted to experience flat to modest growth in 2007, insurance carriers may do well to consider technological tools that will help them prepare for the imminent retirement of many Baby Boomers, according to Atlanta-based LOMA, an international insurance association.The prediction comes from LOMA’s Resource magazine, which published its annual forecast by the LOMA board of directors. The LOMA board of directors is composed of chairmen, presidents, CEOs and other top executives of leading insurance and financial services companies in the United States, Canada and internationally.

Dublin, Ireland – Many of the services required by businesses including human resources, billing and transactional processing, may be entirely peripheral to its core competencies, according to research from Dublin, Ireland-based Research and Markets. Using a business process outsourcing (BPO) provider can help reduce costs while at the same time allowing the enterprise to focus on its core business.

Philadelphia - CIGNA Corp. redesigned its flagship public Web site to be easier for users to navigate and offer users extensive health information and online resources in a newly added Health & Money section.

Des Plaines, Ill. - Regulatory modernization, a long-term terrorism insurance solution and the Florida property market are top-of-mind issues the insurance industry will address in 2007, according to the Property Casualty Insurers Association of America (PCI).

Around the world, CEOs at insurance companies are slowly coming to the conclusion that they need smoothly running IT departments if their companies are to remain competitive. As a result, IT projects and budgets are getting some respect and are becoming less likely to fall victim to arbitrary cuts, according to analysts in North America, Europe and the Asia-Pacific region.The newfound respect is coming at a time when IT departments face intense regulatory pressure in Europe-and tamer but still formidable rules in the United States, China and Japan, according to reports from Boston-based Celent LLC. Pressure also arises from the need to service customers and distributors in real-time transactions and with rapid information flow, Celent says. Those functions can strain internal legacy systems, prompting insurers in mature markets, such as the United States, Europe and Japan, to update communications systems and core data environments.

Buttressed by the efforts of annuities associations, technology firms and broker/dealers, Pacific Life Insurance Co. is among the insurance firms leading a long-term, yet determined drive to make the annuities business paperless. Though its work is in an early stage, Pacific Life likes the results it has seen.Since Pacific Life began using an automated system for annuities called Automated Customer Account Transfer Service/ Insurance Processing Service (ACATS/IPS), the carrier is boosting its speed in obtaining notification of customer requests to change broker/dealers, while significantly improving customer service. For instance, now Pacific Life gets almost immediate notification of customer requests to change broker/dealers, whereas before it took at least six weeks.

The road seems less bumpy these days for insurance carriers that use state-of-the-art automated compensation to calculate and track agents' commissions. A single streamlined third-party system can replace a hodgepodge of legacy software and manual processes, users say, helping to reduce clerical work, increase accuracy and improve reporting. Moreover, carriers report that the software opens up a whole new world of analysis that pinpoints the true sources of profit and helps identify and retain the best agents.The accuracy rate for commissions at Blue Cross Blue Shield of Florida, for example, has improved from 80% before introducing up-to-date automated compensation to 95% after the implementation, says Linda Lamb, BCBSF vice president of sales business management. The remaining errors arise from data entry miscues or software problems outside the system, she says.

Imagine reaching deep into a seemingly bottomless bucket filled with marbles. One cat's eye is hidden in the massive assortment, and it's your job to pull it out-in one try.Retrieving that prize won't be easy. In a similar vein, many a reader has expressed frustration at the pressures associated with finding a way to implement the right technology for the right application at the right price-in the shortest time possible. They've also talked about outright fear at the prospect of failure to achieve those goals.