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Growing Up and Out

After experiencing rapid growth, First American P&C is taking advantage of current conditions to prepare for the soft market.

When business information provider First American Corp. (Santa Ana, Calif.) purchased P&C carrier Five Star Insurance in 1999, it faced the unfortunate reality that the name of its newly acquired property was far from indicative of the insurer's technological capability. Five Star lacked the systems scalability required to function once it became a part of First American, relates Jim Court, who serves as vice president and chief information officer of the company, now named First American Property and Casualty Insurance (more than $100 million in written premium).

Court-who was brought in to prepare Five Star's technological assets for the purchase-had his work cut out for him.

Leveling the Playing Field

"I was brought on board to play on an even playing field with the rest of [Five Star's] executive team," says Court. "I conducted a complete review of the systems that were in place and developed a plan for technology going forward." Court's assessment identified the necessity of policy and claims system replacements. After seeking the help of Fiserv SIS (Orange, Calif.), First American P&C decided to implement the vendor's Specialty Insurance System, which Court anticipated would take the carrier through its next 10 years of growth. (Editor's note: Read more about this implementation in Insurance & Technology's December 2003 issue.)

Five years later, the AS/400-based system is proving its worth, as the company has undergone dramatic financial and geographic growth. First American P&C-which wrote business in one state at the time of acquisition-currently writes business in California, Arizona, Nevada, Illinois and Oregon.

It has experienced an aggressive growth rate that has averaged about 10 percent each year. "We've grown from $12 million [in direct written premium] to $20 million, to $80 million, to in excess of $100 million," relates Court. "If you don't have a solid core infrastructure and reliable systems [while experiencing such rapid growth] you are asking for problems."

Unburdened by such problems today, the carrier is taking advantage of current market conditions, while attracting and supporting growth through the creation of its agent Web site, launched in May 2003. "We're not writing as much business as we could because of the hard market," relates Court. "Since we anticipate increased growth, we are taking steps to make sure that when the market changes we will be able to improve our distribution channels." The site, which enables policy and billing inquiry, leverages ACORD's (Pearl River, N.Y.) XML standard as well as a Microsoft (Redmond, Wash.) .NET front-end that is maintained by Minneapolis-based KBA Solutions. Court relates that the effectiveness of the site has exceeded First American P&C's expectations.

First American P&C "has experienced a 20 percent decrease in call center calls made [by producers] to customer service, while experiencing a 20 percent increase of our policies in force," boasts Court. "That is a wonderful validation [of the project]. We have been able to grow our business without having to increase our headcount."

First American P&C plans to cultivate the Web services resources even further, making them available through its Web site to its internal employees.

"The reuse factor with Web services is large," explains Court. "We plan on leveraging it to gain operational efficiencies with our intranet. We are going to use the same Web services that we relied on for the Web site, add a different presentation layer and serve it to our internal customer service staff."

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