The Connected Insurance Enterprise[TM]: new inroads to a profitable future.

The insurance industry in the 21st century faces significant challenges as technological advances and changes in business processes transform the insurance landscape.

Escalating customer demands, shorter development cycles and innovation from competitors are increasing the pressure on today's insurance companies. Exacerbating the situation is the need to create a uniform customer and producer experience across channels while rapidly integrating third-party providers, and improving efficiency

The result of these pressures is awareness that in order remain competitive, the existing processes and systems that support the business must be updated, and that management must have access to more robust information to drive investments and day-to-day operations.

"These issues are symptomatic of a basic change in the relationship between companies and the marketplace," explains Scott McConnell Vice President in Cap Gemini Ernst & Young's Insurance practice. "That's why carriers are increasing their focus on changing their companies to become much more adaptive to the market, The challenge is conducting this transformation without alienating your distribution, channels."

While challenges are significant, opportunities for growth and market domination exixt through strategic investment in transforming into a world-class insurance enterprise. Taking advantage of current technology and thought leadership can yield quantifiable return on investment and the ability to grow and adapt your business to new ends and market conditions.

Defining the Ideal Enterprise

The world-class, 21st century insurance enterprise will maximize sales; enhance the lifetime value of its customers; and streamline operational and processing costs. It will be built on a connected infrastructure of people, processes, technology and business partners that support rapid, yet flexible growth. More importantly, the enterprise will be a technology leader that uses best-of-breed applications to maximize, the system performance for front-office management, product administration, financial management, reporting and infrastructure maintenance. World-class insurance enterprises share these characteristics:

* Alert-based management. The ability to provide distribution channels with notifications of sales and retention opportunities that otherwise would be missed.

* Efficient policy processing. Flexible systems that use technology to reduce system support costs and to enable process reengineering within administration process

* Rapid deployment of new products. A combination of product development and distribution capabilities allow for rapid deployment of new products.

Companies that transform their enterprises will be more profitable because they will improve customer and producer retention; enhance producer productivity and performance; uncover and support cross-selling opportunities optimize the lead-generation process, maximize the customer experience and focus on the lifetime value of customers CGE&Y's experience indicates producer-productivity can increase by as much as 30 percent; new customer and cross sell revenues can increase up to 30 percent and new product revenue can increase as much as 20 percent.

These same enterprises will be more cost effective due to lower system-development and maintenance costs; optimized producer efficiency and account-servicing capabilities; shortened product development times; and streamlined application processing. Here, CGE&Y research shows that producer support, marketing, new product development and application processing costs can drop by as much as 50 percent; account servicing costs up to 35 percent; and accounting/IT costs by as much as 30 percent.

Building the World of Superior Enterprises

To help companies build a world class, 21st century carrier, Cap Gemini Ernst & Young engineered "Connected Insurance Enterprise (CIE)." This insurance solution set combines best-of-breed technology with an innovative, process-based approach to building adaptive business strategies, enhancing customer service, and focusing the connected business partners on the attainment of mutually beneficial, measurable goals.

And, unlike other vendor offerings, CIE is a pre-built solution, running in a live environment in Cap Gemini Ernst & Young's Advanced Development Centers.

CIE allows for a staged implementation across the enterprise. This incremental approach lets carriers attack specific pain points, thereby distributing implementation costs over time. CIE is also scalable--accommodating levels of internal growth as well as growth by acquisition. In effect, CIE was designed for companies that recognize:

* Producers must spend more time generating revenue and less time on administrative tasks.

* Cross-sell/up-sell opportunities often go unrecognized.

* Sales efforts are compromised due to lengthy product-development cycles.

* Straight-through-processing capabilities do not exist within their organization.

* Real-time information on customer profitability, producer effectiveness and product profitability is not attainable.

* IT costs represent too large a portion of the enterprise budgets.

Explains Scott McConnell, "CIE is a cutting-edge venture that helps insurance entities evolve more readily and more efficiently, yet with less risk. The greatest risk, in fact, may be failing to explore the potential of this revolutionary--not evolutionary--approach to becoming a world class Connected Insurance Enterprise."

For more information, please contact Scott McConnell at 847-769-1844.

Visit us at www.us.cgey.com/finance.