News, Insights, Innovations.

MetLife recently conducted a survey on employee benefit trends and found that 44 percent of employers are delivering benefits via the Internet, up from 30 percent in 2001. Forty-five percent of employees cited the Web as the channel of choice for benefits enrollment.

Aetna Enhances Navigator with New Tools
Aetna has made several improvements to Aetna Navigator, its member self-service Web site that offers consumers information to make their own healthcare decisions. The password-protected Web site features the Aetna Navigator Hospital Comparison Tool, Price-A-Drug, Price-A-Medical Procedure, and Evaluate Your Health-care Provider survey. Members with a flexible spending account (FSA) or Aetna HealthFund can track their account or fund balances on the site and access tools that help estimate the pretax amounts they should direct annually to their FSA.

As more people enroll in consumer-directed health plans and consumers have more decision-making power in managing their benefits, the demand for credible health information and online benefits management tools has increased, says Ronald A. Williams, president of Aetna. The Web site offers claims information and a host of tools to support informed decision-making.

Recent enhancements include a hospital comparison capability, Aetna Navigator Hospital Comparison Tool, which provides users with access to evidence-based outcomes information on hospitals in their vicinity for certain procedures and diagnoses. Members can compare hospitals based on data such as mortality rates, length of inpatient stays, complications, and patient volume. It also includes the results of The Leapfrog Group Hospital Patient Safety survey. HealthShare Technology, Inc., provides this information through its Select Quality Care Consumer tool.

Aetna Navigator is available to all Aetna members. Members who register for Aetna Navigator set their own preferences for a personalized, password-protected home page. In addition to accessing information about health, benefits, and claims, HMO members can receive preventive healthcare screening schedules and other information tailored to the age and gender of each covered family member.

Outsourcing

John Hancock to Outsource Some IT Work to IBM
John Hancock Financial Services, Inc., announced its intention to outsource some of its IT work to IBM. Under the proposed multiyear agreement, the insurer will adopt IBMs on-demand technology services to create a new flexible IT infrastructure that responds to fluctuations in computing demand.

IBM plans to assume responsibility for several services currently performed by John Hancocks infrastructure support services (ISS) department, which is part of its IT services sector. ISS maintains the companys mainframes, servers, networks, desktops, help desk, and 24/7 operations.

By providing computing applications on a pay-as-you-go basis, John Hancock will be free to focus on its core financial business and drive greater efficiency and value from its business processes. It will continue to manage all of its other information technology work, including development and maintenance of the companys application systems.

An important component of the deal is IBMs new on-demand computing model, which will allow John Hancock to move fixed technology expenses to a variable basis, providing greater flexibility and cost savings. The expected savings will be more than $90 million for the contract period. John Hancock will take a charge in the first quarter of 2003 for severance, says Tom Moloney, senior executive vice president and chief financial officer at John Hancock. The impact for the full year 2003 will result in a small net cost, less than one cent per share, given a four-month transition period.

The outsourcing initiative was spearheaded by Bob Walters, EVP and CIO at John Hancock, and is an extension of the companys continuing expense reduction program. Of the approximately 300 employees in the affected groups, about 180 are expected to transition to IBM as part of the deal. John Hancock will retain an additional 20 employees to oversee the new arrangement.

Update

Online Trading System Discontinues Operations
LONDONThe online reinsurance platform inreon has announced it is ceasing to trade as a result of insufficient business volume. Since the launch of the platform, the volume of risks processed via the platform has shown consistent growth, says the London-based inreon in a statement. However, the total number of risks transacted remained low compared with the total market volumes and fell significantly short of targets initially set by inreon.

Set up in December 2000, inreon was designed to provide various kinds of facultative and treaty risks via the online platform. The platform will remain in operation in the short term to support pending placement processes and client documentation and data needs, according to inreon.

Market rumors suggested Swiss Re and Munich Re, two of inreons biggest shareholders, had grown impatient at the slow growth of the platform and wanted to see it sold or discontinued. Swiss Re and Munich Re each own about one-third of inreons shares, while the remaining shares are split among Accenture, Internet Capital Group, and management and staff.

The London-based reinsurance hub ri3k confirms it had been in negotiations with inreon and representatives of Swiss Re and Munich Re for a possible acquisition of the platform. We had some very productive discussions, but ultimately both parties couldnt come to any kind of agreement, says Alex Letts, chief executive of ri3k. We couldnt find a basis where it made economic sense for both parties.

Letts says the e-commerce sector is starting to rebound. As an example, China and Hong Kong are reporting record waves of e-commerce due to SARS, he says, referring to the Severe Acute Respiratory Syndrome epidemic. Its just tragic this has happened to inreon at this time, just as everything is beginning to take off in the area of e-commerce and just as the insurance and reinsurance industry is beginning to commit itself to online transactions.

One market source who asked not to be identified says inreon failed because it was product-led, as opposed to market-led. (See related stories, TD, November and December 2002, for a two-part series on online platforms.)

Lisa S. Howard

Whos Using What
Golden Rule Insurance Co. has reached an agreement with DST Output on a long-term outsourcing contract in which DST Output will produce at least one million communications each month in the areas of checks, benefits explanations, and correspondence with Golden Rule customers.

U.S. Financial Life Insurance will begin using Transport from Whitehill Technologies, Inc., to enhance commission payment processes through a faster and more reliable transfer of data.

AIG VALIC has selected the MarketSoft Cross Sell Hub to coordinate new sales opportunities for the 2,300 AIG VALIC financial advisers in the United States. The software allows AIG VALIC to market its insurance and investment products to existing customers.

Group Health Inc. of New York has selected the MarketProminence tool from Continuum Performance Systems, Inc., to automate the health insurers Medi-care sales division. MarketProminence is a sales, enrollment, and financial management software suite.

Electric Insurance Co. has selected the online application SceneAccess as its end-to-end claims assignment management, communication, and reporting system between the insurer and its independent appraisers. SceneAccess is an e-service of Scene Genesis, Inc.

Tryg, the largest insurance company in Denmark, has signed a five-year outsourcing agreement with Computer Sciences Corporation. CSC will provide mainframe, midrange, desktop, Web hosting, print, and distributed computing infrastructure services for Tryg. It will also implement a mainframe disaster-recovery solution for the insurer.