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Prepared for Electronic War

Much like the days when the term military intelligence was considered an oxymoron, Bisker sees the dichotomy in placing our trust in the protection of our communication systems in the hands of the army. We like to make fun of them, yet were proud of them at the same time, he says. Theyre the same people with the Abrams MIAI tank, which works pretty darn well. Bisker doesnt believe America will be taken by surprise by some type of electronic attack. The government is spending millions of dollars trying to defend against it, he says.

Bisker speculates that denial of service attacks might be the Iraqi response to American bombs. Instead of blowing up our buildings, they may decide the best thing they can do to Americans is screw up Citibanks servers or interfere with Allstate, State Farm, and Prudential, he says. He believes businesses learned from the 9/11 attacks to develop business continuity and disaster preparedness plans. 9/11 was a wake-up call to a lot of people for things like disaster recovery, he says. Other areas in-cluded the concept of geographic concentration of risk and the impact of leaving all the infrastructure concentrated within that one area of New York. Its a miracle the stock market was able to come up as fast as it did, and it took Herculean effort to do that.

Things have changed a great deal since Americas last round with Iraq. Insurers have increased their use of technology, and the technology they use has improved, says Bisker. The Internet was a fledgling commercial mechanism at the time. Now its worldwide, and e-commerce is growing.

The world of insurance could become complicated once the U.S. has declared war. In the moments after 9/11, President Bush declared America was at war with terrorists, a term that caught the attention of property/casualty insurance carriers. The president was saying that allegorically, so the carriers did not invoke their war clauses, says Bisker. War clauses relieve insurers from risks associated with battles. Bisker doubts whether insurers could have convinced American courts the 9/11 attacks were acts of war, but with United Nations resolutions being bandied about, escalation of activities against Iraq would almost certainly be considered a war.

That wont mean much to Mutual of Baghdad (if there is such an entity), but it is an issue that could be visited if terrorists strike in America in the days following an invasion of Iraq. That could be an interesting point and one Im certain carriers could argue, says Bisker. Thats one reason we have terrorism coverage right now. I would think you would have to have terrorism insurance to be compensated today.

Producer Support
Hancock Enhancements Support LTC Products Through the Internet

John Hancock Life Insurance Company has enhanced its online illustration and inforce management system, known as eHansel, to support the sale of long-term-care insurance (LTCI) policies. The eHansel tools will make it easier for the Hancock LTCI producers to make new business proposals and manage their current policyholders.

The eHansel system originally was launched to support our life insurance business, says Ken Nordstrom, vice president, Estate and Business Sales for John Hancock. Field response to the system has been so positive, weve decided to expand its capabilities to support other core insurance products, starting with LTCI.
eHansel is designed with a similar look and feel of Hancocks current LTCI illustration system. There was no additional training or equipment needed for the transition. When producers log into the John Hancock Web site, they use a system with which they are already familiar. This gives the producers more time to develop relationships, formulate marketing presentations, and make sales. The Web-based system also will run off Hancocks server so producers from different sales channels can be assured the latest versions of data are available as soon as possible and at the same time.

We want to make doing business with Hancock as easy as possible for our producers, says Peter Anderson, executive director, Advanced Sales Illustration. There are so many variations regarding state compliance for LTCI, we believe it will be a relief for them to know were centralizingand constantly updatingthe illustration system.

By including support for long-term- care insurance on eHansel, Hancock hopes to reach more distributors and improve the ease of doing business for producers who want to begin selling Hancocks LTCI coverage. We also think LTCI producers will see the support weve developed for life and feel encouraged to branch out into this product area as well, says Anderson.

Whos Using What

The Blue Cross Blue Shield Association (BCBSA) has announced a partnership agreement with OpenNetwork Technologies. They will work together to promote OpenNetworks DirectorySmart, a solution that secures and manages users access to confidential information and multiple applications over the Internet.

The Blue Cross Blue Shield Association has signed a multiyear communications services agreement with Sprint. The agreement allows BCBSA and its 42 independent, locally operated Blue Cross and Blue Shield Plans to have full access to discount pricing on a variety of Sprint products and services, including high-speed communications technologies, domestic Sprint IP (Internet protocol), Sprint DSL, Web hosting and collaborative services, as well as enhanced and interactive toll-free services.

Royal & Sun Alliance has agreed to terms on a 10-year contract with Unisys that will see R&SA outsource its processing and administration of the life and pension policies of its UK Life operation to Unisys Insurance Services Limited.

Vision Service Plan, a provider of vision care insurance coverage, has selected ILOG to improve its claims processing system through the use of ILOG JRules Business Rule Management System.

The Greek Catholic Union of the USA (GCU) has reached a licensing agreement with Genelco Software Solutions for use of Genelco Life+ to administer universal, whole, and term life products and flexible premium deferred annuities to the GCU membership. In addition, AAA Life Insurance Co. has licensed Genelco LifeViewOE to expand its agent services and improve consumer data access for its product offerings. AAA Life will have a seamless front end that will integrate the Internet with a back-end administration system.

Michigan Millers Mutual Insurance Co., a personal and commercial lines carrier, will replace its existing policy administration environment with the Example Platform Product Suite from Duck Creek Technology. This is the first step in a three- to five-year initiative to deliver straight-through processing through the product life cycle.

Delta Lloyd, a member of the AVIVA plc international insurance group, has gone live with a P&C claims management system from FINEOS Corp. Delta Lloyd is the first customer to go live with the FINEOS Claims Manager since the product was released last year. Canada Life has purchased a life and pension distribution and servicing system from FINEOS called FINEOS Life Front Office, which marks the vendors first move into the German market. While

Canada Life is headquartered in Toronto, it also operates in the U.S., United Kingdom, Brazil, and Germany. In addition, FINEOS has delivered its multichannel intake and claims management solution, FINEOS Disability Claims Manager, to CORE, Inc., a provider of employee absence management.

Manulife USA has selected BISYS to support its individual retirement plans with administration services for its annuities division. The BISYS Individual(k) solution includes IRS-approved plan documents, employer and financial adviser kits, and customized Web content and tools. BISYS also has been selected to support the insurance distribution strategy of Pennsylvania-based First Security Investments, Inc. BISYS will offer a portfolio of insurance and annuity products, sales and back-office support services, and Web-based resources and tools.

Erie Insurance Group, the Pennsylvania-based property/casualty insurer, has selected Accenture to provide a product development and policy processing platform that will help Erie enhance its customer service and policy processing capabilities.

Travelers Property Casualty has established a new integration relationship with Rackley Systems, Inc., for use of the Rackley for Windows Personal Auto rating system. The product is being used initially in Tennessee and Alabama with the balance of the states to follow. Celina Insurance Group also has signed an agreement with Rackley to add the vendors Internet-based quoting service to Celinas agents-only Web site. It will include rating for commercial auto, garage, general liability, and workers comp.

MONY Life Insurance Co. has selected AdminServer to administer the MONY annuity product line through the use of the AdminServer solution AdminLife & Annuity.

Health benefits provider Humana Inc. has signed a multiyear contract with KnowledgeBase Marketing. Humana will use the vendors IMPACT customer relationship management solution for its consumer marketing efforts.

The PMA Insurance Group, a regional property/casualty insurer specializing in workers comp and group disability, has signed a software licensing agreement with Docucorp International. PMA will be using Docucorps suite of software solutions that will allow the insurer to automate its correspondence and forms production as well as allowing electronic delivery.

A pair of Japanese insurers, Sompo Japan Insurance Inc. and Fuji Fire & Marine, have signed membership agreements to begin trading on the inreon platform, an online marketplace for the reinsurance industry.

Alfa Life Insurance has selected Fiserv, Inc., to provide the Alabama-based insurer with Fipsco Life Portraits Enterprise Solution to serve as its life insurance marketing system. It will illustrate universal life, whole life, interest-sensitive whole life, and term products and provide electronic applications and forms to meet Alfas marketing requirements.

Merced Mutual Insurance Company has selected Blue Cod Technologies, Inc., for its suite of work management and relationship management software products to integrate with Merceds policy processing system. Included in the agreement are Blue Cod Allgenda diary, Blue Cod Allwrite letter writing system, and Blue Cod AllOne, designed to bring together policy, claims, and billing information from multiple databases into a single screen.

Blue Cross and Blue Shield of Oklahoma has licensed its Integrated Medical Management (IMM) solution from MEDecision Inc., a software and services provider in care management. BCBS of Oklahoma is the 16th BCBS organization to use MEDecisions integrated care management.

Aetna Insurance has chosen the Brix System from Brix Networks to enhance its ability to verify and monitor the quality of its new enterprisewide Voice over Internet Protocol network infrastructure and services.

CIGNA Corp. has selected Frictionless Commerce, an enterprise-sourcing firm, for its Frictionless Sourcing enterprise-sourcing platform to manage costs across the organization.

Netcare Life and Health Insurance has entered into an agreement to license Professional Data Management Agains LifePro Life Insurance Company Administration system to replace its current legacy systems. Located in Guam, Netcare Life and Health Insurance is the life division of Moylans Insurance.

New York Life Insurance Company has chosen the Collabrys LaunchPad Solution to manage the acquisition and retention of its large customer base. Collabrys is a provider of interactive database marketing solutions.

GMAC Mortgage Corporation has chosen Balboa Insurance Group to provide insurance outsourcing functions. This agreement expands the business partnership between the two companies that began earlier this year. Under the agreement, Balboa will provide insurance tracking services that include data maintenance, EDI processing, customer service, and online claims service.

Global Tool
International Data Available for Hartford Agents on the Web

Through its sponsorship of the International Trade Data Network (ITDN), agents of The Hartford Financial Services Group can provide their business customers with a wide range of information and tools to help the customers succeed in the global marketplace.

The Hartford is offering its agents and customers free access to the members only section of the ITDN Web site at www. itdn.net. The Web site offers information on a variety of international business issues.
Whether a business is already operating globally or just entering the international arena, Hartford agents and customers now can tap into the ITDN to research global business issues, says Lauren Berry, emerging markets national direc- tor at The Hartford.

The Web site is updated several times a day as the ITDN tracks the latest news, market and trade information, export requirements, and other resources that businesses dealing in the international marketplace might need. Businesses also can do research on the ITDN Web site into new markets, conduct foreign economic analysis, and even check on travel advisories. Specific re-sources accessible via the site include:

Worldwide roundup of the latest news about 39 targeted industries.
Global business reports on 12 technology-oriented topics, including computer security and wireless communications.
Detailed background about more than 40 individual countries and the European Union, covering such topics as economic outlook, political situation, and import/export requirements.
Comprehensive listing of overseas trade contacts.
Library of official speeches on global business topics given by President Bush and representatives of the U.S. State Department.
Information about U.S. federal and state government grants to support overseas business growth.

Were offering access to ITDN resources as a value-added service for our agents and customers, particularly those who are looking to expand their operations overseas, says Berry. The Hartford also offers its clients International Advantage, an ACE American insurance policy, which includes a full range of international coverages.

Survival Tactics
Insurance Pain Points Require IT Rx

The pain points for insurance carriers arent much different than those of any other industry, but insurance CEOs are turning to their technology teams to provide soothing relief for what ails them, according to META Group insurance information strategists Don Himes and Laurie Ingram.

META Group conducted a teleconference in March for insurance industry leaders on survival tactics for 2003. Himes is senior vice president and service director for META Groups insurance information strategies group. Ingram is senior program director for insurance information strategies.

Using information obtained through a survey of insurance industry CEOs supplied by the consultants Tillinghast Towers Perrin, Ingram listed the industrys 10 critical issues as earnings growth, revenue growth, return on capital, expense control, competition, capital management in allocation, earnings consistency, pricing adequacy, asset liability management, and merger/acquisition activity.

Himes then broke down the discussion along product lines and mapped those business pain points to IT issues. Looking first at the annuity market, Himes pointed out annuities are under the most crushing price pressures of any insurance product. He listed areas where IT leaders need to concentrate. The first involved sales channels. The Internet explosion of direct selling has not materialized, he said. One of the reasons the sales channel has fizzled is because the ability to transact business over the Internet is limited. Insurers need to renovate back-office systems to support front-end flexibility, said Himes.

He asserted insurers must develop enterprise application integration strategies and put some effort behind agent/customer initiatives. Insurance IT people in the annuities market also need to examine costs and infrastructure conflicts with the other business lines, according to Himes.

In the life insurance market, he said, one area of concern is packaging existing products with the ability to look across customer needs. He noted life insurers should bundle and create market baskets with other financial services products to create customer-centric views. Companies also need to focus on customer data integration, he said.
In addition, he added, carriers need to support agent/broker upscaling efforts. Distribution channel relationships are a lot more complicated today, he said. Carriers need to find a way to extend those relationships.

Himes indicated carriers also must explore ways to reduce service costs for closed blocks of business and to be prepared for mergers and acquisitions. How are joint business processes going to work? he asked.
In the property/casualty market, insurers have been dealing with a down market and poor combined ratios. The P&C market is extremely price sensitive, he said. To be successful, IT departments will have to increase external and collaborative efforts around claims fraud. Claims activity also has to become more customer-centric. Insurers have to increase their willingness to look at enterprise resource planning packages, said Himes.

Among the strategies for health insurers, Ingram indicated payers need to reduce operational costs, improve automated workflow systems, and extend self-service capabilities for their insureds.

Himes added insurers must concentrate efforts in the area of IT to be successful. Price pressures and the rising bar for expected levels of operation excellence are forcing insurers to more balanced IT portfolios.