Insurance & Technology: Esurance recently debuted a new ad campaign with the tagline, "People when you want them, technology when you don't." Does this campaign reflect any sort of changes in the technology infrastructure at the company?
Related ResourcesA Hybrid Approach to Detecting Insurance FraudAccount Reconciliation: Maintaining Account Integrity and Responding to New Reporting RequirementsDecision Matrix: Selecting a Business Process Management VendorPhil Swift: The shift in our marketing approach hasn't changed how we use tech internally, but our customer base has changed and we want to appeal to them.
I&T: Your previous campaign was, I believe, more direct-response focused. You must have a lot of data from that campaign; how are you using that across the enterprise?
PS: We've built the infrastructure to capture all the data, and we provide marketing and actuaries the tools to manipulate that data. A lot of it is leveraged in the advertising campaign. At the beginning it was lets put all the data in and see how we're going to use it, and after 10 years we can really look at trends to figure out where we want to go business-wise.
I&T: Are you planning on increasing your mobile presence at all? I know you recently released an iPhone app.
PS: Customers are going to get insurance how they want. Mobile is an extension of that. We're trying to push the envelope all the time. We're on the iPhone, we're going to flip over to the Android and we want to upgrade our mobile website right now.
I&T: How else do you see mobile as helping the company?
PS: We're really continuing to expand our efforts with claims. Customers with our app can file a claim. We also see it for our adjusters, that they go out in the field and they are meeting customers who have had accidents, the more functionality we can give them in a mobile application or platform the better. They've got handhelds now where it's like sitting at their desk. There's a lot of technologies out there that are pushing the edge, and we're really excited about some of the things that we've seen.
I&T: You've recently launched a telematics pilot in Arizona. What is the state of that effort?
PS: We've got people signing up and we're going to roll out the device in 2011. The real question is how do you price it — I'm not an actuary, so there are other people working on that — but we think we've got a good product in place.
I&T: Are you planning any intiatives as far as your core systems are concerned?
PS: A rolling sort of architecture is part of our DNA. At 10 years old, we have legacy systems, but we designed it to allow evolution. The technology's moving along: Visual Basic, Dot-Net, now there's the Azul platform for the cloud computing. You have to build your systems so you can keep pace with that.
I&T: But you don't see any holes to patch up at this time.
PS: I listen to other peoples' pain points and we don't have them. When I attend conferences and hear people talk about how they're going to move to the web and all that, there's a lot they have to go through in terms of security, for example. For example, when I was at Visa working on the batch systems and the mainframe systems, security was completely different. Your emphasis isn't on checking batch and background, you're checking everything in real time. We don't really have a mixed environment, so I’m only dealing with one skill set.
mercredi 20 octobre 2010
U.S. Healthcare Reform: A Follow-Up
In the March 2010 issue of Searcher, I provided a guide to impartial and balanced resources useful for tracking the pending healthcare reform bill in the U.S. Congress. Shortly after publication of the column (The Medical Digital: “Universal Healthcare: A Guide to Unbiased Resources”), Congress passed bill H.R. 3590, the Patient Protection & Affordable Care Act (also known as PPAC) [http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.03590:]. President Barack Obama signed the legislation into law on March 23. A week later, on March 30, Obama signed a separate bill, H.R. 4872, The Health Care & Education Reconciliation Act [http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.04872:]. This new bill resolved differences between the House and Senate versions of PPAC. Since each piece of legislation is nearly 1,000 pages long, I thought it might be useful to provide a follow-up list of resources that simply lay out the major provisions of the bills and time frames for enactment.
Despite passage of the two laws, the legislation continues to come under intense scrutiny. Some states have filed lawsuits questioning the constitutionality of specific aspects of the bills. For example, some states are challenging whether or not the federal government has sovereignty over the states in legislating healthcare reform changes and are contesting PPAC’s provision that individuals and businesses must purchase health insurance or face financial penalties. Consequently, politicians, partisan policy centers and think tanks, and news organizations are being closely monitored by fact-checking groups to catch inaccurate or false statements about the legislation. Some of the fact-checking sources were mentioned in the earlier column, but a number of new ones, mainly from newspapers, have sprung up.
As before, I searched for neutral sources that clearly and unambiguously lay out healthcare’s major changes. I mainly focused on short, easy-to-read summaries or timelines that information professionals and libraries/information centers can pass on to their constituents, whether individuals or human resource departments responsible for their organizations’ health insurance plans. I thought there might be a great deal of overlap of sources with the March column, but, surprisingly, other than the Kaiser Family Foundation, all resources listed below are brand new. For those interested in serious, scholarly research regarding the historical progress of U.S. healthcare reform, this column and the prior column might be a good pairing.
Despite passage of the two laws, the legislation continues to come under intense scrutiny. Some states have filed lawsuits questioning the constitutionality of specific aspects of the bills. For example, some states are challenging whether or not the federal government has sovereignty over the states in legislating healthcare reform changes and are contesting PPAC’s provision that individuals and businesses must purchase health insurance or face financial penalties. Consequently, politicians, partisan policy centers and think tanks, and news organizations are being closely monitored by fact-checking groups to catch inaccurate or false statements about the legislation. Some of the fact-checking sources were mentioned in the earlier column, but a number of new ones, mainly from newspapers, have sprung up.
As before, I searched for neutral sources that clearly and unambiguously lay out healthcare’s major changes. I mainly focused on short, easy-to-read summaries or timelines that information professionals and libraries/information centers can pass on to their constituents, whether individuals or human resource departments responsible for their organizations’ health insurance plans. I thought there might be a great deal of overlap of sources with the March column, but, surprisingly, other than the Kaiser Family Foundation, all resources listed below are brand new. For those interested in serious, scholarly research regarding the historical progress of U.S. healthcare reform, this column and the prior column might be a good pairing.
Wal-Mart Enters the Health-Care Fray
Some good news for seniors on Medicare and Wal-Mart (NYSE: WMT) investors is bad news for Wal-Mart's competitors: The retail giant has partnered with health-care benefits provider Humana (NYSE: HUM) to provide an extremely low cost Medicare Part D prescription drug plan.
The plan
The plan, called the Humana Wal-Mart-Preferred Rx Plan (PDP), will provide coverage at a monthly premium of less than $15. The stand-alone plan is offered at one price throughout the country, and according to the joint press release, could help typical Medicare Part D recipients save an estimated $450 per year, starting in 2011. Copayments for prescription generic drugs could be as low as $2 if customers use a preferred retail location, and generic prescriptions delivered using Humana's home delivery program may require no copayment at all.
Big-box competitors Target (NYSE: TGT) and Costco (Nasdaq: COST) will also need to create programs similar to Wal-Mart's at this low cost in order to keep their own prescription drug customers. When Wal-Mart introduced its $4 prescription drug pricing for generic drugs just a few years ago, the other retailers had to be quick to match. Look for a similar scenario to occur with Medicare Part D this time around.
Wal-Mart wins again
As Wal-Mart's health and wellness division president Dr. John Agwunobi said, "We know every dollar counts, especially when you live on a fixed income. We believe no one should have to choose between buying their groceries or their medications. Financial health is a fundamental part of a person's well-being. "
Clearly, Wal-Mart is striking the right chord with the plan. It definitely benefits the company as well as the 18 million Americans who rely on Medicare Part D, especially if it draws new customers into Wal-Mart locations around the country. And even if margins will be small for Wal-Mart, the company is used to dealing with a low-margin environment, and is better equipped than its competitors to succeed in it. Wal-Mart can offer such competitive prices because of the sheer volume of business they are capable of doing at low costs. While other smaller pharmacies can attempt to match this deal, the margin squeeze will definitely be much greater on these companies bottom line.
Humana also doesn't see the deal as a loss leader for their company. Humana Pharmacy Services vice president William Fleming said that the company expects margins for the program of around 5%, which equals the average for all of the company's Part D plans, and sees it as a good way to increase its Part D membership ranks.
What the future will bring
It will be interesting to watch as competitors begin to respond to this new prescription drug plan. The details of how the new health-care reform bill is affecting businesses are still developing. As usual, Wal-Mart has struck early with a low-cost option, even if it isn't particularly innovative.
How do you think Wal-Mart and Humana's competitors will respond the new Medicare plan? Let us know in the comment box below.
Editor's note: A prior version of this article incorrectly included BJ's Wholesale among retailers that sell prescription drugs. The Fool regrets the error.
The plan
The plan, called the Humana Wal-Mart-Preferred Rx Plan (PDP), will provide coverage at a monthly premium of less than $15. The stand-alone plan is offered at one price throughout the country, and according to the joint press release, could help typical Medicare Part D recipients save an estimated $450 per year, starting in 2011. Copayments for prescription generic drugs could be as low as $2 if customers use a preferred retail location, and generic prescriptions delivered using Humana's home delivery program may require no copayment at all.
Big-box competitors Target (NYSE: TGT) and Costco (Nasdaq: COST) will also need to create programs similar to Wal-Mart's at this low cost in order to keep their own prescription drug customers. When Wal-Mart introduced its $4 prescription drug pricing for generic drugs just a few years ago, the other retailers had to be quick to match. Look for a similar scenario to occur with Medicare Part D this time around.
Wal-Mart wins again
As Wal-Mart's health and wellness division president Dr. John Agwunobi said, "We know every dollar counts, especially when you live on a fixed income. We believe no one should have to choose between buying their groceries or their medications. Financial health is a fundamental part of a person's well-being. "
Clearly, Wal-Mart is striking the right chord with the plan. It definitely benefits the company as well as the 18 million Americans who rely on Medicare Part D, especially if it draws new customers into Wal-Mart locations around the country. And even if margins will be small for Wal-Mart, the company is used to dealing with a low-margin environment, and is better equipped than its competitors to succeed in it. Wal-Mart can offer such competitive prices because of the sheer volume of business they are capable of doing at low costs. While other smaller pharmacies can attempt to match this deal, the margin squeeze will definitely be much greater on these companies bottom line.
Humana also doesn't see the deal as a loss leader for their company. Humana Pharmacy Services vice president William Fleming said that the company expects margins for the program of around 5%, which equals the average for all of the company's Part D plans, and sees it as a good way to increase its Part D membership ranks.
What the future will bring
It will be interesting to watch as competitors begin to respond to this new prescription drug plan. The details of how the new health-care reform bill is affecting businesses are still developing. As usual, Wal-Mart has struck early with a low-cost option, even if it isn't particularly innovative.
How do you think Wal-Mart and Humana's competitors will respond the new Medicare plan? Let us know in the comment box below.
Editor's note: A prior version of this article incorrectly included BJ's Wholesale among retailers that sell prescription drugs. The Fool regrets the error.
Prudential and AIA Fight It Out in Asia
Prudential's (PUK) Tidjane Thiam tried and failed to buy AIA Group to expand in Asia, his first test as chief executive officer. To succeed now he will have to beat AIA's new CEO—and his ex-boss—Mark Tucker. Thiam's former mentor has begun gauging investor appetite for an initial public offering of AIA, which at about $15 billion would be one of Hong Kong's largest. The IPO of AIA, a unit of American International Group (AIG), marks the beginning of a race that will pit Thiam, 48, and Tucker, 52, in a contest for the world's fastest-growing insurance market.
"It's a case of eat or be eaten," says Christopher Wong, a fund manager at Aberdeen Asset Management in Singapore, which oversees $267 billion of assets including Prudential shares. "The growing sophistication of Asian consumers in terms of wealth management and family protection is a direct benefit to life insurers in Asia. It's going to be a new battleground for growth."
For Thiam, success in Asia will help appease investors who called for him to quit after his £25.7 ($35.5 billion) bid for AIA collapsed. For Tucker, AIA's IPO will give him independence from AIG.Prudential (which is not related to New Jersey-based Prudential Financial) and AIA are the two biggest international insurers in Asia and the only two with branches across the continent. "We've been competing for a long time," Thiam told Bloomberg in an August interview. "It's well recognized they are in need of a turnaround. We've taken them over in growth, profitability, and in margins. That momentum is real." Thiam declined to give a forecast for sales growth in Asia, which provided 44 percent of the company's profit from new business in 2009, saying that expansion depends on factors he can't control such as economic growth. "We will do better than the competition," he says. "That we can control." Failing to beat AIA may "be the catalyst for a takeover" of Prudential, says Jonathan Newman, an analyst at Brewin Dolphin Holdings, which manages £21.6 billion including Prudential shares.
While Prudential has accelerated sales in the region since 2008, AIA has been hurt by the U.S. bailout of AIG. Its sales declined 5 percent, to $11.6 billion, in 2009 as AIG's rescue deterred potential customers. "Prudential's agents in Asia are currently much more productive than AIA's, but I expect AIA to narrow the gap pretty quickly," says Martin Brown, who helps manage £69 billion at Ignis Asset Management, one of Prudential's 30 biggest shareholders. Prudential had about 410,000 sales agents in Asia at the end of 2009 compared with about 320,000 at AIA. Both companies compete in Asia with China Life Insurance (LFC), Ping An Insurance, and Axa Asia Pacific Holdings.
In 2008, when Tucker was serving as CEO of Prudential, he plucked Thiam from rival U.K. insurer Aviva, giving the Ivory Coast-born French national his first job on the board of a publicly traded company. British-born Tucker, who was a professional soccer player in his youth, left Prudential in 2009, handing the top job to his protégé. In July, AIG CEO Robert H. Benmosche picked Tucker to head AIA.
Tucker plans to sell about 49 percent of the company this month, according to two people with knowledge of the matter. The proceeds will go toward paying back the U.S. government. Tucker and Patricia Chua, a Hong Kong-based spokeswoman for AIA, declined to comment. The IPO would give Tucker a platform to make a takeover bid for Prudential, says Barrie Cornes, a London-based analyst at Panmure Gordon. That possibility does not worry Thiam. "I love Mark and respect him," he said in August. "We can't become obsessed with AIA. We don't see it as a threat."
"It's a case of eat or be eaten," says Christopher Wong, a fund manager at Aberdeen Asset Management in Singapore, which oversees $267 billion of assets including Prudential shares. "The growing sophistication of Asian consumers in terms of wealth management and family protection is a direct benefit to life insurers in Asia. It's going to be a new battleground for growth."
For Thiam, success in Asia will help appease investors who called for him to quit after his £25.7 ($35.5 billion) bid for AIA collapsed. For Tucker, AIA's IPO will give him independence from AIG.Prudential (which is not related to New Jersey-based Prudential Financial) and AIA are the two biggest international insurers in Asia and the only two with branches across the continent. "We've been competing for a long time," Thiam told Bloomberg in an August interview. "It's well recognized they are in need of a turnaround. We've taken them over in growth, profitability, and in margins. That momentum is real." Thiam declined to give a forecast for sales growth in Asia, which provided 44 percent of the company's profit from new business in 2009, saying that expansion depends on factors he can't control such as economic growth. "We will do better than the competition," he says. "That we can control." Failing to beat AIA may "be the catalyst for a takeover" of Prudential, says Jonathan Newman, an analyst at Brewin Dolphin Holdings, which manages £21.6 billion including Prudential shares.
While Prudential has accelerated sales in the region since 2008, AIA has been hurt by the U.S. bailout of AIG. Its sales declined 5 percent, to $11.6 billion, in 2009 as AIG's rescue deterred potential customers. "Prudential's agents in Asia are currently much more productive than AIA's, but I expect AIA to narrow the gap pretty quickly," says Martin Brown, who helps manage £69 billion at Ignis Asset Management, one of Prudential's 30 biggest shareholders. Prudential had about 410,000 sales agents in Asia at the end of 2009 compared with about 320,000 at AIA. Both companies compete in Asia with China Life Insurance (LFC), Ping An Insurance, and Axa Asia Pacific Holdings.
In 2008, when Tucker was serving as CEO of Prudential, he plucked Thiam from rival U.K. insurer Aviva, giving the Ivory Coast-born French national his first job on the board of a publicly traded company. British-born Tucker, who was a professional soccer player in his youth, left Prudential in 2009, handing the top job to his protégé. In July, AIG CEO Robert H. Benmosche picked Tucker to head AIA.
Tucker plans to sell about 49 percent of the company this month, according to two people with knowledge of the matter. The proceeds will go toward paying back the U.S. government. Tucker and Patricia Chua, a Hong Kong-based spokeswoman for AIA, declined to comment. The IPO would give Tucker a platform to make a takeover bid for Prudential, says Barrie Cornes, a London-based analyst at Panmure Gordon. That possibility does not worry Thiam. "I love Mark and respect him," he said in August. "We can't become obsessed with AIA. We don't see it as a threat."
PMI Group Shares Popped: What You Need to Know
What: Shares of mortgage insurer PMI Group (NYSE: PMI) jumped more than 10% in intraday trading today. The shares have been absolutely surging over the past few days after hedge fund Omega Advisors disclosed a stake in the company and Omega's CEO made some encouraging remarks about PMI.
So what: Like fellow mortgage insurers MGIC Investment (NYSE: MTG) and Radian Group (NYSE: RDN), PMI was absolutely ravaged by the housing meltdown. Investors are concerned about the future of these companies, and as a result the stocks have traded down significantly. Having big-shot investors step in has provided investors with a shot of confidence.
Now what: This doesn't come out of the blue for Omega -- the company already had a sizable stake in MGIC. And John Paulson and his firm had already disclosed a stake in PMI. Savvy investors, though, will find their own reasons for taking a shot on these beaten-down insurers. Watching what the "pros" do can point you in the right direction, but it's nearly always a bad idea to just blindly follow their moves.
So what: Like fellow mortgage insurers MGIC Investment (NYSE: MTG) and Radian Group (NYSE: RDN), PMI was absolutely ravaged by the housing meltdown. Investors are concerned about the future of these companies, and as a result the stocks have traded down significantly. Having big-shot investors step in has provided investors with a shot of confidence.
Now what: This doesn't come out of the blue for Omega -- the company already had a sizable stake in MGIC. And John Paulson and his firm had already disclosed a stake in PMI. Savvy investors, though, will find their own reasons for taking a shot on these beaten-down insurers. Watching what the "pros" do can point you in the right direction, but it's nearly always a bad idea to just blindly follow their moves.
Ambac Shares Popped: What You Need to Know
What: Shares of Ambac Financial (NYSE: ABK) were up more than 10% in intraday trading as investors digested the plan of rehabilitation from the Wisconsin insurance commissioner.
So What: Earlier this year, the Wisconsin Office of the Commissioner of Insurance (OCI) set aside certain liabilities of Ambac's Wisconsin-based Ambac Assurance because it became increasingly clear that the company was going to struggle to pay its policyholders. The plan from the OCI is one more step toward Ambac sorting out its messy situation.
Now What: It has been a heady week for Ambac, and shares have risen close to 50% since the beginning of last week. Ambac's situation is still pretty dire, though, and regulators' primary concern is making sure that policy-holders are made whole, not that Ambac itself will avoid bankruptcy protection or survive at all. At this point, shares of Ambac are a gamble -- and likely a bad one -- so prudent investors are best off steering clear in favor of less ulcer-inducing fare.
So What: Earlier this year, the Wisconsin Office of the Commissioner of Insurance (OCI) set aside certain liabilities of Ambac's Wisconsin-based Ambac Assurance because it became increasingly clear that the company was going to struggle to pay its policyholders. The plan from the OCI is one more step toward Ambac sorting out its messy situation.
Now What: It has been a heady week for Ambac, and shares have risen close to 50% since the beginning of last week. Ambac's situation is still pretty dire, though, and regulators' primary concern is making sure that policy-holders are made whole, not that Ambac itself will avoid bankruptcy protection or survive at all. At this point, shares of Ambac are a gamble -- and likely a bad one -- so prudent investors are best off steering clear in favor of less ulcer-inducing fare.
Ambac Shares Popped: What You Need to Know
What: Shares of Ambac Financial (NYSE: ABK) were up more than 10% in intraday trading as investors digested the plan of rehabilitation from the Wisconsin insurance commissioner.
So What: Earlier this year, the Wisconsin Office of the Commissioner of Insurance (OCI) set aside certain liabilities of Ambac's Wisconsin-based Ambac Assurance because it became increasingly clear that the company was going to struggle to pay its policyholders. The plan from the OCI is one more step toward Ambac sorting out its messy situation.
Now What: It has been a heady week for Ambac, and shares have risen close to 50% since the beginning of last week. Ambac's situation is still pretty dire, though, and regulators' primary concern is making sure that policy-holders are made whole, not that Ambac itself will avoid bankruptcy protection or survive at all. At this point, shares of Ambac are a gamble -- and likely a bad one -- so prudent investors are best off steering clear in favor of less ulcer-inducing fare
So What: Earlier this year, the Wisconsin Office of the Commissioner of Insurance (OCI) set aside certain liabilities of Ambac's Wisconsin-based Ambac Assurance because it became increasingly clear that the company was going to struggle to pay its policyholders. The plan from the OCI is one more step toward Ambac sorting out its messy situation.
Now What: It has been a heady week for Ambac, and shares have risen close to 50% since the beginning of last week. Ambac's situation is still pretty dire, though, and regulators' primary concern is making sure that policy-holders are made whole, not that Ambac itself will avoid bankruptcy protection or survive at all. At this point, shares of Ambac are a gamble -- and likely a bad one -- so prudent investors are best off steering clear in favor of less ulcer-inducing fare
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