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Insurance & Technology: The Blog« March 2007 | Main | May 2007 » April 24, 2007Online Auto Policy Purchasing Reaches a Critical MassBy Nathan Conz Traditionally, auto insurers have best leveraged their Web sites by offering online rate quotes. In fact, more than half of the customers who purchased auto insurance from an agent in the past five years actually obtained a quote online. And while quoting still dominates the online landscape, insurers are now seeing some success converting those online inquiries directly into online sales. Reston, Va.-based comScore, an Internet consumer behavior analyst, recently released an online auto insurance activity study that showed 58 percent annual growth in the number of auto policies purchased online in 2006. Quoting only grew 15 percent over that same period. From a purely numerical standpoint, however, online quotes far exceed online purchases. “It's obviously much quicker to get a quote than it is to actually get through to a policy purchase,” says Kevin Levitt, vice president of comScore marketing solutions and a contributor to the report. “But insurers are really paying greater attention to how to make the process of getting from a quote completion to [a policy purchase] more simple. That's what I think the data is reflecting, the fact that insurers are pushing online conversion more and more.” Many insurers have redesigned their public Web sites, others are using Ajax technology and some are leveraging data from complimentary databases to help fill out forms faster. “It's all focused on efficiency, speed and making it easier on the consumer to get through the process,” Levitt says. The growth in policies purchased online can be attributed to several factors, Levitt says. 73 percent of U.S. households have broadband Internet access, up from 62 percent a year ago. Meanwhile, consumers are getting more and more comfortable completing transactions online. Rate quoting, though, is still the key to most carriers' online efforts. Case in point — 6.5 million quotes were submitted online in the fourth quarter of 2006, while only 450,000 policies were purchased. As a result, carriers are investing heavily in search engine keywords and sponsored links, says Levitt. And because quoting is such a large part of insurers online business, most of those sponsored links take consumers directly into the quoting process. “The promise of the Internet is its measurability, but also its ability to target. You see that reflected in what auto insurers are doing today,” Levitt says. “A lot of technologies right now are focused on cutting down the time it takes consumers to move through the quote process.” Going forward, insurers would do well to increase focus on converting rate quotes into online policy purchases. After all, getting customers to switch carriers is a big part of the auto insurance business, and in the future it's likely customers looking to switch will be looking to do so online. According to the comScore report, 65 percent of consumers would consider purchasing their next auto policy online. Posted by Nathan Conz at 04:56 PM | Comments Swiss Re Takes CyberComp to TexasBy Nathan Conz Profitability can be fleeting for insurance agents when it comes to smaller workers compensation accounts. “When we would interact with our agents, they would tell us that it was one of their single biggest issues,” explains Brad Nichols, vice president and senior sales executive at Swiss Re (Armonk, N.Y.). “With the level of commission a typical agent would get on a typical small account, they just couldn't afford to spend the kind of time needed to handle the account.” Swiss Re's Commercial Insurance seems to have found a remedy to that plight with CyberComp, a Web-based workers compensation platform. According to Swiss Re executives, the platform helps small-premium workers compensation accounts make better business sense by delivering increased efficiency and better access for agents. On May 1, Swiss Re will introduce CyberComp in Texas. It will be the 23rd state in which CyberComp writes workers compensation business. Swiss Re expects to write $200 million to $220 million in 2007 small business workers compensation premium throughout the platform. The company projects $2 million to $4 million of that to come from business in Texas. CyberComp was originally developed in the late '90s by Computer Sciences Corporation (CSC; El Segundo, Calif.) for Reliance National. The platform was acquired in 2001 by GE, which later sold it Swiss Re. A CSC client case study describes the platform both as an Internet portal and a “virtual insurance company.” Essentially, the platform gives agents access to straight-through processing in areas such as policy, billing and claims status. “It's a rating platform, it's an underwriting platform, it's a form generation platform,” explains Mike Rubin, senior vice president of technology, Swiss Re. Previously, a few weeks were needed for an agent to get a quote or a declination back to a potential customer. With CyberComp, the process takes approximately seven minutes, according to Nichols, who adds that “a lot of this was just about driving efficiency out to the agents.” The platform also helps promote strict adherence to underwriting rules. “Most carriers that are underwriting in a standard manner have inconsistencies in the way their programs are administered because individual underwriters are making individual account decisions,” Nichols says. “With the CyberComp system, when we program in the underwriting rules, [those rules] are utilized. There's no one making exceptions. There's no one thinking about gray areas or anything like that.” Implementation of the platform is a fairly simple process. State-by-state, the platform needs to be tweaked to include the right rating algorithms, underwriting rules and forms. All agents need to use the system is an Internet connection and a browser. “I think CyberComp was really far ahead of its time when it was first rolled out. What's happening is the technologies that it used then have become more standardized,” says Rubin. Swiss Re plans to launch CyberComp in Nebraska is the next few months, Nichols says. Posted by Nathan Conz at 03:10 PM | Comments CIGNA HealthCare Names Conde First CIOFormer CIGNA HealthCare's (a division of CIGNA, Philadelphia; $16.5 billion in 2006 revenue) first CIO, Conde will use that experience to support the company's portfolio of health services products, self-service capabilities and its customer-centric service model in his newly created position. Conde is giving high priority to evaluating activities that still require some element of manual processing. "I'm looking at force-ranking those activities in order to see if there's some immediate, low-hanging fruit that we can collect to further automate our processes," he comments. The goal, he adds, is to "reduce the overall cost associated with those processes, while making them more reliable and predictable in terms of the time needed to perform the activities." While Conde emphasizes the ongoing nature of process automation, he anticipates the opportunity to create a "significant uplift" in the overall experience of end-customers by addressing some salient challenges. "As always, there is a top set of issues that have a large impact on customers," he relates. "We're looking to resolve those very quickly and make sure that we have a much smoother operation, from an electronic processing standpoint." Posted by Anthony O'Donnell at 11:19 AM | Comments April 10, 2007The Time Is Now for Mobile Claims TechnologyBy Nathan Conz, Insurance & Technology Up until now, many property and casualty insurers have been able to get by with disjointed and haphazard mobile claims technology. However, the ever-increasing customer demand for service and recent technological advances may require those insurers to change course. Carriers looking to create competitive advantage should develop enterprise mobility strategies soon, experts say. "The 18- to 35-year-olds expect to get service whenever they want. They don't expect to have to chase things down. That demand is going to be huge in the next several years," says Karen Pauli, a senior insurance analyst for TowerGroup (Needham, Mass.). Pauli authored a recent TowerGroup report entitled Mobile Solutions for US Property & Casualty Claims: Life in the Fast Lane. She calls the report a "call to arms" for insurers to develop more-comprehensive mobility plans to satiate growing customer demand and create efficiencies in the field. An enterprise mobile claims strategy -- a combination of global positioning systems (GPSs), mobile check-writing capabilities, estimating software and other technologies -- can help shorten the claims cycle by allowing adjusters to handle claims on-site, reducing costs while increasing customer service. "Being able to create a very cost-efficient claims process, and being able to do that in a very seamless fashion for the customer, is a huge competitive advantage. I mean, that's gigantic," Pauli says. Despite those advantages, Pauli says that no carrier has a comprehensive mobile claims system in place. The insurers that come closest, she says, are those with advanced catastrophe response vehicles or mobile claims vans. "The exact same applications that a claims adjuster would have back in the office, they have in the van. The goal is to be able to get those same types of applications in a mobile fashion, on smaller devices," Pauli says. Such a goal is now closer to becoming a reality, as small form factor tablet PCs become more mainstream. "Mobile claims technology has been around, but the way that it has been around is what has changed," says Adam Kornak, Microsoft's enterprise mobility strategy manager for financial services. Small form factor tablet PCs and ultra-mobile devices are less cumbersome than laptop computers. The new devices are small enough to fit in your pocket, but big enough to do a claim on an electronic form. "Those particular devices are a great blend of functionality and size," Pauli says. "The new ultra-mobiles, which are halfway between a PC and a handheld device, solve a lot of problems that have existed in the market relating to short battery life, difficulty reading in bright daylight and so on." Further, claims software on laptops, more often than not, is the same as it is on desktop computers. "You're just taking the same application with you, which doesn't necessarily improve the business process," Kornak says. "New applications have been developed that can take advantage of these converged form factors [on smaller tablet PCs], so there are fewer fields to fill in." The next step, Pauli says, is incorporating predictive analytics into the mobile claims process. Many experienced claims workers are set to retire in the next ten years, TowerGroup's Pauli explains, and their expertise (such as recognizing cases of fraud) will be difficult to replace. "You're replacing people with 35 years of claims experience with people who have two. With predictive analytics, you take claim data and then push information out to that inexperienced claims adjuster." Lingering legacy systems issues may be one reason why insurers have been slow to adopt enterprise mobile strategies. As carriers fix those legacy problems, they'll be able to more aggressively address mobile claims technology. It's possible, though, that they don't have to wait. "There's a great deal of complexity with legacy claims systems, sometimes more than you really want to deal with. But part of that is just perception," says Microsoft's Kornak. "Most of these [mobile] applications don't require a great deal of redevelopment on the back-end, claims-management side. Instead of claims agents using a piece of paper, they're using an electronic form." Posted by Nathan Conz at 04:26 PM | Comments Capital BlueCross Deploys End-to-End E-Prescribing ServiceBy Nathan Conz, Insurance & Technology As the health insurance industry becomes more commoditized, more insurers are looking toward technological solutions to help provide added value to customers. In an effort to reduce errors, provide cost savings and add convenience, Capital BlueCross (Harrisburg, Pa.) is providing physician offices in Central Pennsylvania and Lehigh Valley with an electronic prescription service from Prematics (Bethesda, Md.). "The market is very competitive. Anything a health insurer can do to enhance member service and increase the ease of doing business is a positive when it comes time to acquire and retain business," says Kent Whiting, vice president, information technology at Capital BlueCross. "E-prescribing, because the pharmacy industry itself is highly automated already, is a good place to get started, with clear benefits." E-prescription services are not an entirely new frontier, but maintenance and cost of investment issues have often discouraged medical providers from adoption. Prematics has tried to overcome those past barriers to adoption by providing an easy-to-use tool and fully managed service supported by a physicians' network provider, says Prematics spokesperson Rochelle Woolley. The Capital BlueCross initiative is provided to eligible physicians for free, with Prematics providing all hardware, software, connectivity and handling implementation, and ongoing service. "It's a lot different than the vendors out there that are selling hardware and software to physicians' offices and asking the offices to act as their own systems integrators," Whiting explains. The Prematics ScriptTone electronic prescribing service provides physicians with up-to-date patient medication history and pharmacy benefit information, through a connection to RxHub, an industry network exchange. The end-to-end service will allow physicians to access claims-based patient prescription information and a patient's formulary at the point of treatment, via a handheld wireless device. The initiative should cut down on errors by providing doctors with a more complete patient medication history that relies less on a patient's memory and a doctor's chart. Further, the ScriptTone service could help streamline the prescription process, which has grown increasingly complex with advent of multi-tiered formularies that encourage or even require the use of generic medications. "Knowing there is a generic equivalent and that the patient's formulary may require the use of that generic is critical," says Barclay Fitzpatrick, vice president, corporate communications, Capital BlueCross. "You need a system like this to ensure that the intent of getting more cost-effective, but equally medically effective, medications is being fulfilled." Posted by Nathan Conz at 02:05 PM | Comments Lowenthal Hired to Transform NYMAGIC ITBy Anthony O'Donnell, Insurance & Technology Many insurance CIOs would love the opportunity to manage a technology environment free of the burden of legacy systems. However, it's a case of "been there done that" with newly appointed CIO and senior vice president of specialty lines P&C carrier NYMAGIC (New York Marine and General Ins. Co.) Craig Lowenthal. Having had the opportunity to build from the ground up at Integro Insurance Brokers and Hartford Financial Products (both of New York), Lowenthal took on his new post with a view toward a new challenge. “I’m very familiar with the lines of business, as well as the available technology products on the market,” Lowenthal comments. “Executing a technology turnaround at a company like NYMAGIC is a big job, but one I’m confident I have the experience to do.” In the past, NYMAGIC had not put top priority on IT, but current management sees the strategic value of technology, according to Lowenthal. As part of a five-year strategic plan, the carrier’s leadership has made plans to invest in IT in pursuit of ambitious revenue and service goals. The new CIO’s IT plans involve evaluating legacy systems, with high priority on the carrier’s policy admin, billing, accounting and GL platforms. Lowenthal is also planning to introduce a portal-based intranet. Lowenthal notes that NYMAGIC’s slogan is “We’ll look at anything.” To live up to that ideal, the company will need flexible and nimble systems that can efficiently rate one-off policies and rapidly create and execute on new products, he comments. “You can’t do that with antiquated systems,” Lowenthal says. “And if you want to reap the rewards of additional revenue, you need your expense base to be as minimal as possible.” Posted by Anthony O'Donnell at 12:44 PM | Comments
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