Shayne Dobbins & Bob Long

Hawaii Employers

Mutual Insurance

Operating as a team, Shayne Dobbins and Bob Long run the ITdepartment at Hawaii Employers Mutual Insurance Company (HEMIC).Theyve worked together for years, and are certainly friendlyenough, but dont share an office. Thats because Bob works in thecompany office in Honolulu and Dobbins works remotely from homein asuburb of Atlanta six time zones away. Its a long story.

HEMIC was started as a competitive state funda market of lastresort, but competing with other workers compensation writersbasedon legislation passed in Hawaii in 1996; it started operations in1997. During the organization phase, the president, Bob Dove, hiredDobbinsa 20-year insurance veteranto be vice president ofunderwriting services, and the job evolved into CIO. Dobbins hiredBob Long two years later, to be responsible for networkoperations.

One of Dobbinss first decisions was to choose Tropics SoftwareTechnologies (www.gotropics.com) for the companyspolicy processing system. When it contracted with Tropics in June1997, the company had no offices yetno hardware, nothing. It wentlive on July 10, slightly more than a month later, and hasnt sloweddown since. Its still using Tropics, and expanding with it.

HEMIC writes workers compensation only, and only in Hawaii. Itscurrently writing $32 million of premiumroughly 3,800policiesthrough 70 or so agents, which is virtually the entireagency force in the Hawaiian Islands. Founded with a reliance ontechnology as one of its core values, the 40-person companyoperates with only Dobbins, Long, and one trainee as the entire ITstaff.

The Tropics system is the first of two major applications itruns. Using an Oracle database and running on its Windows 2000network, HEMIC has kept up with its growth without problems. Itscurrently testing WebTropics, which should be live by the time youread this, and which allows both policyholders and agents to haveaccess to policy information, claims summaries, premium paymentinformation, etc., all via the Web.

Recently HEMIC added ImageRight (www.imageright.com) imaging anddocument management as its other main application, which itinstalled initially for claims, underwriting, and premium audit.HEMIC installed a high-speed Kodak 3500 scanner, which can scan thefront and back of documents at 60 documents per minute. Using tempssix days per week, HEMIC scanned all its documents in less than sixmonthsand then shredded all the paper. Today, everyone uses theimaging system.

In mid-2001, Dobbins needed to move to Atlanta for familyreasons. By this time, he and Long had evolved into a team, withDobbins doing the software and database work and Long doing thenetwork and hardware work. So HEMIC formally set up new jobdescriptions, with Dobbins as director of IS and Long as directorof network services. Using Citrix software to dial in, andteleconferencing for meetings, Dobbins is able to handle virtuallyall his job responsibilities remotely. Long pitches in for thethings Dobbins cant do, like physically loading software onto thenetwork.

Telecommuting via Citrix is working so well that the company isnow expanding it to their claims and premium auditorsobviouscandidates to work from home, of course. Theyre all located inHawaii, thoughone mainlander is enough.

Riki J. Fujitani

Island Insurance

Island Insurance is a minority-owned insurance company, locatedin downtown Honolulu. Started by a Japanese immigrant more than 70years ago to write insurance for the under-served Asian communityin Hawaii, the company has grown to an $80 million carrier, stillserving that market. It writes only in the Hawaiian Islands, andabout 60 percent of its business is personal lines. It tries towrite whatever their customers need, so the remaining 40 percentincludes commercial property, liability, workers comp, commercialauto, bonds, and related coverages. It writes exclusively through39 independent insurance agencies, eight of which provide the bulkof their business.

Riki Fujitani is vice president of information technology, withslightly fewer than 30 of the companys 250 employees reporting tohim. He didnt get to this position the way you would expect; aftergraduating from UC Berkley with a degree in electrical engineering,he worked for TRW for a while, then went to the business school atUCLA, then worked for IBM for more than five years. He then got alaw degree from the University of Hawaii, and was in privatepractice for three years.

On one particular case, he was on the opposing counsel team of acomplex Hawaiian land trust case, and got to know the man who wouldbecome the CEO of Island Insurance. In 1999, that CEO broughtFujitani on board to improve the claims operation. When the companydid a management reorganization, Fujitani was asked to run the ITdepartment.

Island had been a PMSC customer. Just before Fujitani got there,with its PMSC contract approaching renewal, the company negotiateda 10-year business outsourcing contract with Inspire (www.nspr.com). As part of the deal,Inspire set up a large data center and call center in the Islandhome office, with the intent of leveraging these investments togain a bigger presence in the state.

In the third quarter of 2000, Island and Inspire realized theirdeal wasnt strategic to either of them, and mutually agreed tocancel the contract. That left Island with an unusually largeamount of hardware, a beta version of software, and short timeframe to decide whether to renew or pull the plug on the PMSCsystem.

After a short evaluation of other software vendors, it decidedto finish the project, using Inspires client-server software thatit now owned. The job was given to Align 360, a consulting companywith a significant insurance implementation practice. With somehelp from key Inspire people, and a tight time frame with no roomfor error, Fujitani says Align 360 met every deadline, bringing thesystem live exactly on time. It was operational on the insuranceside, but had a large data center and a sophisticated 60-seat callcenter left over.

In order to leverage these facilities, and as an inducement tohelp hire scarce IT talent, the technology division of IslandInsurance was set up as a separate corporation, with Fujitani asthe president and a mandate to go get outside business. Hoike.Net(it means information in Hawaiian) has Island Insurance as its mainclient, of course, but is alreadysuccessfullypursuing otherbusiness accounts. It turned the call center into a co-locationfacility, using 10 of the seats itself and signing up a local bankfor ten more. It still has 40 seats left to rent, but the bankalone helps to cover the ongoing costs. Its already won some localgovernment contracts for the data center, as well, but it has yetto sign up any competing insurance companies due to the competitivenature of the local insurance market.

Meanwhile, Islands back-office system is now live, withend-to-end processing for its personal lines business, and theback-end processing for commercial. Its still using local vendorICE Systems for the front-end rating and policy issuance ofcommercial lines. With the rush of user testing and implementationover, IT is going to focus on its newer, out-facing businessopportunities for a while, and let the insurance side get back toprocessing insurance.