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Discussion:  Re: Disabilty Insurance    
Posted by Lawrence B. Keller, CLU, ChFC on 09/16/2005

As you already know, Berkshire (Guardian) would offer her an additional $5,000 month with a true "Own-Occupation" definition of disabiltiy for five years, Modified "Own-Occupation" thereafter.

Standard Insurance Company (Portland, OR) would normally issue a policy with a true "Own-Occupation" definition of disability to age 67 (based on her age of 40). However, at this point they only issue and participate up to $10,000 month on an individual basis.

Therefore, at this time, they would not allow her to purchase any additional coverage. That being said, they have recently introduced a new policy series (The Protector+) that will participate up to $15,000 with another company (or companies) on an individual basis. However, it has not yet been approved in Tennesse but should be in the future (for your sake, hopefully the near future).

Your other choice would be to use MetLife's policy which can be purchased with a "Transitional Your Occupation" defintion of disabiltiy.

This would allow her to work in another occupation with no disability benefit offset until her DI benefits from NML plus MetLife plus her new occupation exceeds her prior income.

Simply put, if she earns $600K and would receive $180K form NML and MetLife, she could earn up to an additional $420K in another occupation and still receive her full disabiltiy benefits. I'm not sure if the rider is approved in TN but could check it out for you on Monday.

Finally, she might also consider a policy with a Modified "Own-Occuaption" defintion like Principal's. The more she earns, the more it acts like an "Own-Occ" policy. If she has a loss of 75% or more of her income, she would receive full benefits anyway. You might want to ask her if she can no longer perform surgery, what other job can she do that would allow her to earn anything close to $600K. Berkshire's policy is still better, but also more expensive.

The Lloyd's policy is a good idea as it would allow her to purchase up to a total of 65% of her income in conjunction with other DI companies. However, she should buy more traditional coverage first - as if she doed not, other companies will look a that coverage and eill not issue her any additional traditional coverage.

Hope this helps. If you want to talk, feel free to call me at 516-677-6211 and I can give you more detailed explanations and share some other ideas with you.

Larry

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Thomas McLaren
Lead Systems Analyst
IT Business Solutions
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Book reviews: Everything is Miscellaneous

Most Helpful Customer Reviews
Deceptively deep, May 3, 2007
By      Ethan Zuckerman
One of the central ironies of David Weinberger's new book, "Everything is Miscellaneous", is that a book about classification is bound to suffer from classification problems. Reviewers and bookstore owners are inclined to think of David as a business writer because his previous books - The Cluetrain Manifesto and Small Pieces Loosely Joined - were profoundly useful in helping businesspeople understand what this World Wide Web thing was really all about. But it's a mistake to consider David's new book solely as a business book.

Which isn't to say that reading Everything is Miscellaneous won't help you make a buck in world of Web 2.0. It probably will, as the issues Weinberger explores are core to any business that deals with information and knowledge... which is to say, virtually every industry you can think of. But "Everything is Miscellaneous" is also a philosophy book. It's about the shape of knowledge, and how moving information from paper to the web changes how we organize and how we think. And this means that Weinberger's book crosses from territory like Wikipedia and Flickr into Aristotle and Wittgenstein.

This would be a dangerous path for a lesser author to take, but David grounds his explorations in examples and interviews that are, as Cory Doctorow puts it, wonderfully miscellaneous. We bounce between the lives and ideas of taxonomers past - Linneaus, S.R. Ranganathan, and the wonderfully strange Melvil Dewi - and the librarians and software developers who are making sense of today's digital disorder.

At its heart, the book is about what happens when we liberate knowledge from the world of atoms. In the physical world, we can only organize books on a shelf in one way or another - books can't be in multiple places at once. Frequently we find ourselves reduced to ordering information in arbitrary ways as a result - AAAAA Towing Service gets more business through the phonebook than Mike's Wreckers through the unfairness of alphabetization.

Adding a layer of metadata to the physical world helps somewhat - card catalogs allow us to put multiple pointers to a single physical location so we can file a single book on Military Music under both "Music" and "Military". But card catalogs pale in comparison to the wonders of "third-order" metadata, the sorts of organization we're capable of in a digital age. A book listed by Amazon can be filed in any number of categories. It can be annotated with reader reviews, added to reading lists, enhanced with tags or statistically improbable phrases. The "card" in the card catalog can be larger than the book itself, and the full text of the book serves as metadata, as the book itself is searchable.

Weinberger argues that the fact that we tend to organize data in terms of its physical placement has consequences for how knowledge works. We tend to think in Aristotelian terms - objects are members of a categories, and share the same traits as other members of that category. We can organize these categories into trees: a robin is a bird, which is an animal. We can expect the leaves of trees to share the attributes of their branches, and we expect each leaf to fit onto only one, specific branch.

But that's not knowledge works in a digital age. When I bookmark a [...] it's to my benefit to add many tags to it, both because it makes it easier for me to find it again, and because it helps other people find it as well. Weinberger advises us to "put each leaf on as many branches as possible", building a tree that looks more like a hyperlinked pile of leaves.

This suggestion, along with advice to use everything as a label, to filter only when we need outputs, and to give up the idea that there's a "right way" to order things, serve as a roadmap for how to build tools and services in a digital age. But the magic of Weinberger's book is that this practical advice is also an invitation to explore categorization, language and knowledge itself. If knowledge is a pile of leaves instead of a tree, how does the shape of our knowledge change?

It's questions like this that make "Everything is Miscellaneous" deceptively deep. One moment, we're thinking about how we organize photographs in shoeboxes or on our hard drives, and a moment later we're asking whether we understand "shoebox" in terms of definitions, family resemblances or exemplars. It's a little like drinking a mojito - smooth going down, but deceptively powerful, and slightly staggering when you get up to buy the next round.

I've read the book twice now, and am looking to my third pass through it. Weinberger has done something rare and admirable here - he's written about a world I thought I knew well in a way that makes me realize that there are innumerable depths and implications left to explore.

From Aristotle to Del.icio.us, June 17, 2007
By      K. Sampanthar "Inventor of ThinkCube" (Boston, MA) 

As other reviewers have mentioned David Weinberger's new book is a hard book to categorize, which is also the irony, since it's central premise is about categorizing information. I place this book in the company of other books about the internet and information; Ambient Findability - Peter Morville, Wikinomics - Don Tapscott, Wealth of Networks - Yochai Benkler. To me it's about the changes wrought by current trends on the internet. Weinberger is deeply familiar with internet and all it's implications, since he is one of the original authors of Cluetrain Manifesto which was probably the first book to outline the game changing nature of the internet. Here he tackles how to cope with the seeming chaos of digital information that we are deluged with.

This is a thought provoking book and will make you look at organizing information in a different way. It will help you understand some of the current trends on the internet and put it into historical context.

Audience
I highly recommend this book for anyone who is interested in internet trends especially as it relates to organizing information. If you are at all interested in the history of information and how we as humans have struggled to come to terms with the world, then this book is one of the best I have come across. It is well written and a pleasure to read.

Details
David Weinberger, internet visionary, has again synthesized an intellectual romp through another important topic - Information. We, humans, are obsessed with defining, categorizing /and organizing information as our way of bringing some order to the chaotic world we live in.
Weinberger explores our obsession with information from Plato and Aristotle to our modern-day digital explosion of information.
He frames this exploration by defining 3 orders of organizing information:

1) 1st Order organization is of the physical world, manipulating physical objects and organizing them,
2) 2nd Order of organization is the use of metadata to organize and categorize physical objects i.e. library card catalogs. This is still limited by physical constraints.
3) 3rd Order of organization is the world we live in today, as we move from the physical to the digital, organizing information becomes freed from physical constraints allows us to simultaneously define, categorize and organize information into a million different taxonomies.

The 1st and 2nd orders of organization are covered as Weinberger explores the history of our obsession with categorizing information; from Plato's `Joints of Nature', to Aristotle's `Trees of Knowledge'. We have been lumping and splitting information for thousands of years. Until recently we have been constrained by the laws of physics, it is hard for objects to be in two places. It is also hard to categorize the real world into orderly taxonomies i.e. what category does a duck-billed-platypus fit into?

The 3rd order organization is what Weinberger is referring to in his title, `Everything is Miscellaneous'. In a world where we can organize information any way we want, nothing needs to be categorized per-se and everything can live in a state of limbo in the miscellaneous category until we need it and then, and only then, does it need to be grouped, filtered, sorted for our immediate consumption.

The 3rd order world has freed information and people to categorize information anyway they want. It is no longer an academic exercise to come up with taxonomies. With tools like Digg, del.icio.us, Flickr etc. we slice and dice the world of information to our personal needs.

Understanding this digital disorder we live in and how we cope is the ultimate point of this book. True to form, Weinberger has given us a wealth of information to ultimately understand where we are today and how to build the tools to cope in the future.

Key Take-Aways
You will come away from this book understanding the following:
- Our historical struggle to organize information from the physical to the digital
- That we live in a new reality where information is freed from its physical constraints.
- The world of information is now available to all of us and can now be organized any way we want.

Summary
If you enjoyed any of Weinberger's previous books (Cluetrain Manifesto, Small Pieces Loosely Joined) you will not be disappointed. This is a pleasure to read and will make you think - my two most important attributes when it comes to books. I would highly recommend this book to anyone interested in information and the current trends on the internet. Weinberger has been right on the money with his observations of the internet and this book is no different; organizing information in the age of the internet is an important subject. Read why there is more to information than search alone.

Kes Sampanthar
Inventor of ThinkCube

The way of the (Virtual) World, May 4, 2007
By      Miles Kehoe (Cupertino, CA)
With a background in enterprise search, I'm inclined to think of David's book as required reading for those who doubt how vital meta-data and community tagging is to quality corporate search. In reality, it's about meta-data.

As other reviewers have mentioned, the book is about moving organization and retrieval of content - physical and virtual - from atoms to electrons. Office supply stores, libraries, and daily life are all limited by atoms: how much space there is in a store; what products should be displayed near other products; and what single specific shelf should a new book occupy given the Dewey Decimal system categorization.

In our increasingly virtual world, based on electrons, little of this matters - fax/copying/printer/scanners can be 'stored' under all of those categories, or a new book can be tagged with every possible related term, regardless of what category the librarian suggests. Web 2.0, Flickr, Wikipedia, Enterprise Search 2.0, all of our virtual worlds, will allow us to tag everything in any way that will help us find it again. And we can make it even better by opening the tagging up to a wider audience - friends, co-workers, even strangers - consider Amazon's suggestion system.

The book is a masterpiece and is a must-read for anyone involved in using - or designing - any part of our virtual and future world(s).

 

Corp Strategy: Making most of hidden assets

A good book that stands on its own, October 10, 2007
By      M. McDonald (Chicago, IL United States) -
Normally the third book in a series either rehashes the prior two books, or requires that you read all three to understand the authors points. Unstoppable is unique in this regard as the book stands on its own and does not require you to read the other books.

Zook talks in depth about how enterprises can find source of growth from the core of their company either by finding hidden assets, customers or capabilities. The strength of this book is its detailed discussion of each of these sources of growth from the core and extending the core. Zook also provides detailed tools to help the reader apply these ideas to their company. This is particularly unique in a book that addresses issues of growth and growth strategy.

In some ways, Zook's book should be used as a companion to the book "BLUE OCEAN STRATEGY" which talks about identifying opportunities where there are no competitors. Used in combination, Blue Ocean will open up new possibilities, while Unstoppable will provide a way to execute on these opportunities and build off of your core to achieve them.

The book is clearly written with detailed case studies and verbatims form actual companies going through their growth processes. This is unique for any business book and Zook's use of extensive interview comments makes the book seem real and actionable rather than academic.

While Zook's book is well researched, there is a subtle and important bias in the research. Zook's results and statistics are largely based on analyzing projects that he and his company have conducted, rather than looking at the general marketplace. This is strength in that the book can talk about implementation details because they did the work. However, it is a subtle weakness in that the cases suffer from selection bias that has a tendency to color the results and conclusions. Zook's attention to detail, pragmatism, and exposing tools do compensate for this research weakness and for most it will not matter, but recognize that it is there.

Overall, I would recommend this book for any executive who is looking to change their enterprise or recognize the need to do more in order to grow. This is one of the top 10 business books I have read so far this year so highly recommended.

Important information on how to continue to survive over the long haul..., June 3, 2007
By      Thomas Duff "Duffbert" (Portland, OR United States) -
Nothing stays the same in the business world, and even successful businesses will face their own demise if they are not thinking ahead to their next "core" business. Chris Zook examines this redefinition of business in the book Unstoppable: Finding Hidden Assets to Renew the Core and Fuel Profitable Growth. This is an important book for all businesses, especially those who think they're on top of the curve right now...

Contents:
Unsustainable to Unstoppable; When to Redefine the Core; Undervalued Business Platforms; Untapped Customer Insights; Underutilized Capabilities; Managing Through the Growth Cycle; Appendix; Notes; Bibliography; Index; About the Author

When a company is trying to redefine their core, often they'll do one of three things. They'll either commit ever more deeply to what they currently do, they'll move into an area where they have no experience, or they'll merge with some other group to form a new mega-power. But Zook shows through research that each of those moves has a very small chance of success over the long term. The odds are much better when companies examine what they already have, and then map out how to leverage those hidden assets. They often fall into the categories of undervalued business platforms, unexploited customer assets, or underutilized capabilities. By moving in these areas where you already have traction, the company can be redefined to meet the next growth period. Zook has plenty of case study examples to back up his premise. PerkinElmer went from precision optics to genetic research using a small niche subsidiary they had. American Express took their massive data assets and redefined how they catered to customers. These and many other stories help to flesh out an important message... Change is inevitable, and it's best to be out in front of it, rather than playing catch-up in survival mode.

I can't think of too many businesses that wouldn't benefit from a structured examination of what they do and where things are going. Even if you don't feel you need to change right now, it's important to be thinking along those lines. That time *will* come, regardless of whether you want it to or not...

Pogo was right., June 18, 2007
By      Robert Morris (Dallas, Texas) -               

In two previously published books, Profit from the Core (2001) and then Beyond the Core (2004), Chris Zook shares what several years of extensive and intensive research revealed about "how companies fail to recognize the potential of their core business and, as a result, prematurely abandon it in pursuit of hot markets or sexy new ideas, only to realize their error - often, when it is too late." He suggests a systematic way for organizations to assess their full potential and to make certain, also, that they do not fall into "this common, and typically human, trap."

In this volume, Zook draws upon an even wider and deeper wealth of research sources that include about fifty interviews, mostly of CEOs. The title is explained by the fact that he and his associates chose to study most closely those companies "that beat the odds. We also analyzed patterns of failure and estimated the odds of success offered by various paths in various situations." He goes on to observe that all of the success stories built their renewal on their "hidden assets" that had been previously been undervalued, unrecognized, and/or underutilized. "These assets were not central to the strategy of the past, but they held the key to the future. Furthermore, the older and more complex the company, the greater was the likelihood of finding promising hidden assets." In other words, many companies already "hold most of the cards for "a winning hand" but do not realize it.

I highly recommend all three of Zook's books because, together, they answer three separate but related, and critically important questions:

1. How to define and grow an organization's core assets? (Profit from the Core)
2. How to expand its boundaries into new territory? (Beyond the Core)
3. How to redefine and renew its core? (Unstoppable)

No company is forever "unstoppable" but most (if not all) companies can take full advantage of the information and counsel Zook provides in this book to find correct answers to all three of these questions achieve core renewal without "leaps to distant and hot new markets, ...being the first adopter of a pioneering new strategy,...[or making] as `big bang' acquisition." In fact, unless a given organization has "beaten the odds" by sustaining profitable growth, it should first define or redefine its core assets and then grow or renew them, before committing any resources to organizational and/or territorial expansion.

Zook is to be commended on the care with which he defines various terms. For example, undervalued business platforms "that might have once been secondary in importance but now have the potential to be the foundation for a new major core business"(e.g. IBM's Global Services Group). Also unexploited customer assets that tend to exist in three primary forms: "knowledge gathered as part of serving the customer but that, over time, accumulates an inherently greater value of its own...a unique position of trust of relationship with a set of customers [that gives] much more access and influence than has been recognized (e.g. American Express and Harman International). And finally, underutilized capabilities ("the most difficult hidden asset to discern but no less powerful") that result in losses of position to competitors in terms of cost, speed, logistics, design, and quality of customer service (e.g. the United States Postal Service's inability to invest as much as FedEx and UPS in system upgrades). "At the root of such competitive reversals we often find a yawning capability gap that was undetected, dismissed, or ignored."

I especially appreciate Zook's skillful use of various reader-friendly devices such as check-lists that focus on key points covered within a chapter: "Seven Steps to Redefining Your Core" (pages 24-25), a "State of the Core Diagnostic" (Figure 2-3 on Page 44), "Detecting Undervalued Business Platforms" (Pages 82 and 83), "Identifying Hidden Customer Assets" (Page 115), "Defining Your Core Capabilities" (Page 140), and "Ten Principles of Core Growth and Redefinition" (Page158). These and other check-lists facilitate, indeed expedite frequent review of key points later.

Although hidden assets are the "real key" to redefinition and capabilities are "the building blocks of renewal," and I agree with Zook that they are, it is important to keep in mind that transformation and renewal initiatives should never end. Zook asserts that "the real focus of business should be external - on competitors, shifts in technology, and customer dynamics." However, ironically, for many companies now searching for profitable growth, some "of their most challenging demons are internal" and their "most difficult foes" are often themselves. Unless they identify and then leverage the hidden assets they already have or to which they have easy access, they will either be out-of-business or acquired by another company within the next ten years.

Source: http://www.amazon.com/Unstoppable-Finding-Hidden-Assets-Profitable/dp/1422103668/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1195591255&sr=1-1

MetLife Expands Distribution of Deferred Income Annuity
Rebecca Moore – 12/11/2007
MetLife has renamed its Personal Income Builder deferred income annuity to Longevity Income Guarantee (LIG), and has made it available through MetLife Investors, the company’s independent distribution arm.

LIG is designed to help clients maximize, protect, and guarantee income for life in retirement, MetLife said in a news release. Lisa S. Kuklinski, vice president and actuary, Individual Annuities, MetLife, said incorporating longevity in the name was to more closely align the solution to the risk offset in people’s minds.

LIG is available in two versions – Flexible Access Version (FAV) and Maximum Income Version (MIV), and either version can be funded through a lump-sum payment or incremental purchase payments (a minimum of $2,500 initial purchase payment with $500 subsequent payments).

The Flexible Access Version offers a death benefit to named beneficiaries should the owner die before taking the LIG income. Beneficiaries will receive a death benefit equal to purchase payments compounded at 3% annually.

The FAV also includes current income options to suit individual needs, such as payments for life and that of a spouse or partner, or payments for life guaranteed for a specified number of years, in addition to liquidity in the form of a one-time partial or full withdrawal from the contract within 60 days following the income start date, according to the announcement. The income option can be selected when income starts, and is not locked in on the issue date.

The product also offers clients the option of beginning to take income between age 50 to 85 after a two-year waiting period. Like the income option, the income start date is not locked in on the issue date. The client can start income whenever the need arises, subject to the above constraints.

The Maximum Income Version contrarily, does not offer a flexible start date, death benefit, or liquidity, and is an option for individuals who can meet their retirement needs before age 85, but do not need a death benefit or a flexible withdrawal option within their annuity contract. Future income payments are based on annuity purchase rates available on the day a client makes a purchase payment into LIG.

Elizabeth M. Forget, senior vice president, MetLife, responsible for marketing and product management for MetLife Investors, said in the release: “LIG is an exciting addition to our suite of annuity offerings to third party distributors, because it offers clients the ability to ‘buy’ guaranteed lifetime income today that will begin at a certain date in the future. Knowing how much income they’ll receive and when they’ll receive it helps clients establish an income planning time horizon so they know how long their assets need to last. This can help clients and their advisers plan more efficiently.”

 

IRA assets in 2006 exploded to $4.23T up from $3.63T in 2005 = mostly from rolloever from Retirement Plans

ROLL "PLAY." A new study finds IRA growth continues to be fueled by rollovers from employer retirement plans - about $200 billion annually – with new IRA contributions significantly smaller by comparison. A news release from the Employee Benefit Research Institute (EBRI) said IRA assets exploded in 2006 with a whopping 16.5% hike to a record $4.23 trillion - up from $3.63 trillion in 2005. That 2006 performance gave more weight to the notion that IRAs are now the largest repository of U.S. retirement funds, according to EBRI. MORE

 

User Experience

Updated: 8/31/2007
Wellness
Press Clips
Study: Insurers Need to Focus on Customer Experience
August 27, 2007 — Armonk, N.Y. — U.S. consumers want insurance companies to more effectively communicate new products and services available to them, provide customized policies to better meet their needs and bring their customer experience up to par with other industries, according to an IBM study of more than 3,000 P&C insurance policyholders. Yet, despite boasting one of the largest demographics of loyal and satisfied customers of any industry, few insurance companies are looking for new and innovative ways to connect with their customers to enhance their experience and drive organic growth.

Fewer than half of the policyholders polled are informed about new products and services by their providers. Additionally, only 43% of policyholders said their insurance companies customizes policies to meet their specific needs.

Andrea Eichhorn, GBS, associate partner in IBM's financial services customer focus strategy team suggests providing customers with more information online. "Maybe provide some Internet access-for when the customer is checking prices-that clearly explains what the different options are and how they can tailor the products to meet their needs," she says, "because, I think many people buy insurance blindly."

The study, "Surviving Climate Change in the Property and Casualty Industry By Growing Customer Advocacy," also demonstrates a widening gap between insurance customer demographics, product offerings and distribution channels. Younger policyholders are increasingly price sensitive and technology-savvy, and are more likely than other demographics to access a variety of distribution channels including the Internet and Web 2.0 technologies such as mobile text and instant messaging. Baby boomers are accustomed to more traditional insurance channels and are redefining the market as they age, forcing insurance companies to accommodate their varied needs and develop customized products that can be offered across multiple channels.

"Insurance providers can no longer follow the 'one-size-fits-all' approach to product offerings and channel distribution and expect to remain competitive," says Bill Busby, partner, IBM's Global Business Services, Americas insurance leader. "Younger customers want fast and easy transactions with little or no human interaction, while older customers continue to value a high touch experience and demand higher levels of service and quality. Meanwhile, customers across the board want their providers to offer more flexible products and deliver a greater degree of personalized service."

Insurers can more easily decide which services and products are best for their customers by using technology to capture customer data at the point of interaction, says Eichhorn. "Insurers can capture more feedback and provide more avenues and venues for policyholders to provide input on product development and product needs," she says.

As part of the study, IBM tested a new measure of customer loyalty, the Customer Focused Insight Quotient (CFiq) to drive the quantification of key interactions on policyholders perspectives and attitudes. Unlike other satisfaction or promoter measures, the CFiq goes beyond a single measure of satisfaction by combining policyholders ratings of three statements to obtain a more predictive and commercially viable view of advocacy:

• I would recommend their insurance company to others.
• I would consider my insurance company first for future insurance products.
• I would stay with my insurer if offered competitive insurance products from other insurers.

More than half of insurance policy holders (51%) surveyed strongly agreed with these statements and are considered advocates. This number is relatively healthy compared to other industries, such as banking or retail where only one in four customers is an advocate. Beyond their clear value as referrers and credible promoters, they deliver better financially. For example, advocates have 22% more products and trust their insurance companies 98% greater than low-value policyholders or antagonists. Advocates also tend to be long-time policyholders, with more of them staying more than 10 years with their insurance companies, nearly double the amount of antagonists. This result means more premiums are collected and sales investments can be more effectively managed.

Future success in the insurance industry will depend upon creating and delivering a compelling customer experience, according to the survey. Insurers need to begin to build a basic foundation that enables them to move to a more customer-focused enterprise that increases the relevance and attractiveness of products and services to policyholders. Specifically, the study lists five key areas for insurers to consider:

• Build a deeper understanding of the policyholder. Create or repurpose customer research to capture and analyze customer data from key interactions across the policyholder experience.
• Design customer experiences based on customer expectations and perceptions of operational performance. Use policyholder advocacy data to drive improvements to key front-office interactions and customer metrics to measure targeted improvements.
• Communicate and transact with customers intelligently during key interactions, on a customer-by-customer basis. Encourage customers to provide feedback and reward them for sharing information through personalized service, relevant offers and recognition.
• Improve the coordination and key activities across the delivery channel to improve effectiveness and quality of the overall policyholder experience. Provide agent- and direct-based channels with real-time access to key customer data to increase visibility into customer needs and wants.
• Increase policyholder involvement in the development and customization of insurance products. Collaborate with both advocates and antagonists (i.e., internet surveys, blogs, "Customer Jams" etc.) in the development and testing of products and services.

"Everyone's been focusing on cost reduction for a long time now," Eichhorn says. "But it's time to make a slight shift; keep reducing costs, but use some of the savings to improve the customer experience for the areas where we want to grow."

Insurers must find ways to intelligently evolve and differentiate their business by understanding and incorporating advocacy to enhance the policyholder's experiences, according to the study. Continued reliance on traditional competitive levers will contribute to a slow erosion of business value and contribution for today's leading insurance providers.

"The financial services industry is really starting to pick up on the importance of focusing on the customer experience," Eichhorn says, because consumers view the insurance transaction as a transaction, not necessarily an insurance transaction. "They expect the experience to be much like their experience of shopping at their favorite Web site."

To get a copy of the study, visit http://www.ibm.com/services/us/index.wss/ibvstudy/gbs/a1028725.
Source: IBM

.............................
   Thomas McLaren
   Lead Systems Analyst
   Standard Insurance Company
   Desk:   971-321-6153
   Mobile: 503-309-2555
 

 

M&As Drive Innovation: First Notice Systems and SurePlan deals broaden Innovation Group’s offerings and expand its BPO footprint in North America.

http://www.insurancetech.com/news/showArticle.jhtml;jsessionid=4CLTDMBD5VHJWQSNDLRCKHSCJUNN2JVN?articleID=196602091

By Anthony O'Donnell
Insurance & Technology
December 06, 2006

Seeking to expand its offerings to North American customers, Innovation Group (Hartford/Whitely, U.K.) in November acquired claim-reporting outsourcing software and services provider First Notice Systems (Boston) and SurePlan International Pty Ltd., an Australia-based holding company that owns 51 percent of SurePlan USA, a provider of outsourced claims management services to the vehicle leasing and fleet industry. Innovation Group had already acquired another subsidiary, SurePlan Australian Pty Ltd., in May.

The acquisitions position Innovation Group for a significant expansion of its presence in the United States market for business process outsourcing (BPO) for claims and related services, according to Donald Light, a San Francisco-based analyst with Celent. "These two acquisitions give Innovation Group a significant footprint today and potentially a platform for expanding the range of BPO services it provides to insurers, TPAs and self-insured companies," he says.

Expanded Offerings

Innovation Group purchased First Notice, described by Light as a leader in developing technology and services to take the first notice of loss (FNOL) from policyholders to spark quick and accurate claims handling, from Concentra Operating Corporation for $51.55 million in cash, comprising consideration of $50 million and related payments of $1.55 million, according to an Innovation Group source. The deal is expected to close by the end of the fourth quarter of 2006. SurePlan did not disclose the terms of its deal.

"The ability to provide BPO capability to North American customers like we do in other markets has been [a top priority] for the past couple of years, but we needed the credibility and customer performance in this market to do it," says Ed Ossie, president, Innovation Group.

That credibility has been built over the past couple of years by what Ossie describes as "improving equity and meaning with key customers." He cites a 24 percent organic growth year over year, which the company has forecast to continue in predictive statements. "On the heels of success we're able to expand and do a little more to achieve a critical mass," Ossie comments.

The primary impetus for the acquisitions was to provide customer options, says Ossie: "Our customers are making choices every day, and we need to be in a position to provide them choices to engage with us, whether that's through a policy admin system or some support around FNOL during times of overflow or catastrophe. If you're thin and only do a few things, you're going to strain to develop deeper relationships with your customers."

The additions of First Notice Systems and SurePlan's U.S. operation, Ossie adds, "provide us with complete motor claim outsourcing capability for personal, commercial and self-insured or fleet."

IBM study: Customer Service, Multi-Channel Distribution Could Help Insurers Mantain High Levels of Customer Loyalty

http://www.insurancetech.com/news/showArticle.jhtml?articleID=201802732

A new study from the IBM Institute for Business Value indicates that insurers need to enhance customer service and distribution channels to maintain their high levels of customer loyalty.
By Nathan Conz
Insurance & Technology
August 28, 2007

A recent survey conducted by the IBM (Armonk, N.Y.) Institute for Business Value has found that P&C insurers have highly loyal customer bases, especially when compared to other areas of financial services, but that they'll need to improve multi-channel distribution efforts and customer service levels if they want customers in younger age demographics to become loyal as well.

The results of the 3,020-policyholder survey were released on Monday in "Surviving climate change in the property & casualty industry by growing customer advocacy." The survey results showed that 51 percent of policyholders could be considered "advocates" for their insurance carrier, using the Customer Focused Insight Quotient (CFiq). Meanwhile, banking, another industry looked at in similar IBM study, only demonstrated a 24 percent advocacy rate.

The CFiq is a new metric from IBM that considers customers as "advocates" if they would a.) recommend their company to others, b.) consider their current company first for future products and c.) stay with their current company if offered competitive products elsewhere.

While just over half of policyholders surveyed strongly agreed with all three of those aforementioned statements, study co-author Robert Heffernan, an associate partner and CRM Global Leader at the IBM Institute for Business Value, points out that a majority of advocates come from older demographics. When you remove older policyholders -- who are most likely to prefer a traditional delivery and service model -- from the equation, Heffernan says that the insurance industry's advocacy rate drops to around 25-percent.

"The bottom line is insurers are looking good now when compared to different industries, but they really need to take a look at how they view younger segments. [They need to be] moving towards more direct channels or at least laying that foundation, and they need to understand what younger customers want and what they're going to value online," Heffernan says.

The aim of the CFiq metric is to roll a few common customer service metrics into one -- providing a better enterprise-wide view of a given company's success in satisfying customers.

"There are number of satisfaction metrics within a firm. Some might be based in the call centers and some be based with agents, and so on," Heffernan relates. Any one metric, however, can be a poor predictor of a satisfied customer's future behavior.

For example, Heffernan explains that many customers say that they would recommend a company to friends and family, but also say they'd go to another company when looking for a new insurance policy. "A high 'recommend' percentage doesn't necessarily give you any understanding of the commercial viability of that customer," he says.

Future success in converting younger policyholders and potential customers into advocates could be dependent on customer service. Heffernan explains that new products are soon copied and pricing changes are quickly matched. "We think the differentiator is really going to be from the customer experience. It's how you use your company to effectively change up and differentiate how you interact with a client," Heffernan says.

Meanwhile, Heffernan says insurers must balance the needs of many baby-boomers and seniors, many of whom still prefer more traditional insurance models and renew policies at very high rate, with the preferences of many younger policyholders who increasingly look to more mobile, more Web-based and more direct and automated ways to interact with their carrier.

"We're starting to find a demographic split with respect to age. It's really pronounced in the insurance side of it. We're seeing insurance companies trying to address those two demographics, and the two have sometimes contradictory objectives," Heffernan says.