Archive for the ‘Uncategorized’ Category

NAMIC, IIABA oppose OFC vith emails to reps, prez

January 27, 2009

NAMIC and IIABA try to counter-lobby Geithner against OFC

http://www.propertyandcasualtyinsurancenews.com/cms/nupc/Breaking%20News/2009/01/26-OIR-dp

We take no position on OFC, but we differ on the likelihood of it happening soon. Mr. Hersh says OFC gets swept along in a general reform of financial services. I’m still betting that these kinds of lobbying groups can have enough sway with Democratic governors and a Democratic house majority to get it off the table. We’ll see who buys the drinks at ACORD/LOMA or ISOTech!

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PAS predictions…

January 26, 2009

“It’s had to make predictions, especially about the future.” But SourceMedia gives it a go.

Overall, some good insights. We have one quibble with this prediction, though:

With one possible exception–risk management technologies—the investment in large projects, such as core systems or legacy replacement already in play, will not be cancelled; however, those in planning stages will be placed on hold.

While this may be true for the most troubled firms, we’re actually seeing the opposite at many other challenged firms — this is the year that the business case for core system replacement actually makes the most sense, since operating efficiency is at a premium.

Check out Wednesday’s Webinar at 2 pm with Chad Hersh for more.

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New CEO for US – New CTO coming soon?

January 20, 2009

As the new president puts together his “top table,” one of the voices is likely to be a CTO. BusinessWeek reports that the two top choices are Padmasree Warrior of Cisco and Vivek Kundra of Washington, DC’s government.

Like insurance, government is largely an information business, and one that is hamstrung by legacy technologies that inhibit the adoption of new practices. Here’s hoping the new CTO has the President’s full support to drive change through a conservative “business” (civil service) organization. I’m guessing that, like in insurance, business user resistance will be the biggest issue!

“Invisible Hard Market”

January 19, 2009

MMC predicts an “Invisible Hard Market” – rising premiums but falling volumes.

More on Innovation

January 15, 2009

In other innovation news, Zurich appoints a new head of “Customer-Centric Innovation.”

“Success will require a very close working relationship between Zurich Innovation, Zurich Proposition Development and the IT organization,” he comments. “One of the most common errors in the product development process is to fail to have the CIO’s office represented in the room from day-one.”

Zurich is taking an interesting route here, leading from the business side with a customer focus. Our report on innovation showed that business staff can be the real hurdle to innovation, so hopefully Zurich’s strategy of leading from the business side will extend down into the ranks and not be just an executive initiative. And the point about bringing IT into product development from day one is very important. As one of our recent reports on product development and speed to market showed, IT is often only 25% of total new product development effort, but it is often poorly coordinated with business efforts.

I&T Bylined Article on BI in Insurance

January 14, 2009

Article here

Life/Annuity in for a Tough Year

January 14, 2009

Good article in Insurance Networking News about Life/Annuity outlook for 2009, summarizing insights from Novarica, Conning, E&Y, and LIMRA. Insights from Conning highlight the importance of attracting Gen X and Gen Y consumers, who are starting their prime accumulation years in a very difficult market.  We believe insurers will need to examine their product and service offerings carefully in light of the different needs of these new generations of customers.

A Glimpse at the Future of Personal Auto — Today

January 13, 2009

I recently wrote about the future of personal auto in the aptly named “The Future of Homeowners and Personal Auto Insurance” (http://www.novarica.com/report_future_homeauto.shtml).  In that report, I wrote at length about pay-as-you-go insurance and the importance of getting out in front of this trend.  However, the sense of urgency should perhaps be even greater than what’s conveyed in the report.  A UK company, Coverbox (http://www.coverbox.co.uk), was created as a joint venture of a telematics provider and what appears to be a broker.  Coverbox provides comparative estimated rates based on your projected peak and off-peak mileage, and appears to give the telematics box away (though they charge for installation) when you buy a policy from a participating carrier.  What’s fascinating about this model is that carriers in the comparative rating system agree to standard contract wording and get standardized data from the boxes.  This is somewhat game-changing, as it removes a major barrier to entry and a major switching cost.

While this is a further challenge for carriers, it will almost certainly push more consumers in the UK market towards pay-as-you-go.  And since the US has pretty closely shadowed the UK market on this technology/business model, carriers here should take notice!

More on OFC: GAO weighs in

January 12, 2009

Advantage Mr. Hersh — this article in Insurance Networking News reports that the GAO is recommending OFC. I still think it’s a long shot, but it looks like it might actually be a fight this year.

NAMIC makes the case for state regulation

January 11, 2009

Hoping to head off a federal rush into insurance regulation, NAMIC this week released a new report called “Financial Oversight Failures Highlight Effectiveness of Insurance Regulation” (full report here) which makes the case that the state-by-state regulatory regime is more robust than a single federal regulator would be.

As Yogi Berra said, making predictions is hard, especially about the future. On the likelihood of the Optional Federal Charter actually being enacted in the near future, Novarica is of two minds. I continue to believe that the political opposition of NAMIC, IIABA, PCI, and the majority democratic state governments will keep congress from acting, especially when there are so many other fires to put out.  However, Chad Hersh believes that AIG’s collapse means that:

“Other insurance companies will be swept into some new regulation through no fault of their own. Carriers will need to demonstrate that they are willing to subject themselves to additional scrutiny, possibly in the form of federal regulation.”

Novarica will continue to monitor the political situation for additional developments that may tip our predictions towards one side or the other.