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Insurance & Technology: The Blog« June 2007 | Main | August 2007 » July 31, 2007Chubb Impresses With CAT ResponseIf I've learned one thing in my first six months here at Insurance & Technology, it's that there is an excellent pizza place on 5th Avenue, just around the corner from my office. If I've learned two things though, the second, after pizza, would be that big-time insurers consider their catastrophe response efforts a top priority. Companies like Travelers, State Farm, Safeco and Farmers have all made news recently by innovating in the area, as they consider CAT response as place where they can establish competitive differentiation. After all, you can't underestimate the value of one neighbor -- frustrated by his insurance company's slow response to a claim -- looking over the fence at another neighbor that's insured by a competitor and has already been visited by a mobile technology-equipped claims adjuster and [possibly] issued a check on the spot. Leveraging Technology at Chubb Warren, N.J.-based Chubb Group of Insurance Companies ($14 billion in revenue, 2006) is the latest carrier to tout its CAT response capabilities. Last week, the insurer announced that 95-percent of its insurance customers affected by strong April storms in the Northeast United States were “very satisfied” with how their claims were handled, according to a survey. More than 29 percent of Chubb claimants from the April storms responded to the survey, which assessed promptness, service, claims submission ease, damage assessment satisfaction and settlement fairness. “The integration of our service center, field resources and preferred vendor networks enable us to quickly assess the level of expertise needed to assist the customer and engage resources that can help mitigate loss, minimize customer inconvenience and move forward with repair and restoration,” says William Turnbull, Chubb senior vice president, claims. Turnbull credits Chubb's two call centers, located in Chesapeake, Va. and Phoenix, Ariz., with jump-starting the response process by effectively handling the dramatic spikes in claims activity that accompany a catastrophe. When a catastrophe can be anticipated, a dedicated catastrophe manager helps ensure that Chubb-trained field adjusters are among the first on the scene by pre-positioning them just outside of areas likely to be affected. In the field, Turnbull says recent technology purchases are helping to mobilize adjusters and make them more efficient. New to Chubb field adjusters this year are GPS units and cellular modem cards. Approximately two years ago, the organization equipped its adjusters with pen tablet PCs. The company declined to discuss the specific vendors or products it uses. Previous to the tablet PCs, adjuster used laptops, which proved too cumbersome for catastrophe response situations. “Imagine walking around a loss site with a laptop,” Turnbull explains. “It's like walking around with an open pizza box. It's difficult to balance, measure a loss and enter data via the keyboard.” The laptops forced Chubb adjusters to operate in two worlds at once -- a electronic world for data entry and a paper-based world for diagrams and note taking. “The pen-based tablet PCs enable adjusters to electronically capture text, data, handwritten notes and diagrams by writing directly on the computer screen with an electronic pen. It further enables the utilization of software that takes advantage of the streamlined nature of drop down menus for easy point and click entry of information,” Turnbull says. At the end of the day, Turnbull says that the technology Chubb has deployed helps field adjusters process claims more efficiently, which in turn enhances the company's retention rates and creates new customer acquisition opportunities. And that brings me back to my original point: big insurers are making catastrophe response a priority, you need only to search the recent issues of I&T to find that to be true. Yet while there are many large insurers innovating in this space, regional carriers are making less noise. So, I guess I'm wondering if CAT response is less of a priority for smaller companies, because I don't think it's an issue of capability. Plymouth Rock Assurance, for instance, is a Boston-based auto insurer with $302 million in annual written premium with an impressive mobile claims operation. Checks are issued on the spot and appraisers can upload images and appraisals back to office-based adjusters in a matter of minutes. If Plymouth Rock can do that, then a similarly sized insurer that offers a wider array of P&C products should be able to compete with the big guys when it comes to CAT response. So why don't I hear about it? Maybe it's a matter of priorities. Or maybe I just need to spend more time looking for smaller carriers innovating in CAT response and less time at the pizza joint around the corner. Posted by Nathan Conz at 03:22 PM | Comments Spitzer SchadenfreudeCritics of Eliot Spitzer have had the pleasure of watching the former New York Attorney General and now Governor get a dose of his own medicine. Current New York Attorney general and fellow Democrat Andrew Cuomo found that Spitzer’s office misused state power to discredit political rival, Joseph L. Bruno, the Republican New York State Senate majority leader. As a result, the State Ethics Commission has begun a preliminary review of Spitzer’s administration. As the New York Times reports:
Many commentators have referred to the matter as evidence that Spitzer can no longer vaunt a “squeaky-clean” image, but most call attention to what they characterize as Spitzer’s cynical dealings on campaign-finance in which he allegedly “exchanged pork and pay raises” for desired legislation, along with a laundry list of questionable behavior, including sweet deals and sinecures for campaign sponsors in the real estate industry, in which the Spitzer family is a player. In some cases when a figure with the reputation of a reformer is seen to go bad, the narrative is one of goodness souring into corruption. But in the case of Spitzer, his most vehement critics see his actions as more of the same: an arrogant man, full of himself, above the limits placed on others, taking himself as his own exemplar, identifying his ego with his office(s) and blithely abusing power on the rationale that when he does it, it’s for the good. Spitzer, such critics might assert, could be adduced as Exhibit A in an American legal system where prosecutors are granted extraordinary powers to intimidate to a degree verging on blackmail, undermining the traditional protections of the accused under common law. By gaining the cooperation of the intimidated, decent people can be cast as criminal villains and careers can be destroyed, critics argue. Even if such maneuvers are done in the interest of the public good, such abuse of power is more sinister than much of the trimming and petty corruption it pretends to address. If it is done in small or great measure to advance the careers of prosecutors, it is perhaps more sinister still. Spitzer has been very effective intimidating his victims and potential victims to get results without necessarily uncovering any law breaking. In cases where his victims do gain some measure of vindication, it’s a case of too little too late, and it certainly doesn’t get the same media attention as the charges that soiled their reputations. Now, to some extent at least, the worm has turned, and it is Spitzer himself who is under scrutiny and subject to imputations that call his professional and personal character into question. Consider the following characterization in the deck of a piece in Investor’s Business Daily entitled “Richard Milhous Spitzer”: New York Gov. Eliot Spitzer and the one president ever forced to resign seem to have a lot in common. But at least Nixon waited a little while before using the tools of state against his political enemies. Now the onus is on Spitzer to demonstrate that he is as clean and virtuous as billed and not given to abuses of power limited only by the resources of the office he happens to hold. Posted by Anthony O'Donnell Posted by Anthony O'Donnell at 12:42 PM | Comments CFO Survey: Finance Transformation neededA changing industry is driving the transformation of the finance function within insurance companies and financial services in general, as companies seek to cut operating costs and improve revenue in an effort to achieve greater profitability and return on equity. But the proximate drivers of and key tools to achieve that transformation are technology related, according to a BearingPoint study. The McLean-Va.-based consultancy conducted a 2006 survey in collaboration with IDC (Bedford, Mass.) across various industries and geographies of 153 CFOs, approximately 25 percent of whom represented financial services companies. In 2007 BearingPoint separately surveyed 30 financial services CFOs. When asked to identify drivers finance organization transformation, 67 percent of financial service CFOs said demands for better information and insights to improve ROI. Fifty percent of those CFOs responded that new technology implementation enabling process improvement was driving transformation, and 47 percent said that the need to respond to high operating costs was a driver. The research also revealed that financial services CFOs found transformation more difficult because some of the “low-hanging” fruit of cost-cutting opportunities had already been harvested. Other impediments cited were lack of budget to pursue further cost-cutting initiatives; low morale and the risk of losing additional staff; and lack of personnel with the skills needed to identify new cost-cutting opportunities. Leveraging ERP In the face of those challenges, 70 percent of financial services CFO respondents identified the implementation of a single enterprise resource planning (ERP) system for finance as the most effective strategy for cost-improvement in the short run. Financial services CFOs, in contrast to their counterparts in other industries, also responded heavily in favor of more open and simpler application architecture, with 60 percent saying that service-oriented architecture (SOA) and XML are critical to their overall performance. ERP figured high among favored long-term solutions as well (78 percent), along with business process outsourcing (BPM). However, the top long-term strategy, identified by 82 percent of the respondents, was the implementation of consistent data definitions and technology standards. Historically the insurance finance function took a more purely administrative approach, focusing on the top line, according to McDonnell. “They assumed that if they got the revenue that everything else would follow,” he says. “Now they’re getting much more engaged in understanding profitability and trying to drive strategic decision making based on an understanding of the metrics of the business.” Insurers face the challenge that the means of generating vital financial information is scattered throughout the enterprise, according to McDonnell. “A lot of the calculations associated with the financials of a company are actually embedded in legacy policy administration systems,” he explains. “One of the things insurance companies are trying to do is extract the accounting rules out of these legacy systems and bring them into a centralized system.” Posted by Anthony O'Donnell at 09:31 AM | Comments July 30, 2007IronKey Offers Secure USB Flash DriveLOS ALTOS, CALIF. - IRONKEY has launched the IronKey Secure Flash Drive with Internet Protection Services, a secure USB flash drive that protects the gigabytes of information stored within it using onboard hardware encryption, helping insurers and other organizations meet regulatory requirements such as Sarbanes-Oxley and HIPAA. IronKey also features portable secure web surfing via an onboard Firefox web browser with Tor technology, a tamperproof and waterproof metal casing and password management and recovery capabilities. Posted by Nathan Conz at 05:00 PM | Comments July 27, 2007DTRIC Leverages DRC DecisionMakerDTRIC Insurance Company (Honolulu) has selected Honolulu-based DRC's DecisionMaker extended lines policy administration system to process its newly expanded commercial insurance lines of business. Posted by Nathan Conz at 02:53 PM | Comments Workforce Safety & Insurance (WSI) Selects Valley OakWorkforce Safety & Insurance (Bismarck, N.D.), the exclusive workers' compensation carrier in North Dakota, has selected San Ramon, Calif.-based Valley Oak Systems' flagship iVOS solution as its new workers' compensation system. Posted by Nathan Conz at 02:45 PM | Comments Dean Health Signs With EDSDean Health Insurance (Madison, Wis.) will implement Plano, Texas-based EDS' MetaVance Adminstration and Finance System, a highly scalable system featuring a service-oriented architecture that is designed to automate core administrative processes such as enrollment, provider management and claims processing. Posted by Nathan Conz at 01:55 PM | Comments Primavera 6.0 ReleasedBala Cynwyd, Pa. - Primavera Systems has released Primavera 6.0 (P6), a new version of its flagship enterprise project and program management software. Part of a solutions suite for project-driven organizations, P6 will feature fully web-based capabilities, interactive Gantt charts and screen layouts, dashboards, advanced management capabilities, extended reporting and analytics, enterprise integration with SAP and risk management capabilities from Primavera PertMaster v8, another recently released solution. Posted by Nathan Conz at 01:53 PM | Comments Hyland and Sapiens PartnerHyland Software (Cleveland) has announced it will partner with Sapiens International (Research Triangle Park, N.C.) to provide insurance clients with tighter integration between Sapiens INSIGHT, a Web-based insurance administration suite and Hyland's OnBase ECM software suite. Posted by Nathan Conz at 01:38 PM | Comments July 26, 2007Phoenix Indemnity Selects TEAM-UPPhoenix Indemnity Insurance Company (Dallas) will license and implement Connective Technologies' (Houston) TEAM-UP Download application to provide once-and-done processing in an industry-compliant, data-secure environment for agency downloads. Posted by Nathan Conz at 04:56 PM | Comments July 25, 2007The Missing OpinionThe other day I received an e-mail invite to a webinar, "SOA & the Insurance Industry: Voice of the Experts." The event was organized by InfoWorld, and included speakers from the TowerGroup, BEA, and Zurich Financial Services. Naturally, my interest was piqued. I watched the webinar, and there was a lot of good information. I noticed there was someone missing from the discussion. I have been working in the financial services industry for twenty-two years, and the biggest challenge has been involving business users. We do not hear enough from the business user. If you do a search for SOA and insurance on the web, you will find plenty of articles and presentations by information technology people. You will be hard-pressed to find anything by the business user. A policy administration system is the heart of an insurance company. It is much more than connecting some services or being a presence on the web. It is the embodiment of a set of business rules and processes. What makes a successful SOA project is the connection between business users and information technology users, not the way the services are connected. - By Howard E. Kennedy Posted by Howard Kennedy at 02:12 PM | Comments July 24, 2007Does Ergonomics Matter?By Nathan Conz Because I'm Insurance & Technology's "new products czar" (a title-bump that will be news to my editors when they read this entry), a lot of technology solutions come across my desk every day. Until very recently however, none of those products were also, in fact, about my desk. That all changed recently when I was briefed on the offerings of WorkRite Ergonomics (Petaluma, Calif.), a provider of height-adjustable and otherwise reconfigurable work stations -- a science known to lowly cubicle-dwelling associate editors like myself as "servant-oriented architecture." Here's some research findings the company forwarded to me, some of it conducted by the company, some of it by an independent firm:
You can feel free to be skeptical of ergonomics research conducted in part by an ergonomics solutions company, but if you've ever slaved over a keyboard all day, you know there's at least some truth to it. And, take it from a guy who spent two years in a chair literally held together by old newspapers and duct tape at his previous employer, higher quality workstations can make a big difference regarding workplace culture and morale. Putting all that aside though, the only thing that matters is what you -- the I&T readers, with buying power and decision-making ability at your respective insurance organizations -- think. How do you view "workstation technology?" Is it a waste of time and money, or a simple way to improve the quality of life for your employees while they're at work? Is it a purchase that'd be difficult to justify to the business? And, most importantly, have I asked too many questions at the end of this post? Posted by Nathan Conz at 05:53 PM | Comments July 17, 2007CSE Insurance Group Selects ISO HomeValue Cost EstimatorLooking to update its cost estimator platform while it builds new business quoting software, Civil Service Employees (CSE) Insurance Group ($126.1 million in gross written premium) selected ISO HomeValue to help agents estimate the costs to re-build a property in the event of a total loss. “We expected to modernize the replacement [cost estimator] software along with the quoting system,” says Keenan Wong, an underwriting project supervisor at CSE who oversaw the testing of different solutions and ultimately recommended ISO HomeValue to upper management. “A key benefit of ISO HomeValue is that it is web-based. The software can be made available to different parties very quickly, which was important because our agency force is comprised of independent agents.” According to Wong, CSE began the selection process in the spring of 2006 and chose ISO HomeValue in August of that year. The new solution went live in October on an interim basis and then was officially implemented in January 2007. “We wanted to ease our agents into it,” explains Wong. “We didn't want to say, 'effective this date, you can no longer use the old software' without giving agents the opportunity to adjust. So, we gave the agents several months of lead time before we turned off the old cost estimator.” The San Francisco-based insurer's previous estimator software required the company to send updates to its agents in the form of CDs and diskettes. “[Now] we're able to have the most up-to-date software available to agents online without requiring them to update their estimators with disks mailed by CSE.” The old system also struggled to provide accurate cost estimations for high-value homes. “Before, we had to use two different programs, one for average homes and one for high value,” Wong says, “ISO HomeValue's replacement costs are very comparable to the old system. however, the software can accurately run replacement costs for both average and high valued homes through one program.” After contracts were signed, Wong says the implementation took three weeks. Agents could then access the solution directly from CSE's online agent portal. Wong says the agents particular enjoy a “pushpin database” that automatically populates tax and title information when available online through government sources. Going forward, CSE plans to further reduce the data input required of agents by integrating ISO HomeValue with the new business software it is developing. “At some point, we intend to have our new business system automatically transfer information to the cost estimator in order to minimize the amount of manual input involved for the agents,” he says. Posted by Nathan Conz at 03:57 PM | Comments Summer of Change at MetLife, State Farm, The HartfordBefore the industrial revolution, summer tended to be the time for campaigning -- the military kind, not the political kind which now lasts multiple years, let alone seasons -- and intense agricultural activity. No doubt the farmers are still on a more demanding schedule this time of year, but when it comes to the insurance industry, summer is a time of relative repose. It doesn’t rival the last couple of weeks in the year for quiet, but with the spring trade show cycle past and vacations depleting staff, it’s a close second. That’s not to say the summer isn’t a good time to pick up some insurance technology-related activities. Last year we saw a rash of M&A activity among industry vendors, and we may yet see a smaller spike before the autumnal equinox. This year we’ve seen some shifts in leadership at some of the bigger carriers. MetLife’s Jeff Stoll has retired from his Individual Business CIO role to be replaced by Larry Blakeman, who formerly held the CIO job for MetLife Auto & Home, the carrier’s personal lines P&C division. Blakeman has been replaced in turn by Rich Calogero. A recent e-mail exchange with State Farm's Dick Shellito resulted in his informing me that he had stepped down as CIO. My media relations contact Dick Luedke explained the shift. "Dick Shellito has taken on a new role involving integrated business strategies over a wider area of our company than just IT," he said. "Mark Oakley will now head up the IT area." Replacing Ken Auman, who retired earlier this year, Gary Plotkin has become CIO of The Hartford’s P&C company. Plotkin sees his new role as a progression from his last, as expressed during a phone conversation with Insurance & Technology yesterday. “As the CTO, responsible for infrastructure, architecture and support functions over the last two-and-a-half years, I’ve been able to develop a solid foundation as well as an overall architectural strategy and delivery the bulk of the components of that strategy,” he said. “Now as CIO I can help to deliver against those, to take a lot of that strategy work and actually move it into implementation and align it with the business’ vision in an early fashion.” Posted by Anthony O'Donnell Posted by Anthony O'Donnell at 03:28 PM | Comments The Evolution of Personal Health RecordsI shattered my right pinky finger a year ago last March in an ice hockey game and the most difficult part of the whole ordeal -- well, aside from the surgery that reconnected the appendage and the subsequent metal pins protruding just above my knuckles -- was trying to coordinate communications between my hand surgeon and my physical therapist. Despite having offices on the same floor of the same building, collaboration was severely lacking. When it came to designing casts and splints or setting therapy timetables, the two always had differing opinions. One never knew what the other was doing. And I wasn't much help, jumbling and confusing bits of information they had communicated to me. I'm currently working on a news analysis story for an upcoming issue of Insurance & Technology on personal health records (PHRs), and whenever I sit down to interview a source for the story, I can't help but think back to my poor, and now slightly deranged, pinky finger: How would treatment have been improved had a web-based record been available? And I've come to this conclusion: Right now, PHRs can be sources for competitive differentiation for a health insurer by aggregating data from different sources such as surgical centers, hospitals, insurance claims and primary care providers and then presenting it an easy accessible way. However, the real value will come when the industry settles on a basic set of standards, making it possible for individuals to bring their PHR with them when switching health plans and/or networks, maximizing savings by reducing medical errors and redundancies. Rich Gunza, executive director for the Dayton Region at Anthem Blue Cross Blue Shield, says that PHRs are an evolutionary cut above more traditional electronic health records. Anthem recently launched the Individual Health Record (IHR) program in Dayton. “If you look at an electronic medical record, those are primarily in a doctor's office, but it stays within those four walls. It's a stand-alone record,” Gunza explains. “The individual health record looks more like a bicycle wheel with a hub and spoke. It's a collector of different pieces of medical information. What an IHR does that's different is it takes those very technical pieces of information and synthesizes it. It takes those thousands of pieces of information, extracts what's important and makes it available for the physician and patient to use.” Anthem's IHR initiative and many similar projects from other organizations are good news for consumers looking for more efficient and less complex health care. However, the surge in separate PHR projects can also be viewed as stumbling towards the end goal -- a unified digital health grid that transcends a particular hospital network or healthplan. After all, what good is a robust and easy-to-use PHR if a consumer can't take it with them if they switch jobs and thus switch health insurers? Gunza, for one, says that it's yet to be determined how things will play out. He compares the current state of things to the VHS vs. BetaMax and HD-DVD vs. BluRay video format wars. “There are a lot of different methods out there that are being developed and that are, frankly, competing for the same end game, which is how do you provide a member or a patient with easy to use, practical information for them and their doctor?” Gunza says. InformationWeek Editor-in-Chief Rob Preston touched on this recently when he wrote about the challenges and complexities of setting up a digital health care grid, urging all the players involved to get down to business. Preston's piece points to a journal study that questions the effectiveness of e-health records and an e-health record collaboration (involving Wal-MART and other big name companies) that is currently on shaky ground. Still, Preston comes to the same conclusion I did after staring at my right pinky finger: “It's almost embarrassing to still have to argue that medical e-records are critical. They eliminate prescription errors caused by illegible handwriting; they make it easier to follow a patient's care over time; they alert doctors and pharmacists to dangerous drug combinations; they keep doctors apprised of new tests, treatments, and drugs; they put more information at the fingertips of patients; and they reduce costs, just as the conversion of any supply chain process from paper to digital does. Get on with it.” Posted by Nathan Conz at 01:09 PM | Comments July 16, 2007Vector Acquisition Deepens MajescoMastek's American FootprintThe announcement on July 17th that MajescoMastek has acquired Vector Insurance Services is further evidence that the Indian parent company Mastek is working hard to find a place at the North American insurance technology vendor table. Late last year MajescoMastek announced the appointment of Billy McCarter as president of the Edison, N.J.-based company. The former Fireman’s Fund CIO — and Insurance & Technology Elite 8 honoree — had most recently been front man for Torrance, Calif.-based ePolicy solutions (acquired in July 2006 by ChoicePoint and then folded into the Insurity brand). McCarter took the MajescoMastek show on the road to the ACORD/LOMA Insurance Systems Forum in Orlando. There he expressed the belief that MajescoMastek would benefit from having an American front man. With the Vector acquisition, MajescoMastek gains even more local expertise, targeted to the life & annuities sector. Vector provides policy acquisition, administration and processing solutions to North American carriers, counting several of the region’s largest L&A carriers as its clients, according to a MajescoMastek source. The acquisition complements MajescoMastek's existing L&A capabilities, which include its Elixir policy admin platform. Posted by Anthony O'Donnell at 12:07 PM | Comments July 11, 2007MetLife Names Blakeman Individual Business CIOLarry Blakeman has moved from being CIO of MetLife Auto & Home to the CIO role for the carrier's Individual Business division, in the wake of former Individual Business CIO Jeff Stoll's retirement. Blakeman comes to his new role after a diverse technology leadership at MetLife. Before leaving his Auto & Home CIO role, he had taken on responsibility for MetLife's enterprise data management and enterprise architecture functions, and previous roles include responsibility for the carrier's corporate actuarial systems and enterprise reporting group, as well as enterprise wide financial systems and financial systems for both Individual Business and Institutional Business. Blakeman characterizes his experience at MetLife as "a good balance between the back-office systems - the financial and corporate areas where I started - and the sales side and front-end of the business." He adds that, being out in the line of business [at Auto & Home] with P&L responsibility was a great learning experience, and one that positions me well for being CIO of our Individual Business." Posted by Anthony O'Donnell at 03:22 PM | Comments MetLife's Jeff Stoll RetiresJeff Stoll has retired from his job as CIO of Individual Business (IB) at MetLife. Larry Blakeman has moved from his role as CIO of MetLife Auto & Home to take on the IB CIO job. In a phone conversation Stoll said that he was tired and that it was time for a change, so he decided to take some personal time. Stoll has certainly earned a rest. Before becoming IB CIO, Stoll drove MetLife’s massive ProjectLESS consolidation effort that eliminated 53 legacy systems. As IB CIO, he played a critical role in MetLife’s rapid integration of Travelers’ systems, which must rank as one of the great M&A technology achievements of recent time. These and other accomplishments influenced Stoll’s being elected one of I&T’s Elite 8 for 2006. Stoll told us that he looks forward to the coming days, “with a smile on my face!” He says that currently he has no plans to re-enter the insurance technology fray and that it’s at least as much a question of “if” as “when” he will return. No doubt he’s earned a permanent break, but it’s hard to imagine a man of such drive staying out of the game. Stoll is energetic even in his pleasures, which include whitewater rafting down the likes of Oregon’s Rogue River and fishing for billfish off the Central American coast. Maybe he’ll stay retired. For a while. After reflecting, toward the end of our conversation, on the pleasures that await him on his more relaxed schedule, he said, “let me know if you hear about anything…” Posted by Anthony O'Donnell Posted by Anthony O'Donnell at 10:49 AM | Comments July 03, 2007London & Glasgow: The World Gets RiskierWith every risk comes an opportunity for the insurance industry, which is another way of saying it’s an ill wind that blows nobody any good. That’s small recompense for living in a world where cruel fanatics are increasingly driven to attack civilians – men, women and children – for the sake of their perverse beliefs. The failed bombing attempt in London and the not-very-successful attack on Glasgow Airport brought home that sad truth once again. The bell may toll for us all whenever atrocities are committed, but as with the World Trade Center attack, the latest round struck closer home. I was based in New York in September 2001, and my boss Kathy Burger was actually in the basement of the North Tower of the World Trade Center when the first plane struck. The three cities that have been most central in my life have been London, Glasgow and New York. I was born near the first, and as the son of parents from the West of Scotland, I have spent a great deal of time in the second, including many trips through the airport. I traveled between the U.S. and the U.K. quite a lot in my early adulthood, and back in those days I remember getting perhaps a little more attention than my fellow passengers because (I speculated) of the combination of my Irish surname, British passport and American residence. Youth, attire and tonsorial factors probably played a role. If indeed I was profiled, rather than be offended I was rather grateful that the security people would take the trouble when so much was at stake. My fear, as I walked down the streets of New York or through the Port Authority in the wake of September 11, was that we would see low-level atrocities like those committed by the IRA in Britain and elsewhere. Such attacks never materialized, thank goodness. But now we’ve seen several attacks in the U.K. that might be so described. One hopes that the attacks might lead to the means of preventing future ones, both in Britain and abroad. For the time being there is much speculation and little clarity as to the correct interpretation of the attacks as to how they bear on the future. However, there is abundant clarity in the comparison of those who commit these attacks and those who endure them. The difference is stark between, on the one hand, a culture that takes tremendous pains to avoid harm to civilians during warfare and, on the other hand, a culture that seeks to maximize harm to civilians. To my original point, the creation of a business opportunity out of sadistic attacks against people and property may be cold comfort but it presents, perhaps, another contrast between the civilization of the jihadists’ targets and the barbarism of the jihadists themselves. By Anthony O'Donnell Posted by Anthony O'Donnell at 02:30 PM | Comments Deloitte Study Highlights Offshoring Boom in Financial ServicesFinancial services companies have expanded offshore delivery functions 18-fold over the last four years, according to a recently released report for Deloitte Touche Tohmatsu. Yet while the insurance industry is in-step with its FS brethren in some areas of offshoring, in others it still lags behind, says the author of the report. With regard to offshore IT capabilities, insurance stands alongside the best practices found elsewhere in financial services, says Chris Gentle, a London-based associate partner at Deloitte and the report's lead author. “However, insurance does typically lag behind in other areas such as business process, finance, accounting, HR and, to an extent, call centers,” Gentle relates. “We find that insurers are particularly behind retail banks and investment banks, who have been leading the charge.” And it's quite a big charge. According to the report (Global Financial Services Offshoring Report 2007), more than 75 percent of major financial institutions have offshore operations, compared to less than ten percent in 2001. Further, the average number of staff employed offshore by a given company has increased from 150 to 2,700 over the last four years. The report estimates that the financial services industry presently saves $9 billion a year thanks to offshoring. “The acceleration is extremely significant,” Gentle says. “An 18-fold increase over four years is quite an incredible shift within the industry and it's changing the very basis of competition within financial services. It should very much be at the top of insurers' strategic agendas going forward.” The report identifies three stages of development-build, optimize and release--with regard to a company's offshoring operations, with the first stage focused largely on labor arbitrage and the latter two focused on increasing scale and scope and capturing full value, respectively. “Nearly all insurance companies find themselves in the build phase, and we see most of the industry now on the cusp of the optimize phase. [Insurers] haven't moved into the optimize phase and that is where you really release significant value by re-engineering processes on a worldwide basis,” Gentle says. One key for an insurance company, or any organization looking to leverage the full benefits of offshoring, is avoiding a “champagne moment,” Gentle suggests, referring to the proclivity of business leaders and board members to cease their interest in offshore operations after the initial set up. “There's a tendency to fly the board out to India, do the tour and have the champagne. Then everybody gets back on the plane and, to some extent, forgets about what's going on with offshore capabilities,” Gentle explains. “The champagne moment is really about not having an effective long term strategy.” While Gentle does point out that there are short-term benefits to be had, he also says there's a correlation between companies that have increased the scale and scope of offshore capabilities and companies that have been the most successful. Continued company involvement in offshore operations, post-champagne toast, can only help efforts to achieve similar success. Other best practices include making sure there is good clarity regarding which functions will and will not be moved offshore and assigning one executive with the responsibility and accountability for offshore operations across the enterprise. By Nathan Conz Posted by Nathan Conz at 01:24 PM | Comments Delta Delivers Web-Based Self-Service ReportsAs part of its strategic effort to distinguish itself in the extremely competitive Chicago market through Web-oriented customer service, Delta Dental of Illinois (DDIL, Lisle, Ill.; about $400 million in premium) has launched self-service reports to group benefit administrator users of its employer portal. The Business Objects XI application gives users the ability to download reports and access real-time information in a variety of presentations, eliminating time-consuming requests for special reports. Delta Dental of Illinois has traditionally delivered monthly performance reports to its clients, but benefit administrators commonly request information not included in standard reports, according to Ross Gosnell, CIO, DDIL. The procedure for requesting non-standard reports began with the benefit administrator writing specifications and contacting the client’s DDIL account executive. The account executive would then write a request to IT, IT would deliver the report to the account executive, who would in turn deliver it to the benefits administrator. "There is security involved in that process because you’re transferring protected health information in many cases, so there’s a whole drawn-out process that takes, in the best case, several days," Gosnell explains. With the carrier’s new self-service function, however, benefit administrator users of DDIL’s employer portal can receive specially requested reports in as little as an hour. DDIL rolled out the reports self-service capability in April, having completed the application last fall and piloted it with selected customers. The parameter-driven reports allow authorized users to shape delivery of data according to different organizational or time parameters. For example, users can request reports of month- or year-to-date, or one quarter compared to another. "What this gives them is the ability to mine their data, based on their criteria and their log-in," Gosnell says. "They can change reporting periods on the fly, they can look at multiple divisions and they have the ability to drill-down and look at real-time data—they can actually run a report in real time and see how much money they’re spending on dental claims, how many of their subscribers have gone to the dentist that month." The drill-down capability means that a single online report can equate to four different reports—and report request processes—in a paper-driven environment. Users can download the reports directly from the portal in PDF, Excel or comma-separated files. The reports are created through interaction of the Business Objects XI business intelligence platform with the carrier’s Oracle 9i database. "We have a strategic plan to provide information across the enterprise to end users, knowledge workers and external stakeholders using the Business Objects XI platform," says Gosnell. DDIL originally invested about $100,000 in the Business Objects platform over two years ago and has expanded the relationship since then, Gosnell reports. The implementation of the self-service reporting capability included the development of a single sign-on capability that took about six weeks to develop. --By Anthony O'Donnell Posted by Anthony O'Donnell at 01:11 PM | Comments
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WHITEPAPER Insurance 2020: Now what? In todayÕs competitive insurance industry, the challenges are many and there is much uncertainty.To survive and thrive, insurers must seek new models and strategic success that enable innovation and increase profitability. |
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