Steven P. Beaty, Bankers Insurance Group
Steve Beaty is senior vice president and CIO of Bankers Insurance Group, a $385 million-premium carrier based in St. Petersburg, Florida. He heads a staff of 84.
Beaty came up from the technology side of the business. He started working with banking software and services-what today we'd call "financial services"-right after school. And what the company he founded actually did-data processing-would now be called "outsourcing." Although most of his operations involved banking, he crossed over into the insurance arena, dealing with medical software, mobile home coverages, and even writing a small agency management system that was sold primarily in Florida.
Sometimes it just pays to be in the right place at the right time. When the company he'd sold his business to was itself sold, Beaty was starting to look around and Bankers Insurance was looking for a new CIO. He was tapped for the job.
It's a big job. Bankers Insurance Group is a wholly owned subsidiary of Bankers Financial Corporation and a multi-line insurance holding company. In its 25th year, the Bankers family of companies includes four insurance carriers, 20 subsidiaries, diverse products and services, and more than 1,200 professional associates. Beaty and his crew support 5,000 active agencies. As the largest writer of flood insurance through independent agencies, there are another 3,000 or so agencies that occasionally write business as well.
Bankers is primarily a niche marketer, although it does write some standard lines, such as auto, homeowners, and BOP. It also writes a myriad of specialty coverages such as collateral protection and home warranty.
Internally, Bankers is primarily an AS/400 shop. Beaty has been moving the company to a more modular structure, implementing XML to pass data from one component to another to improve flexibility.
Beaty's big push has been Bankers extensive, and constantly growing, agent portal. The system boasts a simple yet effective agent-managed security system. The agency gets a master ID and password, and then can set up its own levels of security for different employees. So a new agency employee may only get limited rights, and may only be allowed to access the site between, say, 8:30 a.m. and 5 p.m., so he can't log on from home.
The agent portal has an impressive list of capabilities. It starts with the standard offerings of marketing material, claims inquiry, billing inquiry, rating manuals, and the like. There's an online notice of loss, and when Tropical Storm Alison hit Texas, a full nine percent of loss notices came in through the site.
What Bankers can't find, it builds. It has a call center and online chat; Beaty couldn't find chat software that rolled over the way a phone system does so his department wrote its own. It offers agent reports based on templates, but will soon be offering ad hoc reporting as well. It even offers extras, such as a diary system, pre-made agency letters for agents to use, and a classified ad section (ads are subject to review, of course).
One innovative idea in the works is a "Flow Track" system that lets agents design their own e-mail based reports that can come as often as daily. This allows an agency to receive a daily listing of all cancellation notices that go out, for example, or reported claims, and so on.
With that many agents to support, however, Beaty and his team go out of their way to deal with the agents however they want to do business. That means they still support rating vendors, rating disks, and even paper applications-whatever it takes to keep the agents happy and doing business with Bankers.
Robert Pachner, Old Lyme Insurance Company of Rhode Island
Old Lyme Insurance is a real insurance company, although you've probably never heard of it. And Bob Pachner really is the CIO, although that isn't his primary job. But we'll get to that in a minute.
Most of our top techs didn't start out in the insurance business, but Pachner did; he's the fourth generation of his family to be in the business. His first job was handling a binder tub for a major New York City brokerage firm.
(Don't feel bad, I didn't know what a binder tub was, either, until he told me. In most of the country, producing organizations hold agent licenses, technically represent the carriers, and have binding authority. In New York, however, the big guys are all brokers, technically represent the customer, and have no binding authority. They used to have employees who handled a tub-a basket-full of written binders, and they were responsible for taking them over to the respective carriers.)
Pachner's title is first vice president and chief information officer of the Kaye Group of Companies. Kaye is the 29th largest brokerage firm in the U.S., with annual revenue of $82 million. It was purchased in June by the Hub Group, Canada's second largest brokerage firm. Hub, in turn, has a significant investment by Canada's Fairfax Group, which also owns TIG, Crum & Forster, and Ranger Insurance, as well as some Canadian companies. Follow that?
Old Lyme is one of Pachner's responsibilities. It's a $35 million-premium carrier, wholly owned by Kaye Group, writing business exclusively through Kaye's wholesale arm, Program Brokerage Corporation (PBC). Old Lyme participates by insuring the first layer of lower coverage of the 21+ risk retention group programs written by Kaye Group and marketed to the thousand or so agencies that submit business through PBC. Any program can include up to seven insurance companies, in layers, of which Old Lyme will be one.
Kaye is a vertically integrated company, with a large retail brokerage (Kaye), a wholesale arm (PBC), an insurance company (Old Lyme), and a claims administration company (CAC) sharing many of the same systems. Pachner and his staff of 20 support all these entities, and their combined 370 employees.
An AS/400 running in-house-programmed applications is used for rating, underwriting, policy issuance, and claims. The core accounting system is a customized VRC system, running an Oracle back end on Sun Solaris boxes. VRC is a boutique agency management system vendor in Westlake, Calif., providing high-end systems to Kaye, Aon, Talbot, and other large shops. It had VRC modify the system to seamlessly pass and share data among the various entities when a particular account is being serviced by multiple parts of the company. One result of this has been the elimination of checks being passed from one part of the company to another.
Kaye designed its in-house AS/400 to pass data directly into the VRC system, which generates all the invoices, sets up the various receivables and payables, and handles all the inter-departmental transfers, where appropriate. A project to download AS/400 policy detail to the Kaye retail VRC database is almost completed. Statistical reporting is handled by SunGard software.
Web integration is coming soon for Old Lyme and PBC. Kaye has been active on the Internet and will be leveraging that experience. Pachner already has plans to increase the efficiencies of Kaye's carrier and wholesale operations. An existing product-one used by a Kaye retail division-uses an effective Web-to-database integration system (developed by VRC) that will serve as a model for future Old Lyme/PBC Web-based applications.
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