Practice management

Insurance companies historically have been hesitant to outsource core business processes, fearful that relying on vendors to perform processing and support services is a risky proposition. That perception may change, now that one of biggest names in insurance IT is delving into BPO processing and support services for life policies and annuities.IBM Corp. announced in November that it is purchasing Liberty Insurance Services Corp. (LIS), the Greenville, S.C.-based processing subsidiary of RBC Insurance. The new IBM subsidiary will assume LIS' life and annuity processing services for more than a dozen life carriers and will provide contact center management, policy administration and claims processing.

A new study by London-based research firm Datamonitor suggests U.S. corporations that aggressively invest in speech-enabled self-service technology have the opportunity to reduce long-term dependency on offshore call center operations.However, one insurance call center executive contacted for this article questions the validity of this notion in its entirety, stating that there isn't necessarily a direct correlation between speech-enabled technology investments and offshore call center scale-backs.

The agent/broker compensation model is poised to change, with a departure from commissions based on profitability and volume incentives.A poll of attendees at The Conference Group's 16th annual executive conference for the property/casualty industry in December revealed insurance executives expect changes in the brokerage and regulatory models to have fundamental and long-lasting effects on the industry.

Allianz Life Insurance Co. of North America plans to add bank distribution alliances and increase its multicultural marketing efforts next year, according to the company's new director of sales and distribution. Hayward Sawyer, who joined the company in June and was promoted to the twin posts in December, says Allianz Life is in the process of hiring a manager to expand its bank relationships in the next 12 months."We currently have a couple major relationships, but we want to work with major banks, including regional banks," he says.

Like most large U.S. insurance carriers with aging technology platforms, CNA Financial Corp. was faced with a critical decision: How to modernize a legacy claims system to meet 21st century business requirements. And like other insurers, the Chicago-based commercial carrier is banking on technology that integrates multiple disparate systems, streamlines adjuster workflow, provides more timely management information, and reduces claims and IT costs.

When Sachin Shah began working at MetLife in 1999, the carrier was using a DOS-based system to support online benefits administration. Five years later, Shah and the MetLife Inc.'s IT team have built an award-winning benefits administration portal that has been adopted by more than 17,000 corporate customers, brokers and third-party payers.

Health insurers face a difficult dilemma today: Although customers are demanding higher levels of service that are more convenient to access, they are also increasingly sensitive to rising health care costs.Most health carriers are trying to balance these new demands against operational cuts designed to improve their bottom line-a seemingly impossible task.

You no doubt have seen ads from property/casualty insurers that promise fast results when disaster occurs. While customer satisfaction equates with continued revenue, a more pragmatic reason for mobilizing claims adjusters is economic.Carriers are in the risk business and therefore tend to be risk averse-and rightly so. Careful scrutiny should always be paid before deploying new technologies or making large IT expenditures.

ATLANTA--COUNTRY Insurance & Financial Services of Bloomington, Ill. announced today the closing of two transactions with Cotton States Insurance Group of Atlanta. Under the first transaction, Cotton States Life Insurance Company merged with a subsidiary of COUNTRY Life Insurance Company. In the second transaction, Cotton States Mutual Insurance Company pooled premiums and losses with those of the COUNTRY property/casualty group.

When it comes to IT spending this year in the insurance industry, it's déjà vu all over again. In general, industry analysts concur that U.S. insurance companies will increase IT spending only slightly this year-between 1% and 4%. Last year, they predicted cautious increases of 2.5% all the way up to 6.7%.Similarly, carriers' priorities for IT spending in 2005 will focus on projects that ranked high on the list last year as well. Namely, their attention will focus on IT projects with the potential to increase revenues by improving distribution and customer service, and those that cut costs by streamlining business processes and workflow. Also like last year, insurance executives remain resolute about making sure their technology investments align with business strategy. IT governance is key.

The challenges insurers face with handling paper documents have been well documented. Dealing with reams of paper is one thing. Coping within a manual and de-centralized content management scheme is another.The process of printing and mailing policies is both cumbersome and costly, as is storing policies in archived files. For some, retrieving older, existing policies is akin to finding a needle in a haystack.

SAN FRANCISCO--WorldGroup, a leading provider of flexible, component software solutions for the insurance industry, today announced that it has submitted a signed, definitive agreement to acquire Taliant Software, LLP. Established in 1992, Denver based Taliant has insurance software applications installed and in production use in insurers throughout both the United States and Canada.

INDIANAPOLIS--Anthem Blue Cross and Blue Shield customers can now enroll in their health care benefits through secure, online tools available at http://anthem.com . The new capabilities not only make enrolling fast and easy for employees and individuals, but allow employers to streamline their work, lower administrative costs, and save time, all in an effort to improve the ease of working with Anthem.

SPRINGFIELD, Mass.--The MassMutual Financial Group announced today that it has launched a new section of its consumer Web site that includes useful information about how financial products and services can help individuals prepare for life events and meet new life challenges. Called "Learn," the material is included on the "For Individuals" portion of massmutual.com, effective immediately.

ATLANTA--The practice of both outsourcing and offshoring has been rapidly rising and will therefore have a huge impact on the business world for years to come, according to a new report available from LOMA, entitled "Outsourcing and Offshoring: Challenges and Opportunities for Insurance Companies."

HARTFORD, Conn.--The Hartford Steam Boiler Inspection and Insurance Company (HSB) today announced it is offering to insurers identity recovery coverage that combines identity theft insurance with services that help victims restore their credit history and identity records.

MAYFIELD VILLAGE, Ohio--The Progressive group of companies, the third largest auto insurance group in the country based on premiums written, today announced the debut of its newest Web site, driveinsurance.com, highlighting the important role that independent agents and brokers play in Progressive's business model.

HARTFORD, Conn.--The paper application for Builders Risk coverage has gone the way of the thatched roof, replaced by electronic application submission, rating, quoting and binding from The

COLUMBUS, Ohio--Grange Insurance is introducing a new extranet Web site for its independent insurance agents featuring technology to streamline business processes. The site also offers comprehensive functionality that helps agents manage the sales process and their Grange policies. The new Web site, http://www.grangeagent.com , is being rolled out to Grange's 1,200 independent agencies.

PALO ALTO, CALIF--Corporate America's information architecture is replete with obsolete, redundant and unused software applications--so many, in fact, that maintaining them drains tens of billions of dollars per year from the most information-intensive companies alone. However, nearly three quarters of these companies have no process in place for retiring outmoded software and less than half conduct regular software audits to see how much software is on the network.