Policy adminstration

Before they landed triple Axels, they learned how to balance on a blade and skate across the ice. Before they attacked moguls at blazing speeds, they cruised down relatively flat planes. Before they maneuvered a puck all the way across the rink while weaving through opponents from the other team, they learned how to carry a stick while skating across the ice.Sure, much of what viewers saw at the recent Olympic Games in Torino, Italy, involved the awe-inspiring skills of elite athletes. All of these competitors, however, mastered the basics first. Many other athletes-think weekend warriors-never move much beyond these fundamentals.

Everyone loves a story about the "little guy" who succeeds. From the children's classic The Little Engine that Could to numerous business books that describe how a couple of college buddies put a couple of bolts together in their garage and invented something that turned them into millionaires, tales of human perseverance and redemption touch a deep chord in the soul.This is one of those stories. It's about a group of four IT people at CUNA Mutual Group who faced what seemed an almost impossible feat. They were charged with custom-building a customer relationship management system in six months with a budget of $1 million.

Rapid growth. It's a "problem" most companies would welcome. Yet, along with accelerated growth comes a bevy of new challenges. At Geico and its affiliated companies, for example, when written premiums grew from $4.1 billion in 1998 to $4.9 billion in 1999, the company had to process twice as many agent licenses with state insurance departments-just to keep enough agents on the phones selling auto policies."In one year, we jumped from about 27,000 active licenses and 48,000 appointments to 55,000 licenses and 115,000 appointments," says Dan Corridon, director of licensing administration at Government Employees Insurance Co. (Geico), the Chevy Chase, Md.-based direct insurer. "We needed a system that was going to do more for us than what we were using."

Shortly after I returned from IsoTech last November, I received one of those forwarded "chain" e-mails. Unlike most chain e-mails I receive, I actually read this one, and, surprisingly, it pertained to a controversial topic that came up at ISOTech during the roundtable session, titled "The Next 'Killer Technology' in Insurance."Panelist Kevin Kelly, managing director, U.S. insurance industry, Microsoft Corp., said he thought sensing technologies were the next killer technology, and he described how radio frequency identification devices could be attached to people or assets to enable the industry to obtain a plethora of information about who or what it's insuring. "There's a privacy element," he admitted. "But people will give up some privacy for convenience."

The insurance industry, long saddled with paperwork-intensive processes, has become prime turf for enterprise content management (ECM) solutions. ECM is the catchall phrase for what was originally a plethora of solutions, ranging from imaging systems to records management.To carriers seeking to expand their business lines and speed up processing at as little additional cost as possible, content management may be more than some glitzy new technology; it may fundamentally change the nature of the insurance business.

Insurance Networking News recently interviewed Joe Clabby, vice president, server and storage systems strategies, at Summit Strategies Inc., a marketing strategy and consulting firm based in Boston. Clabby has a strong background in networking, systems platforms, operating environments and business application reengineering. He has been in the computing industry for more than 25 years, and has written numerous reports, including "Staring Down the Storage Sinkhole."INN: You describe the current state of storage as a "fragmented morass of data management, storage management, back-up and recovery, as well as related technologies, management tools and manual processes." How did we get in this mess?

The insurance industry has faced fundamental and permanent changes in the last few years. The introduction of e-business to the industry, increased adoption of single-entry, multiple-carrier interfaces (SEMCI) and interactive systems, the educational needs of agents who must adapt to new technologies, along with post-Gramm-Leach-Bliley Act integration pressures, have challenged traditional models and the IT strategies that sustained them.Add to that the increasing financial and performance pressures, and the industry faces a problem common to other financial services segments: how to make the most of existing investments in legacy and other systems, while being nimble in developing new lines of business, partnerships and products.

Segundo, Calif. - Two U.S. surveys of property/casualty insurance customers show a large, untapped opportunity for cost control through electronic billing.Conducted for Computer Sciences Corp. by MarketSearch Corp., a survey of car and homeowner insurance billing methods found 88% of auto insurance customers and 93% of homeowner insurance customers still receive bills by mail. Yet 73% of respondents surveyed indicated they would be willing to pay their insurance bills over the Internet. A second survey that asked approximately 350 P&C professionals at CSC's Connect 2005 conference about their own personal insurance experience confirmed these findings.

Schaumburg, Ill. - Expanding on its seminal 2002 study report, "A Comparative Analysis of Claims-based Methods of Health Risk Assessment for Commercial Populations," the Society of Actuaries (SOA) has appointed Milliman USA to produce an updated version of the study.The 2002 report, which evaluated the state of the art in predictive modeling software for health care claims at that time, provided an unbiased forum for comparing the technology and methodologies then available in the market. With the passage of three years and the continuous refinement of these methodologies and software, the SOA strongly felt a fresh look at the tools would provide immediate practical benefits to the health care community.

Novato, Calif. - Fireman's Fund Insurance Co. has named Oliver Bussman as its chief information officer, according to Charles (Chuck) Kavitsky, chief executive officer.Bussman has many years of IT leadership experience in the banking, insurance and asset management industries. He will lead the implementation and delivery of the significant IT investment Fireman's Fund has made to improve its customer and employee experience and to its operational effectiveness.

Des Moines - Many auto insurance companies ask customers to estimate their annual mileage when applying for a new policy, but these up-front estimates generally have a minimal influence on the overall premium. And, these companies don't ask for updated mileage readings over time.But what if an insurance company asked policyholders to report exact mileage readings over time and, by doing so, they could control how much they pay for car insurance by controlling the number of miles they drive?

Cleveland - Axentis, a provider of governance, risk and compliance (GRC) management solutions that is included in a Gartner research report titled, "Adoption of Software-as-a-Service Is Happening Outside of CRM," has made the report available on its Web site at www.axentis.com.The resport analyzes the emergence of the software-as-a-service (SaaS) model and its widespread adoption in new industries including compliance management, which Gartner states is currently the second largest market for SaaS solutions.

Los Angeles - Farmers Insurance Exchange has begun serving civil summons and complaints upon Redding, Calif. auto glass company Onsight Auto Glass and its owner, accusing them of taking part in a scheme designed to defraud Farmers and its policyholders. The civil complaint, which is similar to prior successful lawsuits against auto glass businesses and body shops who submitted false insurance claims, seeks not only damages for the fraud allegedly committed, but seeks injunctive relief, where the courts are asked to order a halt to these deceptive practices.Outlining a highly unusual and aggressive billing scam, the lawsuit details how the alleged perpetrator deliberately over-billed Farmers for services on 455 occasions. As alleged in the civil complaint, the defendant created a sham office in a remote area, so it could manipulate its billing. In fact, the only things located where the shop is claimed to exist were abandoned mines and a shack. There was no electricity, no running water and certainly no auto glass business. Under national guidelines, automobile glass claims are paid at a premium if the shop is located in less densely populated areas. As explained in the complaint, defendant created documentation that the shop was located in a remote area, so it could charge Farmers significantly more.

Kansas City, Mo. - While increased frequency of hurricanes is nothing new in historical terms, the enormous growth in coastal population and development is dramatically increasing the potential for insured losses, according to a new paper from GE Insurance Solutions."Demographic trends in Florida and other coastal locations as well as the likelihood of increased frequency and severity of storms should remind the (insurance) industry of the growing exposures it will continue to face. The cost of hurricanes will rise--sooner or later surpassing even those of Hurricane Katrina," says the paper titled "Coastal Warning: The Rising Costs of Hurricane Frequency and Severity."

Chicago - Danish insurance company ALKA is fighting customer fraud and enhancing customer services with PredictiveClaims, an application developed by SPSS Inc. ALKA recently purchased and implemented the software in an effort to improve claims handling efficiency while reducing the cost of fraudulent claims.ALKA is one of the five leading insurance companies in Denmark. To differentiate itself in a highly competitive market, the company aimed to optimize its expensive claims handling processes and offer better service to customers. ALKA sought to enable "fast-track claim handling" while still sifting out the fraudulent cases from its high claim volumes. Industry experts estimate that on average 10% of all claims are fraudulent, whereas usually only 0.5% to 1% of fraud is actually being detected.

Seattle - Many companies advertise great service, but how many have been recognized for this by a non-partial third party such as J.D. Power and Associates? To receive recognition, companies must score higher than 730 out of a possible 1000 points. PEMCO received 911 points, a score that was noted as unusually high by J.D. Power and Associates."We come to work every day committed to giving our customers the absolute highest level of service and value," says Jon Osterberg, spokesperson for PEMCO, a provider of auto, home, boat, life, and umbrella insurance to Washington state residents. "This certification demonstrates that. Service is the bedrock of PEMCO's culture, and it's extremely gratifying to see our customers recognize that."

Oconomowoc, Wis. - Trends indicate that the role of the IT manager requires more focus on business strategy and less time spent on end-user service in today's age of widespread technology, according to Paragon Development Systems (PDS), a provider of IT services and products."Companies are beginning to realize that their IT professionals can be indispensable in identifying and pursuing competitive advantages if given the freedom and time to do so," said Austin Park, vice president of infrastructure services for PDS. "More and more, successes or failures in business hinge on technology, so why shouldn't IT managers spend their time focusing on business rather than putting out fires."

Armonk, N.Y. - IBM has launched a companywide initiative that combines its software and industry consulting expertise to help companies tie data together across disparate business processes"Next to people, information is a company's greatest asset, but it's value can't be realized if it's not effectively managed and delivered to the right people, business applications and processes," says Steve Mills, senior vice president, IBM software group. "While there's no shortage of individual piece-part products out there to help manage, search, secure and store information, companies drowning in data need a holistic approach if they have any hope of using their information for real business advantage. By combining our software and consulting expertise, IBM is helping clients unlock the real value of their business information."

Hartford, Conn. - The Industrial Hygiene Laboratory of St. Paul Travelers has added a state-of-the-art instrument that helps customers address OSHA's proposed lowering of the Permissible Exposure Limit (PEL) for hexavalent chromium (CrVI). St. Paul Travelers purchased this instrument to help its customers better protect their employees and reduce workers compensation losses.Hexavalent chromium (CrVI) is a human carcinogen for which OSHA has proposed a 50x reduction in the PEL from the current standard. The new Inductively Coupled Plasma Mass Spectrometer (ICP-MS) has enabled the Industrial Hygiene Laboratory to develop a method for the analysis of CrVI below OSHA's proposed PEL.

San Diego - CareGroup Healthcare System has gone live at Beth Israel Deaconess Medical Center (BIDMC) with an application that delivers automatic healthcare information updates every 15 minutes to the Centers for Disease Control (CDC) in Atlanta. The bio-surveillance system, which feeds the CDC with information key to early identification of disease trends, is built on the CACHE post-relational database. InterSystems Corp., a health care database provider, spotlighted the bio-surveillance implementation at the HIMSS 2006 conference in San Diego, Calif.BIDMC is one of 10 U.S. hospitals that were approached by the CDC to provide medical data on an ongoing, around-the-clock basis. The initiative is part of a mandate by Health and Human Services (HHS) Secretary Michael Leavitt, who chairs the American Health Information Community (AHIC), a group charged with advising the federal government on standards for electronic health records (EHRs). Bio-surveillance and public health monitoring are among the first focus areas for AHIC and Leavitt has stated that he wants a system for streaming emergency department (ED) data to public health authorities in place by the end of 2006.