Policy adminstration

Overall IT spending among U.S. insurers in 2005 will be $28.8 billion, accounting for a little less than 3% of total net written premiums, and will grow to $42 billion by 2010, according to reports from Boston-based Celent LLC.How are IT departments going to manage that spending? What software will they buy? Which software should they toss or keep? What kind of return are they getting? Insurance executives want to know answers to these questions in their own companies.

The insurance industry is awash these days in acronyms. Adding to the influx of acronyms is the confusion they tend to cause: Many don't describe what they truly represent. The number of definitions for what business process management (BPM), also known as business process optimization (BPO), is-and what it can do-are numerous. Yet, as stated in INN's cover story, its popularity is soaring."Insurance companies are relying on vendors to tell them two things: where to use it, and where not to use it," says Marc Cecere, vice president of the financial services team at Forrester Research Inc., a Cambridge, Mass., research firm.

When Mike Koscielny joined AAA of Michigan four years ago, the Dearborn-based auto club was entering expansion mode. It was acquiring AAA clubs in Illinois, Minnesota, Iowa and Wisconsin-and planned to grow in other nearby states.As a result, senior managers were considering how to accommodate the increase in business, says Koscielny, director of regional underwriting operations. Joking over lunch at Brainstorm's Business Process Management Conference in Chicago in April, he tells Insurance Networking News: "We thought we might have to add on to our building just to house the extra employees we'd need to meet our growth targets."

STUDY SHOWS POOR USABILITY OF WEB HOME PAGESAccording to a recent study by Oak Park, Ill.-based Vox Inc., home page usability of many insurance companies isn't up to snuff. The study analyzed the positioning of key customer and user elements, such as insurance quote and "find an agent" functions. Each company was given a rating based on a set of usability and benchmark criteria. One exception to the overall findings is 21st Century Insurance Co., Woodland Hills, Calif., which recently redesigned its home page. The study, conducted in the first quarter, reviewed content and where it was positioned on the page, comparing 12 insurance providers: State Farm, Allstate, Progressive, Geico, American Family, Liberty, 21st Century, Country Financial, AIG, Nationwide, AAA Chicago and USAA.

WEB-BASED POLICY PROCESSINGAgent X Press, a suite of processing capabilities, is designed to enable small insurers to support their agents and MGAs with Web-based policy processing. The suite from Wyncote, Pa.-based IDP Inc. is available to new and existing clients of IDP's VISION 21 policy management system. Agent X Press' functionality includes online policy inquiry for billing and claims information; and quoting, application submission and issuance. Agents enter a customer's name or unique identification data, such as policy number. They can then obtain the status of a bill or a claim, or obtain an accurate quote, within seconds, according to IDP. Subsequent to providing a quote, Agent X Press will permit the agent to electronically submit the application to further speed the process.

Build it and they will come. Such was the faith in location intelligence technology from Church Mutual Insurance Co.'s leaders back in 1999 when the Merrill, Wis.-based provider of insurance for religious institutions began looking for a way to improve its claims operations.Seven years later, the insurance company is using mapping technology from Troy, N.Y.-based MapInfo Corp., in some surprising ways.

The Data Warehousing Institute based in Seattle came to the conclusion in its August 2005 report, "Strategies and Technologies for Deploying Business Intelligence," that 66% of organizations in different industries are trying to transform business intelligence (BI) from a departmental solution to an enterprise one. Only 17% of organizations have completed the task, while the remaining 17% will continue to deploy BI departmentally. This data shows that BI has a ways to go until it reaches maturity in most organizations.Newport Beach, Calif.-based Pacific Life Insurance Co. seems to have the maturity factor under control. It has implemented an enterprise server equipped with BI features.

Mayfield Village, Ohio - Young independent insurance agents identify technology to help them more easily write business and service customers as the second most important thing – after competitive rates – carriers can offer an independent insurance agency. Drive Insurance Group of Mayfield Village, Ohio-based Progressive Casualty Insurance Co. discovered this while conducting a survey of more than 750 young (40 years of age or younger or those who have been in the industry less than 10 years) independent agents to find out what they think about everything from business growth opportunities and technology to the skills necessary to succeed and the challenges faced by the industry.Drive insurance conducted the survey to coincide with the National Young Agents Leadership Institute, put on by the Independent Insurance Agents & Brokers of America, which gets underway in New Orleans next week.

Palo Alto, Calif. - Nearly two-thirds of security executives believe they have no way to prevent a data breach, according to research by the Ponemon Institute, an Elk Rapids, Mich.-based privacy and information management research firm. What's more, most respondents believe their organizations lack the accountability and resources necessary to enforce data security policy compliance.The survey report – "National Survey on the Detection and Prevention of Data Breaches" – was sponsored by Palo Alto, Calif.-based PortAuthority Technologies Inc. and examines the responses of 853 randomly selected, U.S.-based information security professionals to questions related to data protection and prevention within their organizations.

Cambridge, Mass. - Insurance companies will gradually move away from geographic and product silos, focusing more on cross-domain business processes, according to a report from Cambridge, Mass.-based Forrester Research Inc. The report goes on to predict insurance companies will identify processes that can be implemented with common systems and configured for local needs and that this trend will increase the use of business process outsourcing (BPO) as carriers outsource nondifferentiated processes.The report, "Process-Oriented Insurance Will Drive BPO," suggests insurers implement specialized project teams with process and sourcing expertise, use frameworks like Six Sigma and deploy systems that provide the flexibility to accommodate local needs without complex development efforts.

Charlotte, N.C. - Montgomery Mutual Insurance Co., a Charlotte, N.C.-based member of Liberty Mutual Group, Boston, implemented the Commercial IQ SmartRisk underwriting and pricing system for business owners' policies developed by Liberty Mutual Agency Markets' strategic business unit.After a pilot launch in Maryland yielded a 100% increase in policy issuance, Liberty Mutual made Commercial IQ SmartRisk available to appointed agents for BOP coverage in Delaware, District of Columbia, Georgia, North Carolina and South Carolina, and will be available to Virginia appointed agents this fall.

Washington - Senior technical and management professionals from a number of insurance companies--Prudential, The Hartford, AIG and Blue Cross Blue Shield of Minnesota--are among the presenters at Rules Technology Summit, a new event at the 2006 International Business Rules Forum, November 5-9 in Washington.The Rules Technology Summit is aimed at technical audiences including IT architects and IS professionals whose goals are to take advantage of the business rules approach to build agile applications with the flexibility to accommodate frequently changing business conditions.

London - While insurers continue to embrace the use of return on investment (ROI) to measure IT project success and failure, many do not meet their own targets. In fact, only 11% are able to achieve their ROI objectives, according to new research released by SunGard's iWORKS business unit, an insurance technology company.

Boston - Dozens of new insurance activities, such as 'green' building credits and incentives for investing in renewable energy, are emerging to tackle the causes of climate change and rising weather-related losses in the U.S. and globally, according to a new report issued this week by the Boston-based Ceres investor coalition. But the report also states that more insurance companies need to be offering similar services to minimize losses and make the most of business opportunities related to climate change.

Washington, D.C. - As the country approaches the first anniversary of Hurricane Katrina next week, the American Insurance Association (AIA) and ProtectingAmerica.org were at odds as to how best to proceed with a national catastrophe agenda.

Health plan sponsors are ready to help workers make sound medical and financial choices, according to a recent employer survey. The problem is that many of these clients do not have the healthcare decision support tools to do so, notes Starmark, a Lake Forest, Ill., company that specializes in small group healthcare benefits and serves businesses with two to 50 employees.

Bloomington, Ill. - State Farm has appointed Bill Pieroni as Operations Vice President. Pieroni joins State Farm from Chicago-based Aon Corp., where he was senior vice president. Pieroni will assist executive leadership at the nation's largest insurer of autos and homes with strategic planning.

Seattle - Safeco has launched online technology that enables independent agents to make instant changes to clients' commercial auto policies. The real-time capability cuts a one-week process into a two-minute drill--saving agencies time and enhancing their customer-service experience.Safeco agencies in 10 states have received access to Safeco's enhanced policy change tool. The rest of the company's more than 9,000 independent agent partners will receive access during rolling state launches that run through November 9. All agencies can use Safeco's single intake system for commercial endorsements, a simple policy change Web form introduced this spring that eliminates agents' need to call, mail or fax.

Mayfield Village, Ohio - Drive Insurance from Progressive, the carrier's program for distributing auto insurance through independent agents and brokers in the United States, has signed a joint marketing agreement with Homesite Insurance Group, a national provider of home insurance products.The agreement paves the way for a test that will allow selected Drive agents in three states--Ohio, Pennsylvania and Oregon--to provide their Drive auto insurance customers quotes for homeowners, renters and condo insurance policies underwritten and serviced by Homesite.

Seattle - Envision Telephony Inc., a provider of contact center software, has named Blue Cross of Idaho among the winners of its 2006 Envision Excellence Awards. Other winners include ShopNBC, Staples and Wachovia.The awards honor companies using Envision's solutions that have transformed their businesses and improved the quality and delivery of business performance required to deliver exceptional customer service from agents' desktops to enterprise decision-makers.