Dennis Faggioni
Scottsdale InsuranceCompany
His goal was to use technology
to do better for the companys agents and brokers.

In most insurance transactions, the customer deals with aninsurance agent who in turn deals with one or more insurancecompanies. There is no middleman between the agent and carrier.There is a separate market strata, however, for providingspecialized coverages that standard carriers often dont write. Thispart of the business uses wholesalersMGAs, MGUs, program managers,and the ones who deal in the largest and hardest accounts, E&Sbrokers. These wholesalers usually work with insurance carriersdevoted to this particular marketplace, and Scottsdale InsuranceCompany is one of the larger E&S insurers.

A unique attribute of this marketplace is that the wholesalersusually have the pen and actually issue the policies. Carriers arestill responsible for developing and filing the rates, rules, andforms (and the compliance issues related to them), but normallydont do the policy issuance. But if a wholesaler can write formultiple carriers, and is doing its own issuance, how does acompany like Scottsdale differentiate itself from itscompetitors?

As far as Dennis Faggioni, vice president of information systemsservices is concerned, theres a simple answer: Use technology toprovide superior service to Scottsdales direct customersthe MGAs,E&S brokers, and particularly its underwriters who actually dothe policy placement. And hes doing it.

Faggioni has been in the IT business his entire career, mostlywith technology companies, including two tours of duty with IBM. AtScottsdale Insurance, hes responsible for 150 of the companys 1,100employees (all at its one location, a beautiful complex ofbuildings in Scottsdale, Ariz.). Scottsdale has the same legacysystems, more or less, that its competitors have. Its obvious,though, that Faggionis focus is on the things the company is doingto support its wholesaler customers.

Scottsdale has undertaken a three-phase approach, which is wellunder way and already producing benefits for both the insurer andits wholesalers. The first phase is to improve the way itdistributes static documentation. This includes things like ratepages, forms (both paper and image; the company supports the threemain wholesaler policy processing systems), underwriting manuals,and the like. It now makes these available in a password-protectedarea of its Web site, speeding delivery and cutting printing andmailing costs.

The second part is the delivery of business information to itsagents. (Scottsdale refers to its wholesalers as agents, meaninggeneral agents and managing general agents, not retail agents.) Itdelivers near-real-time reports such as loss runs, claim statusreports, production reports, and so forth. Its on track to deliverover 300,000 reports electronically this yearan amazing number,considering the small number of agents it deals with.

The third phase, scheduled for late this year, is to offeronline rating/quoting/issuance capabilities for those agents whowant to avail themselves of itand the significant cost savings itwill provide them.

Scottsdale works closely with its distribution forcethe agencyprincipals and especially the agency underwriters and CSRs. It hasan agency advisory council consisting of nine key individuals whoserve two-year terms. The company regularly invites agencyunderwriters to its offices for in-depth meetings, to make sureScottsdale is providing what they need.

Does Faggioni like being in the insurance business? As he putitafter a minutes thoughtThe exciting thing about what were doinghere is using tried-and-true IT techniques to move high impact,high value technology into a business thats traditionally beenhigh-touch. Definitely a customer-focused individual.

Rory Read
ICW Group
By tying the companys legacy database to the Web, he streamlinedand modernized the rating process.

Rory Read, senior vice president of information systems at ICWGroup, is one of those guys who has spent his entire IT career inthe insurance industry. Almost all of it, anyway.

Read started with Allstate in 1969, working in the Northbrook,Ill., home office until 1980. He spent two years at a startup,Bankers Multiple Line Insurance, a subsidiary of Bankers Life &Casualty, where the data center was in a converted bowling alley.(You can imagine the insider jokes that must have gone around.) Healso spent another two years at PMSC (now CSC) in Columbia, S.C. Hewas doing some consulting work at a carrier in Northern Californiain 1986 when the opportunity at ICW came up, and hes been thereever since.

Ernest Rady started it in 1972, and ICW Group remains privatelyheld today. As such, its always been able to move a little fasterand be a little more nimble than some of its more traditional,larger competitors. Today, there are three companies in the group.Insurance Company of the West is the flagship company, writingmostly workers compensation, commercial property and casualty, DIC,and surety policies. Explorer Insurance Company is primarily anauto carrier, accounting for most of ICWs 3,300 agencyappointments; it also writes lender-affiliated homeowners businessthrough an MGA. Independence Property & Casualty is its thirdcarrier. Flexibility is the key to what ICW is all about, Readsays, of the different ICW operations.

For a $250 million premium company, Read and his staff of 40have more and varied operations to support than similar-sizedspecialty companies have. ICW Group has 650 employees spread among19 locationsit tries to stay close to its agentsbut all the IToperations are centralized in its San Diego home office.

Like many other carriers, ICWs primary system is a legacysystem; in this case its an older Series 2 PMSC system. Its got awhole bunch of other systems that tie into the Series 2 for onefunction or another. For example, the company uses InsuritysGen-A-Rate system for commercial P&C, and an in-house developedsystem for workers comp rating; it feeds PMSC for policy issuanceand data storage. In all, Read says ICW has more than 90 systemsand sub-systems, and one of his current goals is to reduce thatcomplexity.

What Read and his team have done thats particularly impressive,and shows an innate understanding of and appreciation for itsagents, is implement its Web-based Scout system for personal auto.Its significantly different from the common,enter-everything-our-way sites that so many companies have. Hereshow it works:

In the real world, personal-auto insurance agents (and theirCSRs) do all their work in comparative auto rating programs. Newbusiness is entered there first, and transferred to an agencymanagement system (if the agency has one) only when the account iswritten. Thats why agency management system vendors like AMS,Applied, and Doris always build bridges to those systems.

In Explorers primary state, California, Fiserv FSC is theprincipal comparative rater, and CCI and QuickQuote are the largestin its other big states. Reads team has worked with each of thesevendors to build a file-export function in the rating engine, and amatching file-import function in the Scout system, so all theinformation gets moved into the Web system without duplicates. Verysmart. The CSR only has to enter non-rating information, such aslien holders. ICW is working with ZapApp now, which will tie intosome other rating vendors.

Since its core PMSC system is simply storing information in VSAMfiles, ICW built a matching SQL database to which it exports dataat night, allowing it to run management reports moreefficiently.

Read says that supporting the varied ICW Group operations hasleft his team with a more complex system structure than hed like.My current goals, he says, are to simplify and consolidate some ofour systems, and also to upgrade our technology.