Practice management

Ipswich, Mass. - The life insurance industry achieved the dubious distinction of having the highest percentage of companies failing to adequately respect the online user. Such are the findings from a survey conducted by The Customer Respect Group, an Ipswich, Mass., research and consulting firm that focuses on how corporations treat their online customers.

Fairfax, Va. - The Public Entity Risk Institute (PERI), a Fairfax, Va., nonprofit risk management training and educational organization, has released a resource guide for controlling workers' compensations costs that focuses on using telephonic nurse injury reporting and triage as important early intervention. The PERI Day of Injury Resource Manual outlines an effective strategy lays out a proactive approach for addressing rising costs of workers' compensation by establishing processes for responding to employee injuries starting right on the day of injury, says Gerard J. Hoetmer, executive director of PERI. "Our research presents compelling evidence that employer actions on the day of injury have a profound impact on the overall cost of workers' comp claims." The PERI Day of Injury Resource Manual builds on the findings of a study PERI jointly sponsored with the Schools Insurance Authority (SIA), a joint powers authority based in Sacramento, California. In partnership with SIA, the PERI Day of Injury study assessed the relationship between employer actions on the day an employee was injured and workers' compensation costs. The study focused on injury reporting, directing medical care, and early return to work initiatives. A major component of the research focused on SIA's use of telephonic nurse injury reporting/triage. The study demonstrated that the nature, duration, cost and eventual outcome of a claim can be largely shaped and controlled by the employer's response on the day of injury. Based on the study, the manual details injury-reporting processes for organizations to put in place as part of an overall early intervention strategy. This how-to manual also highlights best practices for building a structured return-to-work program and provides organizations with sample forms, checklists, and training materials. For more information, go to www.riskinstitute.org. Source: The Public Entity Risk Institute

Alexandria, Va. - The Independent Insurance Agents & Brokers of America (the Big "I") disagrees with, and is disappointed by, New York Attorney General Eliot Spitzer's decision that four leading companies can no longer offer incentive compensation to agents and brokers selling their products. Spitzer announced on Nov. 30 that he has notified ACE, AIG, St. Paul Travelers and Zurich that, under agreements reached with his office earlier this year, they may no longer offer this form of compensation because they have crossed the 65% "tipping point" in those agreements as to homeowners', personal auto, boiler and machinery and financial guaranty insurance. Those agreements bar carriers from paying incentive compensation to their sales forces when more than 65% of that line of insurance is sold by companies that do not pay incentive compensation. "The independent agent and broker community is greatly distressed by this development," says Big "I" CEO Robert Rusbuldt. "These carriers are now unable to use what otherwise is a perfectly legal way to compensate their sales forces, just as is done in virtually all industries across America. It is ironic that the illegal activities uncovered by Mr. Spitzer occurred in commercial lines, not personal lines, and yet, it is largely in personal lines that the fallout is being felt today. The solution imposed on carriers and agents of banning incentive compensation is totally misplaced and directed at business that was never a problem to begin with." The Big "I" continues to defend incentive compensation as a legal, legitimate form of compensation that is employed in all sales-based industries. Any compensation system can be abused, but the problem lies with those few who abuse it, not the system itself. "There is no doubt that a few bad actors in the commercial lines area abused the system, and we have always agreed that those who break the law should be punished to the fullest extent possible," Rusbuldt says. "But it is absolutely wrong and indefensible to penalize the innocent majority for the misdeeds of a handful of people. This decision will impact thousands of agencies across the country as they face reductions in compensation that will hamper their ability to create jobs in their communities, train staff, invest in their agencies, and provide consumers access to insurance. On behalf of the hundreds of thousands of agents and brokers across America who had no part in the dishonest activity of a few, we will continue to fight to preserve the right of companies to pay legal incentive compensation." Founded in 1896, IIABA (the Big "I") claims to be the nation's oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance-property, casualty, life, and health-as well as employee benefit plans and retirement products. Source: The Independent Insurance Agents & Brokers of America

Property and casualty insurance fraud cost carriers about $29 billion last year, according to the New York-based Insurance Information Institute. The trouble is that's just part of the picture. It's safe to say the number would increase when you count fraud from life and health.It's also safe to say insurance fraud has been with us for a long, long time. Has detection improved? Does detection even matter if the perpetrators aren't prosecuted? Are insurers benefiting from fraud detection and prevention? And, how are they going about it?

Its negative connotation is deserved. For insurance companies, a data breach spells instant trouble-the least of which is potential loss of reputation, brand and revenue. If a court of law rules the insurance company is negligent, a data breach has the potential of ultimately shutting the carrier's doors.Recent research by the Chief Marketing Officer Council, Palo Alto, Calif., revealed that a company loses, on average, from 0.63% to 2.10% value in stock price when a breach is reported-equivalent to a loss in market capitalization of $860 million to $1.65 billion per incident.

By early 2004, it was obvious to everyone at the New Mexico Mutual Casualty Co., also known as New Mexico Mutual Group, that the company's green-screen legacy claims system had outlived its usefulness. The company was bringing in a new Web-based policy administration system, and the contrast between it and the tottering claims system was glaring.Navigational and functional problems with the legacy system had cut into claims department productivity at the Albuquerque, N.M.-based carrier. Only one user could work on a claim at a time.

According to a survey conducted by Fierce-Wireless-Bluefire Wireless Security this year, more than 80% of financial services respondents say their organization's use of handheld devices had increased over the past two years. Meanwhile, 87% say they are concerned about the security of e-mail access to corporate server-based accounts and of remote access to corporate networks, and 85% say that access to Web-based e-mail had become a significant security concern.

What do Carriers Need to Increase Market Share?

TOOL HELPS EMPLOYEES MANAGE THEIR BENEFITSPlanAdvisor, a benefits management tool from Milwaukee-based Zywave Inc., features a Plan Selector module to enable employees to review their own health costs. PlanAdvisor generates management reports without carrier data feeds, analyzes the effects of changes in the plan design and calculates projected plan costs, based on trend and claims information. It also offers benchmarking, modeling, and analysis to allow brokers to deliver information based on industry comparison data and actuarial factors, which can help clients make informed decisions.

Chinese insurance companies were bracing for an onslaught by global competitors last month when a commitment to the World Trade Organization dictated opening the borders to foreign competition."Almost all insurance business is opening to foreign insurers," says Xiaolin Li, a dean at Beijing-based Central University of Finance and Economics. "The exceptions are group insurance and life insurance, which requires a foreign insurance company to set up a joint venture with a local partner."

CAPITOL SELECTS STG BILLING SYSTEMMiddleton, Wis.-based Capitol Insurance Cos. chose Renaissance Billing Solution from New York-based Systems Task Group International Ltd.'s (STG) to support billing and accounts receivable operations. The system will replace Capitol's existing billing systems and will enable the consolidation, centralization and the streamlining of Capitol's cash management and accounting operations. It will provide Capitol with advanced technology support, flexibility and configurability.

Boston - As helpful as technology can be, insurers are not immune to technology glitches. One such case, as reported by The Boston Globe, hit Blue Cross Blue Shield of Massachusetts. The Boston-based insurer found itself sending out automated phone calls to Massachusetts senior citizens with Medicare drug benefits, asking them to repay up to $1,400 because the monthly premium automatic deduction from their Social Security checks failed to work.In March, The Tampa Tribune reported that hundreds of thousands of seniors received inaccurate Social Security payments because of problems with Medicare Part D drug coverage premiums, according to The Boston Globe. Most were overpaid because the premiums were not being deducted. Others received accidental refunds that averaged $215 and were asked to return the money.

Boston - Senior insurance IT executives are increasingly focusing on strategic spending to meet market demands and showing some concern over a softening property/casualty market, according to Celent LLC's new report, "Insurance CIO/CTO Pressures, Priorities, Projects, and Plans for 2007 Survey Results.""There is continued focus on meeting market demands for speed to market and ease of doing business, and on new projects involving core systems, data mastery, and distribution," says Matthew Josefowicz, manager of Celent's insurance group and author of the report. "Budgets and staffs are generally flat or growing modestly, but strategic investments continue. However, there are some indications that large property/casualty insurers may be keeping their powder dry until they can gauge the impact of the softening market."

Hartford, Conn. - Claims effectiveness is fast becoming a differentiating competitive feature among property/casualty companies as new measurement and process controls change the way claims are quantified, according to a new study by Hartford, Conn.-based Conning Research & Consulting Inc.The study, "Property-Casualty Claims Management: Unlocking Value" is based on a survey of senior property/casualty claims executives and on statutory data analysis. It examines changes in the insurance environment, and particularly in claims, including technology, staffing, outsourcing, regulatory and catastrophe issues.

Needham, Mass. - In 2007 and beyond, the global financial services industry will increasingly grapple with three major strategic shifts: reinventing financial services at its core; repurposing financial services relative to the global diversity of a changing customer base; and helping restore confidence in an uncertain world, according to a series of research reports from Needham, Mass.-based TowerGroup.The reports examine the top business drivers, strategic responses and technology priorities that will fuel core sectors of the global financial service industry in 2007.

Philadelphia - With a focus on customer service, Philadelphia Insurance Companies launched a new corporate Internet site, www.phly.com. The Philadelphia company, which designs, markets and underwrites specialty commercial and personal property and casualty insurance products for select target industries or niches including nonprofit organizations; the health, fitness and wellness industry; select classes of professional liability; the rental car industry and more, says the new Web site will provide self-service functionality to all agents and policyholders. The project quickly evolved into an Internet "program," reports the company. The creation of a program provides the framework to efficiently and strategically prioritize and bundle enhancements that will ensure alignment with business goals. The new Philadelphia Insurance Web site is designed to make doing business easier for a select group of "preferred agents" and a broader network of independent agents, which consists of 38 regional and field offices across the United States. The new site includes enhanced menu navigation, and updated search functionality. Also enhanced is the site's login authentication, now featuring one login per agent or customer. Visitors to the site can browse policies, view claims, invoices, active lists, quotes, and auto ID cards. The carrier also added an online payments feature. The project goals included an aggressive timeline, and the carrier's IT department and automated services division (project management/business requirements group) collaborated using in-house tools to manage information. The ultimate goal, says a company representative, is to provide feedback capabilities that enable a two-day response to any incoming question. Source: Philadelphia Insurance Companies

Cincinnati - A technology overhaul is continuing at Cincinnati-based Great American Insurance Co. with the decision to replace the company’s policy and customer system of record.

Sydney, Australia - Insurance Australia Group Ltd. (IAG), announced its intention to make its global operations carbon neutral within five years."As an insurance company we have been very concerned about the risks and impact of climate change on our community for a number of years," says Mike Hawker, IAG's CEO. "We have been working on ways to reduce our own CO2 emission footprint, alerting the community about the risks of climate change, and researching opportunities for our customers to benefit from CO2 reducing activities. We are furthering our efforts, by announcing our intention to be carbon neutral within the next five years."

El Segundo, Calif., - Insurers feel the need to develop original approaches to attracting and retaining customer in various market segments. During a two-day conference hosted by Computer Sciences Corp. (CSC), a few insurers gave examples of these approaches.Panelists at the conference noted that insurance marketing programs must appeal to three distinct generational groups: Generation Y (ages 18-29), Generation X (ages 30-40) and baby boomers (ages 41-59). Each group has distinct demands for service; therefore, insurers must offer different Web-based services that address their consumers' varying levels of comfort with technology.

Hartford, Conn. - Aetna Inc. is offering an interactive voice response (IVR) system called Voice2Form to enable members with both Aetna disability and medical insurance to provide consent to participate in the insurer's Integrated Health and Disability (IHD) program. Aetna's integrated informatics studies show that the IHD program may reduce short-term disability durations by as much as 10.7% or 5.6 days per claim.