Hardware
Hard-Earned Hardware Savings
Fixing25,000 PCs and laptops a year proves worthwhile for State Farmssupport unit.

Is there anything more helpless in todays office environmentthan an employee sitting in front of a PC with a blank screen? Thehelp desk has been called, but that doesnt mean anyone will be byto fix it today. And if anyone does come by, the problem better bea software glitch, because if its in the box, someones going tohave to scrounge through the storage room to find the employeesomething to work with until the outside contractor can get itfixed. Man against machine usually finds machine with the earlylead.

State Farm Insurance had a crazy idea some 13 years ago. Itdecided to try repairing its electronic and computer equipmentin-house. The primary objective was a lower-cost method to repairthe equipment, but a key driver was by doing it in-house we had anopportunity to turn that equipment around faster than if we hadsent it out, says Steve Malinowski, superintendent of State Farmselectronics support unit (ESU).

Seventy members strong, the ESU has proven its worth over thelast decade-plus. In 2001, the unit repaired more than 25,000desktop and laptop computers, saving State Farm over $40 million inrepair costs, according to Malinowski. State Farm just looks at thefact that with the economy of scale we have due to the large volumeof equipment, we saw some opportunities to save some costs, hesays.

Such an operation is not for everyone, and Malinowski sayscompanies considering such a plan should be careful. We are aninsurance company, so we want to focus on the business ofinsurance, he says. But we had an opportunity to move into thetechnology arena and do some service and support on ourequipment.

Obviously, at $40 million, the savings are substantial, butMalinowski says the program actually has other benefits, too. TheESU technicians understand the equipment and find out what worksand what fails. Its to the point now that we are part of theselection process for new technology that is coming into some ofthe business areas, he says.

The work is not confined to the computers used in State FarmsBloomington, Ill., headquarters. The same service is offered to allof the companys agent and claims locations. The remote employeeswork through the help desk. If they are unable to resolve theproblem with their piece of equipment, they go to a Web form andidentify the piece of equipment that needs to be replaced, he says.If we receive the order by 5:30 p.m., we guarantee we will ship areplacement product of similar or at least compatible model typethat day.

When employees receive the replacement unit, they remove it fromthe box and put the broken piece of equipment into the box,repackage it, and ship it back to the home office via a prepaidshipping label. Our goal is to get our business partners in thefield up and running so they can better service our policyholders,Malinowski says. We just transfer ownership of the problem back to[the support unit]. We love solving problems.

Of course shipping expenses can be high, so Malinowski says heencourages the remote offices to check with local vendors to see ifthe work can be done cheaper somewhere else. If our price is notlower, we encourage them to do business with the other companybecause we need to do what is best for the policyholder, hesays.

Technicians in the ESU have a minimum of A+ certification fromCompTIA (Computer Technology Industry Association). The techniciansthen work with manufacturers such as Hewlett-Packard, Compaq, andIBM and get involved in the manufacturers maintenance programs.Once the technicians have demonstrated their technology competenceonline, the companies will allow the State Farm unit to performwarranty work on the products State Farm has purchased. This way wedont have to send warranty products outside the company, Malinowskisays. The manufacturers provide any replacement parts and reimburseState Farm for the labor.

For a company the size of State Farm, the electronic supportunit is a solid way of stretching IT dollars, according toMalinowski. Its pure economy of scale, he says. Once you developthat support system to fix that first unit and then get the second,third, and fourth, you leverage some of your business processeslike we have. It proves to be a very efficient business model.Robert Regis Hyle

For more on getting the most out of every IT dollar, seeStretching Exercises,

Online Service
CIGNA Offering Prescription DrugInformation

CIGNA HealthCare hopes to unravel some of the mysterysurrounding prescription drugs for its customers through the launchof a new online service, PharmaAdvisor, available to 14 millionCIGNA members. The companys Web site (www.mycigna.com) allowsconsumers to make comparisons between prescription drugs, withinformation on costs, side effects, and alternatives. This willallow consumers to hold more informed discussions with theirphysicians about medication alternatives, according to JosephMondy, CIGNA systems communication leader. If you have a particularailment that requires ongoing medication, Mondy says, PharmaAdvisorwill tell you different drug classifications used to treat themalady; allow you to do comparisons; tell you what food, drug, andtobacco interactions with the medication will do; and give you theretail price of the drug. CIGNA gets its data on prescription drugsfrom SUBIMO, LLC, a medical board with 800 clinical advisers,according to Mondy. Thats the beauty of the Internet, he notes.Customer satisfaction has been almost immediatea survey of usersfound 80 percent believe PharmaAdvisor is a valuable benefit, and70 percent indicate they will be returning to the site.

Headquartered in Philadelphia, CIGNA Corp. is one of the largestpublicly owned employee benefits companies in the U.S. Its CIGNAHealthCare provides medical care through managed care and indemnityprograms to approximately 14.2 million people.

The expanded myCIGNA Web site offers other medical informationto members and allows those who are taking part in the companysmail-order system to order their prescription drugs online and getrefills shipped directly to their home. This gives consumers thekind of information theyre clearly looking for, says Eric S.Elliott, senior vice president of CIGNA HealthCare pharmacymanagement. It takes some of the mystery out of prescription drugsby giving people the information they need to make side-by-sidecomparisons of medications used to treat specific conditions.

Elliott adds that there is a potential for costs to decrease, asconsumers become more aware of the cost implications of thesedecisions.

Agency Interface
The HartfordBuilding Bridges for Faster Personal Lines Coverage for Auto,Home

Quote-to-issue (QTI) has been offered by The Hartford forhomeowners insurance, and now auto insurance coverage has beenadded to the service to make for faster, easier agency interfacewith the carrier. The new interface gives The Hartford the abilityto bridge with the agency management systems and comparativeraters, says George Thacker, senior vice president for personallines marketing with The Hartford Financial Services Group,headquartered in Hartford, Conn.

Quite simply, QTI is a big step toward making our processeseasier for an agent to conduct business with ushelping to delivergreater value to our agents, says Thacker.

The interface provides a huge advantage for the independentagents selling The Hartford personal lines, Thacker notes,especially with many customers purchasing auto and homeownerspolicies from the same agent. Having home and auto on the samesystem makes it easier to sell the customer, he claims. But thebridge also means agents dont have to double-key entry in their ownmanagement systems. Customers expect convenience in shopping forauto insurance, and the quote-to-issue system provides that.Customers have come to expect an immediate response. They want tobe able to stop by their agency and leave with a proof of insurancecard on their way to accept delivery on an automobile, Thackersays.

Initially, the system has been rolled out in 10 states withadditional states added throughout 2003. It is accessed through TheHartfords Electronic Business Center, a secure extranet used by thecarriers 36,000 producers and customer service reps.

Thacker believes the QTI system makes the value proposition muchstronger for agents. They can spend more time helping the customerunderstand why the coverage they are recommending is right anddeveloping the needs of their customers. QTI also allows less timeadministering and taking care of paperwork. We can take that offthe shoulders of the agents and allow them to focus on adding valueto their customers.

Users have been delighted with the benefit, says Thacker. TheHartford has gone from being known as somewhat of a labor-intensivecompany to do business with to being one of the easiest carriers todo business with, he asserts.

Thacker believes The Hart-fords independent agencies willappreciate the effort. We spent quite a bit of time and capital onthis.

The bridges between carrier and agency are based on ACORD XMLstandards and enable straight-through processing. Data bridgesallow for what is virtually single entry, says Thacker, andtransfer customer information between systems.

The Hartfords customers can receive quotes directly online orthrough an independent agent. By visiting the companys Web site(www.thehartford. com), customers can click to the get a quote pageand have their choice of securing an automobile or homeowners quoteonline, over the telephone, or through an agent.

Documents Center
New Access for IT Documents Available Online toPrudential Group Customers

The Prudential Finan-cial, Inc., group insurance business unitis providing group insurance clients with Web-based access to arange of benefit plan documents through its new Online DocumentsCenter (ODC). More than 1,000 employers are now able to viewbenefits programs online since the program began in July, says BobPatience, vice president e-commerce in group insurance forPrudential. Eventually, the entire book of business will beavailable, he notes, adding the group insurance market offers valueto the companys products.

The ODC is a secure Web site application that lets clients usean ID and password to access client-specific documents, includingadministration manuals, contracts, certificates, summary plandocuments, enrollment packages, and forms. The ODC is available athttp://gidoccenter.prudential.com or through www.prudential.com/gi,Prudentials group insurance public Web site.

The ODC is the latest addition to Prudentials Group Insurancelist of applications. For employers, it includes disability claimsreporting, claims submission and tax reporting, and evidence ofinsurability status. For employees, it includes disability claimand payment status, enrollment for optional term life, dependentterm life, and short term.

Web Site Functionality
Gmez Analyst Says Carriers Need to Bring Agents Onboardto Improve Customer Service

Since independent agents have figured out the Internet is notsome curse upon their house, a research analyst for Gmez, Inc.,says carriers now have the job of convincing agents to use the Webfor more self-service functionality that will save both the carrierand the agent time and money. The idea that carriers would changetheir business model fundamentally as a result of the Internet wasnever a reality, says Tim Carpenter of Gmez, the Internet qualitymeasurement firm based in Waltham, Mass., and author of a Gmezbrief, Best Practices: How to Make Self-Service Requests, DocumentImaging Pay Off.

Carpenter believes agent-affiliated carriers have been unable toaddress the issue because of the agents fear that the Internetchannel would undercut their business. But, he adds, carriers haveno desire to change their distribution channel, and therefore theymust focus on finding a way to get that message to agents so theagents will become more open to promoting the online channel. Theonly way you are going to do that is by showing directly that theonline channel is a supporting mechanism for the agent, hesays.

Carpenter believes the ad-viser/broker space is a good model foragent/carriers to follow as an example of how it panned out and howit continues to pan out. Brokerages were forced to address theInternet sales channel earlier than insurance carriers, although heclaims carriers have an advantage in that demand for onlinefunctionality has been greater in the banking and brokerage spacethan in the insurance space. Carriers have bought themselves sometime to address the agent/online channel conflict issues, hesays.

He thinks consumer online demand in the insurance field willincrease as individuals come to rely more and more on the Internetfor their daily lives.

An earlier Gmez survey showed 40 percent of registeredinvestment advisers noticed an ability to manage more business whenclients perform more administrative tasks online.

The initial challenge for brokers was to get as much informationonline as possible so greater attention could be paid to theadviser and the role the adviser plays in the process. He saysinvestment advisers have been able to spend less time performingadministrative tasks because of online self-servicefunctionality.

The first step for carriers, Carpenter says, is to bring agentswithin the online experience and promote them as a crucialcomponent of that experience. Online tools such as agent locatorsare an excellent help in this regard, he claims.

With agents in the middle of the self-service functionality,they can easily identify specific policyholders who are higherpriority to them. They then can take follow-up steps, either byphone or by e-mail, to let a policyholder know that requestedchanges were made and they are available to assist the policyholderin any way. By tying agents into the self-service functionality,they can select which customers they want to follow up with.

Reluctance to participate in the online process falls squarelyon the shoulders of the agents, according to Carpenter. On thecarrier side, there is a wealth of reasons this is something thatis desirable, he says. First and foremost, its a cost-savingsopportunity. He also thinks loyalty and customer satisfaction comeinto play. Surveys done by online bankers show more loyalty to thebank by online customers than by the mainstream customers.