News, insights, innovations.

Anna England, vice president and general manager, IVANS Insurance E-Commerce Solutions Division, says, WebSEMCI provides AMS Sagitta agents the ability to complete Travelers unique information prior to requesting a quote in real time, using Transformation Station. This results in a quick and accurate quote for agents.

Travelers is a leader in developing automation and service solutions for independent agencies, offering a wide range of electronic services. The Travelers agency portal, AgentHQ, provides easy access through the Internet to the many systems, forms, and applications independent agencies use on a daily basis.

The insurer provides a total business system for its small commercial insurance, much of which is accessible through AgentHQ. Flexible automation options en-able a greater ease of doing business for independent agencies associated with Travelers.

Components of this system include:
Real-time transaction capability dir-ectly from agency management systems. The company is in production for quoting BOP, commercial auto, workers compensation, and umbrella insurance. Travelers also offers electronic policy view, claim loss runs, and billing inquiry and was the first carrier to launch this technology using the ACORD XML standards.
Issue Express Net, a browser-based real-time quote, rate, and issuance system.
A service center that functions as an extension of an agencys servicing operations, offering a variety of customer service levels.

Security
Security Spending Increasing to 5 percent of IT Budget

Security analysts with Gartner believe 2003 will be the first year in history in which more than five percent of IT budgets will be spent on security. That spending level means security spending will have grown at a compound annual growth rate of 28 percent since 2001, while IT budgets have grown at a compound annual growth rate of only six percent over that same time period. "

An overall increase in IT spending is occurring, but Gartner analysts say that does not mean security organizations can spend freely. In fact, enterprise security organizations will be pressured to control spending or face across-the-board cuts. Security spending cant continue to consume ever-increasing portions of the IT budget. No enterprise can afford to spend more on insurance [i.e., security] than on new product development, says John Pescatore, vice president and research fellow at Gartner.

By 2005, security groups that cant demonstrate security effectiveness metrics will experience flat to declining IT security funding, he says.

Policy Administration
Single Platform Supports Nationwide Policy Life Cycle

A continued commitment to deliver new products to market quickly has led Nationwide Financial to begin using a single platform to support the complete policy life cycle for all income products. The AdminServer Policy Administration System is part of Nationwides commitment to de-liver new products to Nationwide Financials independent financial plan-ner, wirehouse, and bank channels, according to R. Dennis Noice, vice president of life systems for Nation-wide Financial.

Todays insurance market re-quires ongoing development of timely and highly customized products to take advantage of short windows of market opportunity, Noice says. This policy administration system is designed to help us better meet that need, part-icularly in todays faster-paced environment.

The AdminServer system uses the Microsoft .NET platform and is fully Web-enabled, offering system access to independent financial planners through a standard Inter-net browser for more flexible system use and access. The system also supports the development of additional income products.

Whos Using What
Penn National Insurance is partnering with Rackley Systems, Inc., to supply its agents with a .NET Web rating tool. The tool will be part of Penn Nationals Penn-Connect agent extranet.

The Chubb Group of Insurance Companies has added Compli, a provider of compliance and risk management systems, as a preferred solution provider for Chubbs employment practices liability loss prevention program.

Health insurer Humana, Inc., has selected Perot Sys-tems Corporation to develop phase two of Humanas Web-based large group underwriting system. The system already has decreased the turnaround time on proposals for Humanas large group insurance products.

Western United Life Assurance Company has selected AdminServer and its AdminLife & Annuity solution to administer Western Uniteds annuity product lines. The new system will allow Western United to expand its financial services offerings to new markets.

AmerUs Life Insurance Group has selected Fipsco Life Portraits Enterprise Solution to enhance its ability to market life insurance products through multiple sales channels. Fipsco is a unit of Fiserv, a developer of life insurance marketing software and solutions.

Charter Partners USA, Inc., a program administrator for commercial lines insurance, has selected INSTEC, a provider of software solutions for the commercial property/casualty industry, to provide a 50-state rating and policy administration system.

Golden Rule Insurance Company has awarded a long-term outsourcing contract to DST Output, Inc. Under the agreement, DST will provide Golden Rule with at least one million business-critical communications per month, including checks, explanations of benefits, and letters to consumers.

AIG American General is working with COSS Development Corp. to provide producers with point-of-sale tools for needs analysis and advanced marketing tools. AIG American General will provide the latest version of the COSS system, Journey, to its producers.

MetLife has selected ADP Investor Communication Services to create and produce on-demand print services for MetLife Retirement & Savings plan participants. The system will reduce production costs, in-crease efficiency, and incorporate customization into the enrollment kits.

Health insurer Highmark Inc. has signed a licensing agreement with A.D.A.M., Inc., a provider of health and wellness content. Highmark members can access the A.D.A.M. content on Highmarks health insurance Web site.

Harvard Pilgrim Health Care, a healthcare provider in New England with over 765,000 members, has selected Fair Isaac and its Payment Optimizer solution to detect fraud and abuse. The system will be integrated with outsourcer Perot Systems Healthcare, which has handled claims processing and technology functions for Harvard Pilgrim since 1999.

Medmarc Insurance Group has completed the initial phase of implementation of the Beacon Business Intelligence and Data Warehousing solution from Millbrook, Inc. Beacon will provide Medmarc management with direct access to key metrics to run the business.
SunTrust Securities, the insurance affiliate of Sun- Trust Banks, has selected BISYS as exclusive provider of life insurance-related products and distribution services. BISYS is a provider of business process outsourcing for the financial services sector.

M Financial Group, a nationwide organization of insurance, investment, and executive benefit firms, has purchased 1,500 seats of the Enterprise CRM Platform from E-Z Data, Inc., a provider of front-office systems for insurance companies, broker-dealers, and agents. In addition, MONY Life Insurance Company, Nation-wide Financial, and North American Company for Life and Health Insurance have signed agreements to become part of E-Z Datas DataXchange.

North Carolina Farm Bureau Mutual Insurance Com-pany has chosen Clear Technology to provide a bus-iness process management software platform for the insurers policy processing center. The Clear product, Tranzax, will automate essential business functions.

TransGuard Insurance has signed a licensing agreement with Insurity Inc. to provide the insurer with Commercial Intellisys, Insuritys flagship policy administration system. American Hardware Mutual Insurance Company has signed a contract renewal as part of an upgrade to the Commercial Intellisys system. This will provide American Hardware an Internet platform to distribute and service its commercial property/casualty business.

CIBC Insurance and Manufacturers Life insurance Co. have both selected GeniSystems.ca Services to provide policy administration services. CIBC will use the solution to support initiatives for direct marketing of insurance products. Manulife will use the solution for mortgage creditor life and disability products in Canada.

Austin Mutual Insurance Company has entered into a licensing and implementation agreement with AscendantOne, a unit of ISO, to deploy Ascendant-Ones browser-based solutions for rate quote issuance, underwriting, policy administration, and account management.

TIAA-CREF and Guardian Life Insurance Company of America have each reached agreement with NaviSys to use the software solutions providers NaviSys Front Office. TIAA-CREF will utilize the illustration and application components to shorten the new-business cycle, decrease IT support costs, and improve service to producers and customers. Guardian will use the software to enable improvements in processes related to new business, distribution management, and customer service.

Lincoln Financial Group has selected Metaserver and its BPI software to integrate its producer management and commission system.

Acacia Pacific Holdings has selected the iVOS solution from Valley Oak Systems, Inc., to provide Acacia with a browser-based claims administration system.

Penn Mutual Life Insurance has purchased the Tower IDM system from Tower Technology to enhance business and underwriting operations and improve policyholder service.

New York Life International, the overseas arm of New York Life Insurance Co., has licensed Amarta, the rules-based software solution from Sherwood International. New York Life International has committed to deploy Amarta in a number of Asian markets.

Conferences
Review: ACORD 2003

In mid-May, I attended the 11th and, in some sense, last ACORD technology conference. No, ACORD isnt getting out of the conference businessI suspect the organization generates some very nice revenue from it. However, in 2004, it is partnering with LOMA in presenting a joint conference, called The Insurance Systems Forum. The event also will be leaving the by now familiar Disney venue and heading for Paris Las Vegas. (Hey, theres a Paris, Kentucky, why not Paris Las Vegas?)

The mood at ACORD was subdued this year. There were no glitzy production numbers during the general sessions. I didnt even receive an ACORD T-shirt or hat! There seemed to be less self-aggrandizing propaganda. Even the showman in ACORD president and CEO Greg Maciag was notched back a bit. My perception was the percentage of customers to vendors was skewed the wrong way. The vendors themselves seemed to have accepted a temporary life of quiet desperation. What do you expect? Revenues and profits in the insurance industry are down for the second straight year, IT budgets have been slashedand this is a technology conference.

That said, the 2003 ACORD conference provided some bright notes and some very interesting sessions. In the past, we have heard many mantras at ACORD: XML is the way, The Web is the way, SEMCI is the way. This year, the focus was on intelligent use of information technologyas part of every business decision, not an after-the-fact add-on.

Paperless Solution
One of the more interesting small sessions involved the development by Western- Southern Life Insurance of a straight-through processing (STP) system (originally reported on prior to rollout in Tech Decisions, September 2002). Western- Southern is a 115-year-old firm specializing in sales to individuals, families, and businesses in the middle-income market. It takes more than 150,000 applications a year and sells policies with an average life face amount of $75,000. This is accomplished with a field force of some 2,100 career agents. Most (80 percent) of applications dont really require any underwriting judgment.

The companys primary business needs were to reduce paperwork and manual intervention with the intended results of improved service, reduced expenses, and increased revenues. What it built was a new intelligent electronic application it called iNB. In a nutshell, iNB (Intelligent New Business) links together a NaviSys Front Office solution with a common underwriting platform, legacy systems, and a home-brewed front end. A rules-based system was decided upon for integration with a common underwriting platform. The new system provides all Western-Southern agents with identical laptop platforms. The laptop client is able to function in a connected or standalone environment. The system provides electronic data exchange with all involved parties using XML and ACORD XMLife.

The policy application is just a Web-based questionnaire. Fill out all the questions, and the application is complete. The user interface is simple enough that Western-Southern agents can flip the laptop around to their customers (these are the kind of policies that are sold across a dining-room table) and have them fill out the questionnaire/application. Very slick. Here we are in the midst of an industrywide downturn, and Western-Southern has invested in a new technology solution that ultimately will improve the bottom line. If you know what you are doing, you can still make money by spending money.

Keynote
The keynote speaker was Larry Downes. He is probably best known as the co-author of the New York Times business best-seller Unleashing the Killer App: Digital Strat-egies for Market Dominance. His latest book is The Strategy Machine: Transform-ing Your Business for a New Industrial Revolution. Amazing that anyone with such a penchant for long, cumbersome book titles could be an interesting speaker.

Downes outlined Five Radical Ideas we should adopt to get ready for the recovery. Some were interesting. He suggested now is the time to invest in the next generation of infrastructure, especially if youre broke. The thinking here is many companies resist change when times are good but are even more resistant to innovation when times are bad. The natural business psychology, he says, is to overreact to bad news so that when the going gets tough, everyone shorts the future. He claims if your plan is to survive until tomorrow, you probably wont have a tomorrow. Other such aphorismsYou cant save your way to success probably are valid but are much easier for an author and consultant to talk about than for a CEO to sell to his stockholders.

One of his concepts I found interesting was the idea to manage technological innovation as a portfolio. Just as a wise investor has items in his portfolio designed for short-term, middle-term, and long-range goals, so should our technology portfolios. In this economy, we dont want to focus on only short-term measures such as cost cutting at the expense of planning for adequate technology for our futures. A well-designed technology portfolio shouldnt require major adjustments at every twist and turn in the economy.

ROI
No self-respecting technologist can afford to attend a conference and not talk about ROI. But we were all over the place on ROI. We heard about the CEO of FedEx, Fred Smith, asking for a complete overhaul of internal systems and saying he didnt even want a ROI, he just wanted it done. We heard about small firms that require ROI analysis on everything. We heard about large firms that did ROI on projects only over $500,000. Some firms have special oversight committees that make decisions on any IT spending. Some firms have cut so drastically there arent any projects to do ROI on. I think Dave Findley, senior vice president of Travelers, put it all in perspective for this marketplace. He said if a business is at risk of losing market share, then a project designed to increase revenue in that market will win out over others designed to save cost, even though revenue doesnt always translate into profit. I interpret that to mean we simply need to be business smart about our IT projects.

CIO Panel
A very entertaining panel of CIOs discussed various technology issues. Gary Beach, CEO and publisher of CIO magazine, presented questions to the panel that were then addressed (or dismissed). It was difficult to find consensus among this group, but I think I safely can say the major belief shared by all is the business process and information technologies must be fully integrated. Yuri Zaystev, member of the executive board and group information officer of Swiss Re, said there is not such a thing as an IT projecteverything is a business project. Zaystev developed the IT systems for the 1980 Olympic Games in Moscow. He is a straight-shooting pragmatist who tells it like it is (or at least how it is according to the word of Zaystev). When Beach made an unfortunate reference to managing IT as an art rather than a science, he was soundly berated by Zaystev, who said something to the effect that anyone running his business as an art doesnt know what hes doing. Zaystev went on to say the most difficult job for a CIO is transferring knowledge from IT to business. He scoffed at the idea of getting corporate buy in for an IT projectif technology needs to be sold to the business people, there are fundamental flaws in the business. Zaystev provided a most entertaining discussion.

That isnt meant to denigrate the role of the other CIOs. Barbara Koster of Prudential talked about a problem we have all encountered: Just because you build it, there is no guarantee they will use it. It took some three years before self-service tools built for Prudential customers finally started catching on.

As could have been ex-pected, acronyms got tossed around: RONI (Risk of Not Investing) replaces ROI; ONTG (One Neck to Grab) is all about holding the CIO responsible for all technology (and, by implication, business) problems. Maybe thats why the average tenure of a CIO is only 3.5 years. When all the smoke cleared, there really was only one message (well, maybe two):

1. IT spending is perceived as a controlled expenditure. In difficult times, it will be a target.
2. Business process and technology must be tightly bound, and IT must be valued as if it is a strategic business partner.

An ACORD Moment
Immediately following the closing general session, Microsoft was scheduled for a presentation in the main hall on Web services and SEMCI. A large (maybe 500 people) crowd initially was gathered. Josh Lee, Microsofts Lead Technical Strategist for Financial Services, was on the podium, ready to rock and roll, but swarms of folks in yellow shirts (ACORDs uniform of the day) were running around. It seems Lee needed an Internet connection to demonstrate Web services, and none was available. So here we were at a technology conference in a hotel that has broadband in every guest room, and there was no Internet connection available. You gotta love it. After 30 minutes had passed, Lee bravely took the stage and started winging it. He described a very cool intiative involving Infopath 2003. Formerly code named Xdocs, InfoPath 2003 is a new program in the Microsoft Office System that helps teams and organizations gather and share information by creating rich, dynamic XML-based forms. Business users can more easily collect, access, and reuse information with InfoPath so they can make better-informed decisions. Infopath 2003 will be an integral part of Office 2003, and ACORD will provide compliant Office 2003 document templates for standard ACORD forms that can then be saved as unadorned XML. That is very good news for devotees of ACORD standards (arent we all?). It is so un-Microsoft to export unadorned anything. This is really a step in the right direction.

OK, we finally got a broadband connection. Many folks left the hall during the initial wait (there was, after all, free lunch available in the exhibit hall). Microsoft now was able to get to the planned program and demonstrated a very real and impressive system that received customer information via a Web client, submitted a request for quotation to multiple carriers, and then processed an application. It was all demonstrated real time and interacted with real carrier systems. Since the allotted time slot already had passed, Microsoft cut most of its planned presentation. Nevertheless, it was readily apparent to me Microsoft is ready to play ball in the Web services league. I found it interesting most of the demonstration used traditional Microsoft server-side technology (ASP) and only jumped up to .NET when needed. I would have enjoyed a much longer demonstration and discussion of what looked to be a world-class Web services application.

Would I Return?
As usual, the conference proved interesting and informative. But we are living in times when it is hard to find funds for travel or conferences, and vendors are cutting back on the number of shows at which they are able to show. It makes good sense for ACORD to join up with LOMA and put on a joint show. I look forward to springtime in Paris next year.

Paul Rolich