This Month

Because Balboas imaging technology supports the insurance verification outsourcing operations, Korotko was able to leverage existing systems and build a paperless claims workflow system. The next step will likely be integration into a CRM system. The company has also licensed the Fiserv SIS system to update policy administration and claims capability. Korotkos staff will be implementing that as well.

While document imaging has become common, Balboas technology goes beyond the common. Working through ACORD, the company is pursuing the adoption of XML standards for its Internet and direct access systems from its agent partners. It is also participating in MISMO groups to create inter-industry standards for XML transactions.

According to Korotko, all the IT departments initiatives are designed to help Balboa be a low-cost, high-volume services provider. Balboas affiliate, Countrywide Insurance Services (CIS), a consumer-direct agency, currently has more than 545,000 policies in force. With volumes like that, Korotko and his team intend to do whatever it takes to earn as much for CIS and other businesses as possible.

At Balboa and its parent company, all of these efforts are paying off. Information Week just announced that Countrywide Credit Industries was ranked 27th on its 2001 Information Week 500 list. And, for the quarter ending Aug. 31, Balboa Life & Casualtys net written premium was $97 million, compared to $58 million during the same quarter last year.

E. Wayne Ratz
Harleysville Insurance Group
Harleysville Insurance Group is a company on the move. And Wayne Ratz, senior vice-president and CIO, is on the move with them, starting with his move to Harleysville over four years ago.

Before joining Harleysville, Ratzs entire career was at General Accident, where he started in the methods and procedures department and worked up to vice president of systems and planning. The move to Harleysville allowed him to become a senior officer of a major insurance company, reporting directly to the president.

Harleysville is a $1.2 billion insurance operation, writing commercial lines (69 percent) and personal lines (31 percent) in 32 states through 2,000 independent agents. Ratz heads up an IT staff of just over 300.

Back in the early 80s, Harleysville grew through acquisitions. It started small, picking up Worcester Insurance, Boyertown, and New York Casualty. Then the company bought Lake States Insurance just before Ratz got there, and Minnesota Fire & Casualty, just after. Its now in the process of integrating these last two acquisitions.

Ratzs first objective was to rejuvenate Harleyvilles technical infrastructure. He started by upgrading the network infrastructure and desktop systems. He next plans to rebuild and upgrade the companys core systems.

Each of the three main companies (Harleysville, Lake States, and Minnesota F&C) had separate systems for personal lines, commercial lines, billing, claims, and statistical reporting. None of the existing systems was what Harleysville wanted to keep for the future. That brought up a major decision: to buy or build?

Ratz decided to start by consolidating each of the functions into one of the existing systems, not necessarily the one that Harleysville was using. His logic: Building the ultimate system will always take longer and cost more than you think, and the company would be limping along with multiple, inefficient systems in the meantime. This way, it gets the immediate cost savings and efficiency benefits, which will help fund its future systems.

Meanwhile, Harleysville is starting to put HTML front ends on its various systems. Because those current systems are mainframe applications, its using screen-scraping technology to grab the information and put it on the Web. Today, most of its systems include a CICS presentation layer, COBOL for the business rules, and VSAM for the database. Going forward, Ratz expects to have systems that use Java, COBOL, and DB2 for the three layers, respectively.

While doing all this, Ratzs team also rolled out a new OIT imaging system with 1,500 workstations, a new CAMRA system for investments, a new HR and payroll system from PDS, and converted from VSE to MVS.

It all relates back to his early methods and procedures background: good, sound planning and implementation. He does all this while only working half days. He extends that same philosophy out to his staff, toohe even lets them pick which 12 hours they want to work each day.

James F. Klotz
The PMA Insurance Group
Its long been a truism that most people end up in the insurance industry by accident. Some do, though. Jim Klotz majored in insurance, got into the industry on purpose, and ended up as the CIO of a large carrier.

Klotz actually majored in finance and insurance at the University of Connecticut, and spent the first 20 years of his career in the P&C systems division of Travelers. In 1998, the president of PMA Insurance Group in Blue Bell, Penn., was reorganizing the entire systems department, planning to have it run by a CIO who would report directly to him. He turned to Klotz.

PMA is a large regional carrier with national capabilities. Premiums last year were around $350 million, and are on pace to exceed $400 million in 2001. Its gone from being licensed in a dozen states to practicing in 49. Its focused on commercial lines, with workers compensation being its largest line. It also offers commercial auto, multi-peril, and general liability.

PMA writes the largest number of integrated disability management accounts in the US, with its PMA One product, which combines workers compensation with disability insurance. PMA writes through 270 independent agents, split among national brokers, regional players, and local agencies. Klotz has about 100 employees in his IT area.

PMA is rolling out a new Risk Management Information System, called PMA Cinch, which has been about a year in the making. Its an online SQL 7 database that uses Brio (an online analysis tool) to slice and dice the claims data any way users want. Its served to a Web front end through Citrix. Early response from users has been positive, and PMA has plans to expand. Everything is based on an account basis, meaning that the insured (or his agent) can see the information on a consolidated basis. A future step will allow the agents to see their information on an overall agency basis.

Another change has been a shift from a preference for home-built software to buying more industry-standard applications. Its replacing its old workers comp system with a new Insurity (PRC) system, and will do commercial auto lines next.

Ironically, one of the challenges comes from being an early adopter of new technology. While many companies are only now adopting imaging systems, PMA jumped into the technology in 1992. Its now dealing with a maturing technologythat means its facing issues many carriers havent seen yet, such as what to do with its 55 million documents from the paperless claims system, many of which are past the time limit that theyre required to be kept. To handle this, and several related issues, PMA will be implementing IBMs Content Manager, which ties together e-mail, documents, voice-clips, pictures, and spreadsheets, all of which are currently stored in multiple places and not cross-referenced.

A lot of work, yes. But judging from his attitude, Klotz is still happy with that early decision to go into the insurance industry.