Let’s talk about insurance, technology and other stuff

In this interview with Insurance Journal’s Mitch Dunford, Applied Systems CEO Reid French talks about the future of insurance technology. He also discusses Applied Systems® Epic, the fastest-growing agency management system in the insurance industry today.

To learn more, visit www.appliedsystems.com/epic.

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TENCon is the flagship annual conference for insurance professionals who use Applied Systems agency and broker management software. Designed for agency and brokerage owners, principals and everyone on their teams, TENCon provides a format complete with technology innovation and education, industry best practices and professional networking. TENCon allows you to immerse yourself in information and networking to gain the greatest value from your Applied Systems investment, making your business more valuable and productive.

Learn more and register now: www.tencon.org

 

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Mike Drakulich

Catastrophe-ready?

If U.S. insurers are nervous about another bad tornado season, they have good reason.  Financial losses from natural catastrophes hit record highs in 2011. Globally, natural disasters cost $380 billion in damages.

In the United States, tornado damage alone accounted for more than $10 billion. Those losses are reflected in combined ratios. Fitch Ratings recently reported a rise in combined ratio for 47 companies surveyed. So insurers are likely paying extra close attention to weather reports.

Weather forecasters say conditions could be right for another above-average tornado year. This year’s early-season twisters in Illinois, Indiana, Kentucky, Ohio, Missouri and Alabama followed one of the worst U.S. tornado years on record.

Last year, La Nina was the culprit, according to AccuWeather.com. This year, warm, humid air from the Gulf of Mexico could fuel strong weather and generate even more tornadoes. AccuWeather.com says the U.S. Gulf states could be hit early, before the strong weather shifts to the lower Ohio and mid-Mississippi valleys.

What can insurers do to help customers in areas prone to tornadoes and other natural disasters? How can agents and brokers–vulnerable to those same disasters–be ready to service clients when they need help most? Does being in the cloud keep you and your customers safe from damaging winds and other natural perils?

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TENCon is the flagship annual conference for insurance professionals who use Applied Systems agency and broker management software. Designed for agency and brokerage owners, principals and everyone on their teams, TENCon provides a format complete with technology innovation and education, industry best practices and professional networking. TENCon allows you to immerse yourself in information and networking to gain the greatest value from your Applied Systems investment, making your business more valuable and productive.

Learn more and register now: www.tencon.org

 

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jbieker

Making technology work for you

If ever there was a time for the insurance industry to recommit to embracing technology, now is that time, don’t you think?  As agency principals, my partners and I see real benefits from understanding how important it is to use technology in ways that help our business navigate challenges and make the most of opportunities.

In the past two months, our business is 10 percent more profitable than the same time the previous year and once the accounting comes in for February, that percentage could be even higher. We’ve learned how to make our procedures fast and automatic, and we understand our staff’s productivity better than ever.

We installed a new automated agency management system, and we couldn’t be happier with the impact it has on our business. Anybody who runs an agency knows it’s not an easy proposition to change from one automated management system to another. But we knew that our business depended on having the right system in place and using that system in ways that would let us spend much less time on IT and more on insurance sales and service.

A huge area of opportunity opened up for us as we realized how the agency management software could help us in our marketing efforts. Other benefits: Staff productivity and accountability. The system allows us to measure efficiency and establish our own performance benchmarks. And we can go further by identifying areas where we can educate and train our staff to reach those benchmarks.

Our software, Applied Systems Epic, also helped us eliminate what used to be month-end headaches around financial reporting and producer commission reports. The technology makes the information easy to get at any time. The system is so good and so handy.

We’re big believers in using the technology to be successful in all market conditions. What’s your agency doing to maximize productivity and profit?

Jeff Bieker is president of Assurety Northwest Inc. out of Portland, Ore

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Contractors, property managers and commercial accounts are some of the most profitable clients for insurance agents. But commercial lines clients can unintentionally overwhelm agency staff with day-to-day requests for certificates, auto IDs and other simple but time-intensive activities. The time used to process these tasks takes attention away from more critical service needs.

To assist our clients, our agency implemented an online portal where our clients can service themselves for certain needs. The product we use is CSR24®, from Artizan Internet Services. The portal is available on our Web site, and it’s linked to our mobile app.

We have seen this service significantly decrease the amount of time we spend issuing certificates. So we have more time for our advisory and more complex servicing activities. An added benefit: Client satisfaction. Our clients appreciate being able to access their policies and print certs and IDs when they need to. We feel the portal gives our clients another reason to remain loyal to us, since we understand the need for certain levels of self-service, and we provide the means to accomplish it.

We also use the portal to post commercial clients’ policies, if they wish. Many of our larger clients want to rely on an always-current electronic copy posted on their portal.

From our experience, we believe an online certificate tool is a valuable part of a commercial agency’s customer service plan. If you’re looking to add online service for your clients, here are a few tips we can offer:

-          Work with a provider that can integrate with your Applied Systems agency management system software. This will save time and keystrokes.

-          Look at all the features available. Don’t settle for a service that offers only cert processing. At our portal, clients can log in and view their policy information, request changes and issue their own certificates.

-          Be sure the portal is seamlessly connected to your agency Web site. That will ensure easy portal access for your clients.

What are your thoughts on providing online service? Do have any tips to add to my list? I would love to read your feedback in the comments section below.

Debra Hoffman, CIC is the IT manager at Watson Insurance in Gastonia, North Carolina.


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Mike Drakulich

Insurance market hardening?

Independent agents have worked valiantly to minimize the impact of the soft market, streamlining operations and ramping up marketing and sales in hopes of at least treading water until conditions improve.

What industry analysts can’t seem to agree on is whether the industry is now in the midst of a recovery. And, if not now, when is it going to come?

Many in the industry think the worst is over. Chief financial officers from property and casualty insurers surveyed by Towers Watson in the Fall said they believed market prices had bottomed out and were beginning to turn upward. Many analysts agree.

Contributing to the upturn: Record losses from natural disasters. Crippling snowstorms, floods, massive tornadoes and drought accounted for 12 separate billion-dollar natural disasters in the United States alone, according to the National Oceanic and Atmospheric Administration.  ISO and the Property Casualty Insurers Association of America calculated losses in the first nine months of 2011 at $34.9 billion compared to $6.3 billion for the same period in 2010.

Some analysts say, however, that despite those losses and rising prices in certain types of coverage, insurers aren’t yet experiencing the leverage to increase prices broadly and thereby harden the market.

Chris Schaper, president of the Montpelier Re Holdings Ltd. unit of Montpelier Reinsurance Ltd., said to Reuters last month that the industry is still assessing, and that it could be another year before the market turns around. Some analysts say the global loss figure, estimated at about $100 billion for 2011, may need to top $150 billion before the market improves.

Are you seeing signs of improvement? Is the property and casualty insurance market improving now, or will it take more time? If time isn’t the issue, what will it take?

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Mike Drakulich

New target for hackers: your printer

If you’ve been in the market for a new printer for your home office recently, you know how advanced they’ve become. They are so full of functionality they are practically computers themselves.

According to a recent study by Columbia University researchers and reported by msnbc.com, they may lack sufficient security to keep hackers at bay. Millions could be vulnerable to attack, the report stated, which can put consumers, businesses and even the government at risk.

According to the report, flaws in printer firmware could allow hackers to remotely control them, from within a network over the Internet. Once reprogrammed, hackers can use printers to attack networks, steal personal information and even cause physical damage.

The report cites Hewlett-Packard LaserJet models as being particularly vulnerable. Columbia researchers Salvatore Stolfo and Ang Cui discovered the Hewlett-Packard LaserJet printers they tested allowed updates remotely. When the researchers tested printers by sending print jobs infected with malicious code, they learned the printers checked to see if a software update was included but didn’t discriminate the update’s source, nor was a digital signature required to verify the update’s authenticity. So a hacker could instruct a printer to erase its operating software and install a new version.

If a printer is configured to accept print jobs from the Internet, the threat is even more insidious because it can be done from anywhere.  In a demonstration, Stolfo and Cui showed how infected code could instruct a printer to heat up its fuser until the paper inside turns brown and begins to smoke. The printer’s thermal switch automatically flipped and prevented a fire.

Anti-virus software isn’t capable of scanning or fixing a printer’s software that runs on embedded chips, the msnbc.com report stated. Tim Sander, Applied Systems‘ vice president of cloud services, said it’s best to not expose devices, no matter how safe they may seem, to a public network like the Internet. “Externally exposed devices should be carefully evaluated and controlled through firewalls and other protective measures,” he said. “The requirement to have them external should be reviewed regularly.”

Hewlett-Packard said this week they are still reviewing the details of the study but dispute the security issue is widespread. A company spokesperson said newer printers do require digital signatures with firmware  upgrades and have so since 2009.

To read more about this issue, click here.

What kind of printers do you have in your office? Have you had any issues with your printer in which you suspect it was infected somehow? If so, how did you resolve them?
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How long has it been since you checked your Facebook page to see who’s commented on your last post? A few minutes? A couple of hours? Facebook, Twitter, LinkedIn and now Google+ have become indispensible tools for communicating personally and professionally.

In the business arena, the insurance industry has embraced social media in getting the word out about products and services. But insurance companies have used social media for even more. They gather data from such sites to investigate claims and fraud. And they may begin to do so for underwriting.

Craig Beattie, an analyst for Celent, the research and consulting firm, said it’s now common for insurance companies to use social media for investigating dubious claims. Scouring individual pages may not be the quickest method of investigation. But companies are doing it nonetheless, he said, and are developing tools to conduct searches more efficiently.

And it’s legal for them to do it. Celent recently released results of a study titled, “Using Social Data in Claims and Underwriting : Creating a Social Risk Profile,” which delves into how insurance companies are using social media data and how consumers and regulators are likely to respond.

If you use Facebook et al, you might not realize what you have consented to in the terms and conditions of the sites’ privacy policies. Essentially, you might be waiving your privacy rights. So as soon as you post a status or photos, it all can be used against you–legally–if there is a claim to be investigated.

But when companies talk about mining data from social networks for underwriting, they’re likely to come under scrutiny for ethical and possibly legal reasons. How much data is a company really getting? Is it quality data and can it really be used for assessing risk and developing pricing? Is it going too far? Beattie said he hasn’t found any insurance companies who do it . . . yet.

What is your opinion? Should companies use social networks for underwriting and/or investigating fraud? Tell us in the comment section below!

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Steven Brown, president of Hoffman Brown Co. in Sherman Oaks, Calif., doesn’t get snow his way. But he had a personal connection to the early snowstorm that blanketed six eastern states with up to two feet of snow late last month. For Brown, the storm served as a powerful reminder of how businesses can be hamstrung by natural disasters.

Brown talked with Michael P. Voelker of Property Casualty 360, a National Underwriter website, for the magazine’s November 14 issue about Hoffman Brown’s migration in early 2010 from a legacy agency management system to Applied Systems EpicOnline. This year’s early snowstorm underscored many of the reasons Brown went to the cloud with his agency management software.

“My daughter is in college on the East Coast,” Brown said. “Listening to her talk firsthand about how [the storm] impacted her and the businesses in the area confirmed how important it is that we take the right [preparations] in our company in terms of accessibility and disaster recovery.”

While snow had never been an issue for Hoffman Brown, the agency had been affected by three earthquakes that damaged highways and prevented access to the office. Now, he values EpicOnline because he and his staff have access to the system wherever there is an Internet connection.

Read all of Brown’s interview and the entire article. Have you made the switch to an online version of your agency management system? How has the change benefitted you and your business? If you haven’t made the switch, what is holding you back? Tell us in the comment section below!


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What lies ahead for Applied Systems users and agency technology in general? Three weeks after taking the helm as Applied Systems chief executive officer, Reid French talked with Insurance Journal‘s Andy Simpson about the role he thinks Applied Systems will play in the agency and brokerage of the future.

He also talked about the choices agents are making in today’s environment of increasing mobility and heightened consumer expectations.

What about expanding Applied Systems’ user base beyond the borders of the United States and Canada? Based on French’s long-term vision for the company and the value-add services Applied Systems will continue to deliver, the CEO anticipates eventual growth opportunities in more Commonwealth countries.

And will Applied Systems stay true to its history of growth through product development, or does last year’s purchase of Artizan Internet Services signal a new acquisition trend?

“Good software companies, ultimately, are both innovative and acquisitive,” French said. “I hope you will find if we fast forward five years that Applied was successful in doing both.”

Hear more of French’s vision in the full podcast interview:

 

What are your thoughts on what agents and carriers will expect of technology as they run their businesses in the future? Share your thoughts in the comment section below.

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Sheryl Feminis

Healthy indicators for 2012?

Just as economic gloom threatens to spill into another year, there are glimmers of hope.

According to the just-released update to the current Best Practices Study published by the Big I and Reagan Consulting:

  • Top-performing agencies have grown and maintained steady levels of profitability in 2011.
  • Smaller agencies reported flat growth when compared to 2010 results, while larger agencies reported improvement.

Study participants say they made progress by focusing on total account development, increasing advertising and/or marketing, and employing producer development strategies. They also benefited from new cost-cutting measures.

Further, a Novarica survey of 132 technology department heads at P&C and life/annuities carriers shows that most insurance companies plan to increase their IT spending budgets in 2012. On average, small P&C carriers (less than $100 million in premium) plan the highest IT budgets as a percentage of premium.

“U.S. Insurer IT Budgets and Projects for 2012,” a report on the survey, says consumer expectations are driving many insurance company priorities. Like agencies, insurance companies will continue to trim expenses. But, the survey shows, those companies know they must invest in IT-enabled capabilities because they are driven by increased consumer demand for communications, business intelligence and speed to market.

Do you see signs of a healthier insurance market in 2012?

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