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Doing battle in this hard market: while risk managers can't do much about premium increases, they are doing something to ease the burden of lengthy applications.

Renewing a casualty policy in this hard market is not easy. Just ask Matt Jablonski, director of insurance for the New York-based media company Hearst Corp. Despite working for one of the most visible companies in the world, Jablonski's insurer has reason to believe that Hearst's employees are not as safe as they used to be.

Applications, which in the soft market were often waived, have mushroomed to as many as 60 pages and answers to questions are completed using e-mail attachments. "During our first renewal application on our casualty program, our insurer had huge concerns regarding the concentration of employees in tall buildings in large cities," says Jablonski. "We have 130 operations throughout the U.S., and I had to work with an assistant over the weekend to answer all their questions."

More than 3,000 miles away, at San Francisco-based Del Monte Foods Co., the days of renewing a casualty application for less than $50,000 with just a phone call has become a relic of the 20th century. Today, says Chris Addieg, Del Monte's director of risk management, risk managers are lucky if their insurance policies don't increase by $50,000. If risk managers can't do anything about double-digit premium increases, at least they can ease the pain by simplifying the process of filling out applications.

Jim Jannuzzo, assistant vice president for risk management at Axa Financial, says he's found a cheap way of getting around laborious application renewals.

CDs to the Rescue

Data that was once transmitted on paper, floppy disks and emails is now submitted on CDs, each holding 700 megabytes of memory. CD recorders and Excel spreadsheets do the trick, he says.

At Philadelphia-based specialty chemicals manufacturer Rohm and Haas Co., Henry L. Good, director of insurance and travel, is keeping his fingers crossed hoping insurers will take kindly to transmitting data on compact discs. "We've tried the CD-cutter approach this year, but we're not sure what the response is going to be on the insurer side," he says. "These applications are probably three or four inches thick, and the majority of the information is already on our Web site."

Good says underwriters ought to be more cooperative in allowing risk managers to assemble the required data. Insurers should cooperate in the design of applications to eliminate formatting incompatibility. "The format for Travelers for workers' compensation is different from St. Paul's for auto--no format speaks to one another," he says. Not that Good is in much of a position to dictate what he wants from the under-writers. "In a soft market, my position is that I don't have to answer any questions," says Good. "In this market, unfortunately, I have to answer most of them.

Good, who helped design an automated property engineering report system for Rohm and Haas in conjunction with Willis, is not alone in his desire to see information systems speak to one another.

Andy Gainey, corporate risk manager at Collins & Aikman Products Co. in Troy, Mich., helped his company design a proposal for a risk management information system a few years ago. He agrees that some insurers don't offer sufficient technology for coping with the renewal application process. "My dream system would be to put all the data in one mass and get it out to the insurers as desired," he says.

Software Answers

Ray" Bennett, manager for global risk and insurance at Owens Coming in Toledo, Ohio, has been using special software for the past two years. Gone are the days of three-inch thick notebooks full of paper providing insurers with company information.

A product, branded as "MyAnalysis," allows him to send his company's data in the form of an attachment. "We send additional information about Owens Corning to other insurers in electronic format, in addition to MyAnalysis," Bennett says. "In the hard market, underwriters are offering less coverage on each account. The risk manager who once had two or three insurance companies to meet with now has 10. Each risk manager has to meet with more insurers. I don't how we could provide that much data in written form, without having this kind of technology to make the hard market easier for us."

The software, distributed by GE Commercial Insurance, includes information on the largest 100 of Owens Corning's 500 locations, the size and location of Owens Corning sites, protection systems such as sprinkler units, building construction data, exposure of buildings to natural catastrophes, diagrams, plot plans, charts and graphs.

"In addition, GE provides bench-marking in that we give each facility a numerical rating, from excellent to poor, and from there you can drill down to facilities that have problems," says Andreas Spintzyk, principal consultant with GE Global Asset Protection Services headquartered in Avon, Conn. MyAnalysis is Web-based.

Risk Managers Pitch In

Though many risk managers claim few insurers are rolling out connective tools to renew submissions and fill out underwriting documents, many risk managers are helping engineers improve IT systems for insurance purposes.

Good, of Rohm and Haas, says five years of technological growth have made it possible for him to improve his company's system. "'This is the current process in the industry," he says. "The property reports are published on paper and sent to various locations, which may or may not respond. The engineer needs the information for his review, but the chances are slim to none that the responses will ever be linked back to the report itself."

Good says the improvements make it easier at renewal time. "Now all the reports are issued via e-mail," he says. "When the inspector goes out to the facilities, we require our locations to respond in 30 days. Any time the underwriter wants to see the reports, we just give them a password and temporary access to our Web site," he says.

Jablonski of Hearst began in the firm's accounting department and experienced some of the data incompatibility headaches when he later moved into management information systems. "As far back as 1992, I found that the industry as a whole had an arcane way of manually collecting and crunching data," he says. Those were the days when his company was using mainframe-based applications called ASK OSCAR provided by The Hartford.

"In 1992, in order to review our claims filed with the carrier, I'd have to take two or three days off to sit down with a claims handler at one of their terminals to discuss whether we wanted to close a claim or change the reserves," he also says. "It was a tedious process which required me to be out of the office and in Dallas."

In 1998, Hearst switched to a system known as e-Carma, offered by Travelers, and these days Jablonski can also download all the pricing data into an Excel spreadsheet with the click of one button instead of using a fee-based a la carte system.

Risk managers, however, say it is still not enough to cope with the burdens of filing renewals.

Easing the Search For Breaks! Sprains And Strains

Over the past five years, new database technology available to risk managers has made industrial plants safer and more productive, says Chris Addieg, risk manager for San Francisco-based Del Monte Food Co.

"We used to have a lot of problems with a leg injury," he says, "but the technology has expanded the ability to code to a finer level." That has allowed Del Monte to replace pieces of equipment that took a physical toll on employees.

Technology has enabled Addieg to cut claims by 30 percent, allowing him to generate claims based on what kinds of workstations employees were using and what they were doing when they were injured. "We found that three people had gotten rotator cuff injuries on a certain piece of equipment," he says. "The coding helped us justify the cost of replacing that equipment."

Del Monte's database, maintained by NATLSCO (a TPA recently spun-off from Kemper Insurance Co.), also provides risk managers with the adjuster's notes used in reviewing an employee's medical record.

"Let's say I want to look at all back injuries involving more than $20,000 in reserves," says Addieg. "In the past the plant would know we had six slip-and-falls for $5,000, but with each passing year we've been able to give our locations a better understanding of how they were being charged back."

Every insurer Del Monte is looking at offers Web-based database capability, allowing Addieg to process and rework information using spreadsheet applications. "Before, the database was just for looking up information, but now I can actually download it into Excel," he says. "I can send an e-mail to the adjuster from within the database, whereas previously I would have to write down a claim number and send an e-mail from my regular e-mail program."

Matt Jablonski, insurance director for New York-based Hearst Corp., agrees that workers' compensation was one area where the new technology paid off. "We acquired the San Francisco Chronicle in 2000, and the number of losses there was extremely high," he says. "They had large printing presses in the Bay area and ran three shifts." But after using the new technology to educate shift supervisors, losses have been reduced by $2.5 million, he says.
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Title Annotation:technology
Author:Otrompke, John
Publication:Risk & Insurance
Geographic Code:1USA
Date:Sep 1, 2003
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