Risk Flow Network
Lloyds working to connect brokers, underwriters
Blue Mountain, a new electronic networking venture primarily underwritten by Lloyds (www.lloyds.com), will be launched into select industry classes throughout the second half of 2002 with a full rollout expected in 2003. Blue Mountain is using a technology called Risk Flow Network (RFN) to connect existing broker and underwriter systems in both the US and UK.
Currently, the plan is to complete a launch in the aviation, professional liability and property classes before moving to additional areas. Pricing details are still being explored; however, the current idea is to have users, primarily carriers and brokers, pay Blue Mountain for the service, which will remain independent of Lloyds. Users will then have the ability to send risk data to non-users who can access the information with no additional functionality or integration.
Blue Mountain is Lloyds attempt to remove duplications, errors, and poor data usage that are prevalent in risk submission and claims management, including renewals, endorsements and delegated authority business. Lloyds customer engagement director, Geoff Maskell, says, For carriers, specifically, the biggest change to their day-to-day lives will be the increased speed of delivery, reliability, and ease of use of the data they receive and to a lesser degree, a reduction in time spent on administration, logistics and easier management of the delegated authority process.
On the broker side, Blue Mountain is attempting to reduce the time spent on administration and logistics, freeing staff to concentrate on core business activities, as opposed to error correction.
According to Project Blue Mountain marketing director, Charles Moore, The Risk Flow Network provides a simple yet comprehensive set of Web service interfaces that allow systems to exchange structured and unstructured data using SOAP (Simple Object Access Protocol) wrapped XML messages. System-to-system communications with the RFN will be done exclusively through the RFN Web service interfaces. The use of industry standard protocols and data formats provides the RFN with the flexibility to easily interface with a multitude of systems.
Blue Mountain will not be able to provide counter-party discovery; risk rating; direct services for risk managers as customers; claims assessment; risk structuring consultancy; and money transfers. It does not portend to be an online exchange for buyers and sellers. Instead, it focuses on providing the infrastructure to ensure the existing off-line transaction is processed as efficiently as possible, reducing duplication of effort. Gregg Greenberg
IT Spending
New view for IT departments
TowerGroup (www.towergroup.com) recently released a report analyzing the value of technology in the insurance industry and how it needs to be incorporated into the business functions. U.S. Property & Casualty IT Spending: 2002 and Beyond reports that insurers have been forced to acknowledge the value of modernizing their systems to make them more flexible. Having technology that is good enough does not serve the industry.
The industry must move away from viewing IT in terms of individual projects serving individual areas in favor of a more systematic approach, says Jamie Bisker, TowerGroup director of research for insurance. The report estimates IT spending trends for P&C carriers, reviews factors that can affect spending, and discusses motives for spending growth.
Web Portal
CIGNA launches Web portal
CIGNA has joined with Sun Microsystems and Yahoo! to launch a personalized Web portal for CIGNAs 16 million health and retirement plan customers to manage their accounts. The new service, myCIGNA.com, offers participants online access to accounts, which will give them up-to-date information and transaction tools. H. Edward Hanway, chairman and CEO of CIGNA, says customers want more choices and control, not more confusion and complexity.
The new portal allows CIGNA participants to track and review medical claims and other health account information; and access a consolidated, interactive snapshot of their retirement plan.
Life Product
New release for EDS product
Data systems provider SOLCORP (www. solcorp.com) has released a new version (6.3.1) of its Ingenium product. Among its new features are improved time-to-market capabilities and the ability to address needs arising from globalization and convergence. SOLCORP provides software solutions to the life insurance and bancassurance industries.
The new version represents an ongoing commitment to the enhancement and maintenance of wealth management and insurance solutions while improving customer-centric service capabilities, says Todd Haney, vice president product management for SOLCORP. He predicts that not only will customers be able to bring products to the market faster, but they will also reduce operating costs and time.
Sales Portal
BCBS creates national sales portal
The Blue Cross and Blue Shield Association (BCBSA at www.bcbs.com) launched a national sales portal that will create an interactive and customer-centric Web site for its 250,000 monthly visitors seeking health insurance purchasing information. The portal directs consumers seeking such information to the appropriate local Blue Cross Blue Shield plan through a ZIP code match. In markets with overlapping Blue Plan service areas, users can select from a list of available plans. Since the pilot site was launched in mid-February, nearly 110,000 sales leads have been generated.
Harnessing the collective strength of the 43 individual Blue Plans through one national sales portal is a significant achievement for the Blue System and a major convenience for the millions of Americans seeking quality, affordable health insurance options, says Scott P. Serota, BCBSA president and CEO.
Policy View
EPVcuts Travelers paperwork
Travelers Property Casualty is offering a new tool to assist independent agents in selling commercial policies. Electronic Policy View (EPV) gives Travelers agents real-time access to policies, allowing agents to view, print, and save small commercial policies.
Electronic Policy View provides Travelers agencies with unprecedented real-time access to the various types of coverage information included in a commercial insurance policy. This capability virtually eliminates the need for agencies to store paper copies of policies in their office files, says David Findley, senior vice president of commercial and personal insurance operations. EPV reduces the time spent processing coverage inquiries from customers, freeing agencies to devote more of their efforts on strategic new business initiatives.
The new service allows agencies to search for policy transactions and view the policies online. EPV can be searched for specific coverages, eliminating the time needed to obtain a paper copy of the policy and perform a search manually. EPV displays commercial policies processed through Travelers policy issuance systems to convert files into electronic images once they are received from the various policy issuance systems. EPV is currently available for small business insurance policies via Travelers Agency Portal, the companys agency portal to the systems, forms and applications. EPV will be available for larger commercial accounts, as well as for personal insurance policies in the future.
This project is part of our overall e-business solution strategy for agents, said Patrick Gee, vice president of small commercial and personal insurance operations for Travelers. Policy information that used to take days to obtain is now available within seconds.
Analytical tools
Analytics help insurers manage finances
Insurers worried about the financial risks they are facing have a new tool in Dynamic Financial Management (DFM), a software solution designed by DFA Capital Management (www.dfa.com), a New York-based consultancy originally funded by Zurich Insurance. The software solution assists carriers in the financial management of the company, including areas such as reinsurance, risk management, and capital management.
Among the features of the solution are a database of all key assumptions used by financial decision-makers throughout the enterprise; a simulation engine that provides modeling of the financial markets and the behavior of the company under those conditions; and tools for analytics that allow executives to examine future consequences of decisions made today.
DFA worked with Empire Fire and Marine Insurance Companies (a member of the Zurich Financial Services Group) on a pilot program to test the DFM product starting in April 2000, which included an analysis of Empires financial condition projected into the future.
John McCartney was CEO at Empire at the time of the testing and is now CFO of Zurich North American Business Division. We were intrigued by their business model, McCartney said. Managing the value creation process in insurance operations has never been an easy or quick task.
The results of the pilot test were presented to Empire in December 2001. Empire management was able to see the risk/reward tradeoff of all its reinsurance across the entire business portfolio. Based on the results of the study, Empire changed its reinsurance structure, which brought cost savings without increasing risk.
Markus Rohrbasser, president and co-founder of DFA, says Dynamic Financial Management is fully interfaceable with any of the analytic tools or systems that a company is currently using for claims management, policy issuance, or database tools. There is no systems integration, Rohrbasser says. All that is needed is the upload of the analytics data required to feed the models on a quarterly basis. That can be done using automated data feeds or using standard technology such as an IBM Type MQ Series or something like that where you have automatic messaging or automatic data transfer.
Rohrbasser is proud of the analytics tools in the system. He describes it as question driven. Such questions include the overall performance of the company and the contribution of each product. Those contributions can also be measured from a cash point of view and from a shareholder value point of view. Says Rohrbasser: It allows you to answer all the relevant questions about financial management in insurance.
Claims
HNC introduces automated claims system
Following up on its medical bill review software for workers compensation, HNC Software (www.hnc .com) has introduced HNC Decision Manager for Claims, an automated decisioning system intended to address the needs of workers compensation carriers. The company indicates the technology is capable of reducing claims loss costs by up to 15 percent through increased efficiency and effectiveness.
With US workers compensation carriers registering a 135 percent combined loss ratio due to September 11 claims and lagging stock market returns, HNC is offering insurance carriers a method to reduce costs and increase margins via improved efficiencies in claims processing, an area where billions of dollars are squandered each year, according to HNC.
The use of these technologies, says Kimberly Harris, research director with Gartner, Inc., will allow insurers to support exception-based processing, reduce subjectivity and inconsistencies, and identify problems that will ultimately help the organization transform their claims processes.
With HNC Decision Manager for Claims, companies can receive immediate ROI as they automatically deliver the right decision at the right time, says John DAlusio, senior vice president of strategic business development, adding: This software enables executives to learn more about claims trends from both macro and micro levels, ensuring continuous improvement and the best possible claims outcomes are consistently achieved.
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