Celent Model Insurer 2010: Case Studies of Effective Technology in Insurance

by Michael Fitzgerald, January 26, 2010
Insurance > Life > Life-Health Insurance
Insurance > Life > Misc
Insurance > Property-Casualty > Misc
Insurance > Property-Casualty > Property-Casualty Insurance

Abstract

Twenty-seven Model Insurer Components are described in this fourth annual edition, and Celent’s Model Insurer of the Year is named.

In a new report, Celent Model Insurer 2010: Case Studies of Effective Technology Use in Insurance, Celent recognizes 27 insurance technology initiatives as “Model Insurer Components.” The report also names Missouri Employers Mutual Insurance the Model Insurer of the Year. These best practices in the use of technology span key areas of the product and policyholder life cycle, including product definition, distribution, underwriting, policy administration, service, claims, and infrastructure. The report also reviews IT best practices and measurable business results used in evaluating the Model Insurer Components.

“One common theme for many of the projects profiled in this year’s report is the emphasis on top-line growth,” says Mike Fitzgerald, senior analyst with Celent’s Insurance group and author of the report. “Insurers are looking to technology to enter new markets, or to address new segments within existing ones.”

Model Insurer Components 2010
  • Allianz Life Insurance Company of North America: Using technology to attract new distribution partners
  • American Modern Insurance Group: Replacing a legacy platform in a budget-neutral manner
  • Atava - RSA Scandinavia: Combining the scale of a traditional company with the flexibility of a startup to build a new proposition
  • AVIVA-COFCO Life Insurance Company, LTD: Realizing internal and external business value through data standards
  • Calliden Group Limited: Consolidating multiple systems to a modern platform which enables growth in a startup operation
  • Capitol Insurance Companies: Bringing work processes in line with the expense structure of a book of business
  • Church Pension Group: Changing a legacy platform to self-service in order to realize a business vision
  • Erie Insurance Group: Tying together all parts of the insurance value chain
  • Erie Insurance Group: Increasing speed to market and decreasing expenses using an external rating engine
  • Esurance: Implementing self-service claims with vendor technology while retaining company-specific branding/look and feel
  • Farmers Insurance: Using data to drive distribution strategy and tactics
  • FBL Financial Group, Inc: Supporting a startup business with necessary automation without incurring all costs of a traditional support structure
  • Harford Mutual: Using multiple technology solutions to increase ease of use for independent agents
  • Hertz Europe: Transforming a business model with technology
  • Highmark: Discovering fraud that cannot be seen
  • Kansas City Life Insurance Company: Using ECM to modernize applications across multiple processes
  • Liberty Mutual Agency Markets: Changing product development from a reactive to a proactive process to support business growth
  • LV=: Using a standard presentation layer across the business to increase online channel revenue from multiple lines of business
  • Missouri Employers Mutual Insurance Company: Transformational change
  • Nationwide Insurance: Using technology to rapidly enter a new market with premium service requirements
  • PMI Group: Using an advanced testing utility to improve system delivery and business results
  • Suncorp: Supporting a segmentation approach to the market
  • The Cincinnati Specialty Underwriters Insurance Company: Leveraging a previous implementation in order to enter a new market quickly
  • The Hartford Financial Services: Bringing order to multiple, aging systems that support a critical, highly regulated process
  • The Phoenix Companies: Consolidating multiple systems into a single front end in order to increase efficiency and improve customer service
  • Tokio Marine & Nichido Fire Insurance Co., Ltd.: Overcoming critical challenges in a complex project
  • Unitrin Direct Auto and Home Insurance: Using business process management to modernize applications across multiple processes
  • Zurich Financial Services: Standardizing process and technology on a regional basis in a manner that allows for local differences

Nominations were accepted throughout 2009, and the Celent insurance team selected the 28 winning initiatives based on the business benefits provided. Each Model Insurer Component is described in a brief write-up within the report, including detailed descriptions of business drivers, technology environments, and quantitative success metrics.

Nominations for the 2011 report will be accepted throughout the year and may be submitted by carriers or their software vendor partners. For more information, please click here.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (New York)
Dana Greenstein
dgreenstein@celent.com
Tel.: +1 646 364 8254

Europe (Stockholm)
Nick Bockh
nbockh@celent.com
Tel.: +46.8.650.4401

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3500.3023

Table of Contents

Executive Summary

3

Introduction

5

Common Best Practices and Results

8

Model Insurer Components 2010

18

Claims

20

 

Esurance

20

 

Hertz Europe

22

 

Highmark

24

Distribution Management

25

 

Allianz Life Insurance Company of North America

25

 

AVIVA-COFCO Life Insurance Co., LTD

27

 

Erie Insurance Group

28

 

Farmers Insurance

30

 

FBL Financial Group

31

 

Harford Mutual Insurance Company

32

Infrastructure/Architecture

34

 

Kansas City Life Insurance Company

34

 

LV=

35

 

The Phoenix Companies

36

 

Unitrin Direct

37

IT Management

40

 

Atava, RSA Scandinavia

40

 

PMI Group

41

 

Tokio Marine & Nichido Fire Insurance Co., Ltd

43

 

Zurich Financial Services

45

Policy Administration

47

 

American Modern Insurance Group

47

 

The Cincinnati Specialty Underwriters Insurance Company

49

 

Calliden Group Limited

50

Product Design and Development / Rating

52

 

Erie Insurance

52

 

Liberty Mutual Agency Markets

54

 

Suncorp

55

Service

57

 

The Church Pension Group

57

 

Nationwide

59

 

The Hartford Financial Services Group, Inc.

60

Underwriting

63

 

Capitol Insurance Companies

63

Model Insurer of the Year 2010

65

Conclusion

73

Leveraging Celent’s Expertise

74

Related Celent Research

76