| News
for Tuesday, May 24
CIO Panel Packs the House with Audience Response Session
CIO Panelists |
A panel of influential industry CIOs packed the house at today's general session titled "Confidently Meeting an Uncertain Future."
In the interactive session, the executives queried attendees on key topics including business-technology alignment, regulatory compliance, data transparency, funding, sourcing, and legacy systems. The panelists then analyzed the responses while adding their own perspectives.
One key finding: eight of 10 respondents reported that more corporate attention is being paid to regulatory compliance initiatives, but only four of 10 reported getting additional funding for it.
The CIOs: Chubb CIO Charles G. McCaig, FLMI, who serves as ACORD chairman; Barbara Koster, CIO, Prudential Financial; and Robert Gorski, vice president and CIO of U.S. reinsurance, XL Reinsurance. The panel was moderated by Gregory A. Macaig, president and CEO of ACORD, with Ann Purr, second vice president, Information Technology Management, LOMA. Read more and see the audience response results here TOP
Life Forms Panel Discusses Growth and Implementation
Getting the new standardized life and annuity forms accepted and implemented within organizations was the focus of the panel discussion Breaking Down the Barriers to Enable Internal Usage of Standardized Forms. Moderated by ACORD's Program Manager, P&C and Life Forms, Brian Marable, the panel featured Laila Beane, standards architect, Allstate Financial; Christopher Chartrand, senior vice president, Policy Holder Services, Genworth Financial; and Alex Varghese, vice president, Client Services, Merrill Lynch.
The session looked at how some leading insurance carriers broke down the internal barriers within their companies to implement the new standard forms for Life, Annuity and Health. The panelists provided some background on the ACORD Life & Annuity Forms Program as well as tips on how they were each able to get standardized forms adopted and implemented within their own work environment.
Over the past year, ACORD's Life & Annuity forms have made great advances in having several forms accepted in all 50 states, including Life Application Parts I and II. Currently, 22 organizations are participating in the development process including NAILBA and NAVA. Work is also underway to map the forms to the existing ACORD Data Model, further streamlining communication.
They acknowledged and discussed that there were challenges in getting company buy-in from the necessary departments including legal, compliance and underwriting. Yet another hurdle was getting signed filing authorizations which enable ACORD to file forms on their behalf. The last segment of the presentation was a question and answer session where the panelists had the opportunity to respond to specific issues raised by audience members and could address real-world issues the audience faced in their implementations.
"This session was very well received and generated quite a bit of interest," said Brian Marable. "Based on the feedback and discussions during and after the session, we hope to have new companies coming aboard to help with the development and adoption efforts."
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Collaboration to Enable Improvements: AUGIE and ACT
The roles and responsibilities of the Agents Council for Technology (ACT) and the ACORD-User Groups Information Exchange (AUGIE) - individually and together - were explained during a session at this year's Forum. According to Jeff Yates, executive director of ACT, which is affiliated with the Independent Insurance Agents and Brokers of America, the two groups are tapping their respective strengths on several projects, including one that focuses on broader implementation of commercial download functionality.
"Commercial download is a good example of how we work together," Yates said. He explained that an ACT working group documented all of the issues surrounding commercial download, and ACORD, which is closely aligned with AUGIE, took on development of Implementation Guides. Cal Durland, ACORD members services manager and ACORD liaison with AUGIE, said that AUGIE, with its access to agency management system users, has now put out the call for agency testing, and is driving that process, as well as agency education efforts.
Bob Slocum, ACT chairman and principal of a Rhode Island independent agency, told attendees that both groups - ACT and AUGIE - recognize that real-time processing is a number one priority for the industry, and that efforts are underway to move that forward. "Implementation is not what everyone would like," he said. "We need to stop talking technology. We need to talk English, and really quantify what real-time really means in terms of bottom-line benefits." Jerry Fox, a Minnesota agency principal and a member of the AUGIE Leaders Council as part of his role as AMS User Group president, said AUGIE is working to better document business successes resulting from implementation of real-time. "Communication is key," he said.
ACT and AUGIE presenters outlined other communication initiatives, including an expanded vendor and carrier technology capabilities Web site, at www.acttech.org, and the ongoing updating of information at the ACT site, found at www.iiaba.net/act. Also discussed was creation of a dedicated AUGIE liaison to the ACORD P&C Standards Steering Committee, as well as AUGIE's updating of a popular agency technology survey and the creation of an agent sounding-board for carriers and vendors to use as they design new functionalities. TOP
TCi Examines Life and Annuity Costs and Trends
Transaction Cost Economics in the Insurance Industry, a presentation by John L. Johnsen, managing director, TCi Consulting and Research, discussed their ongoing research for the life and annuity industry: LIONS - Operations for Life, LIITES - IT Expenses and Effectiveness, and ACES - Operations for Annuities.
Johnsen listed several transaction cost drivers: product complexity; Distribution Complexity; IT Complexity; Labor Costs; Centralized/decentralized; Business Process; and Outsourcing. However, there were also current business drivers such as Product Complexity, Distribution Complexity, IT Complexity and labor costs to be considered.
While examining the life industry specifically (the LIITES/L study), TCi found that at 37.8%, customer service is the largest component of total IT cost with new business coming in second at 19.8%. The overall LIITES survey showed that Application IT Expenses are divided relative evenly between maintenance (35%) enhancements (34%) and new development (31%).
For annuities, the best performing company had a total processing expense of $49.99 per contract per year vs. the survey average of $82.51 per contract.
"Most insurance companies have very old systems that are expensive to maintain," Mr. Johnsen said in an interview in National Underwriter's ACORD LOMA Daily News. "The older a life insurance company is, the more of a legacy system they have. If it's a new life insurance company, it would have one administrative system that's very efficient. But you have many companies that got into computers in the late 1950s. A lot of those systems are still around, and the cost of maintaining them is very high."
"We try to tell people not to put new products on older systems because later, when they try to do something with the older systems, they'll find the more products they have on them, the more expensive it is to get them off," Johnsen explained.
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Vision of Single Workflows via Standards
The implementation of data standards for MGA's (managing general agents) has advanced. This panel discussion, Standards for a Nonstandard Business: Surplus Lines, examined the benefits and potentials of creating single workflows for this market. The panel brought together participants in this workflow from around the world: Jason Hodson, vice president underwriting, Alea London; Mark Wilson, director, Agency Automation, Scottsdale Insurance Company; Donna Barr, assistant ice president, Marsh USA, Inc.; and Tap Johnson III, president, TAPCO
Data standards have been implemented between MGA's and the London market, presenting both successes and challenges. In doing this, it created two separate workflows for MGA's - one for London and one for the US. The panel went on to describe the realities of sending data in standardized electronic format.
Similarly, retail agents have had great success with exchanging data with the admitted markets and retail agents have derived many benefits by communicating electronically with the non-E&S (Excess and Surplus) market. They too desire a single workflow. The problem today is that MGA's are still not ready to accept the data from them. The same holds true for US surplus lines carriers who are not yet on board yet with standards with the exception of Scottsdale Insurance, represented by Mark Wilson, who is providing the leadership in driving the surplus lines carriers to adopt ACORD standards.
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Show Daily for May 24
(download a PDF)
Headlines
Session coverage:
TowerGroup Study: Insurers Must Leverage Technology
Insurers Warm Up to Outsourcing, but See Some Downside Risks
Previews:
CIO Panel: CIOs to Weigh In On Changing IT Demands
TCi to Preview IT Cost Studies
ACT and AUGIE: Session to Review Technology Priorities for Agents and Carriers
LOMA, WBT Systems in E-Learning Partnership
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