Linh Ho,

Director of Product Marketing

OpTier

Today's insurance IT managers are working harder than ever. They are tasked with managing a complex ecosystem of business partnerships and external service providers, and keeping pace with the rapid increase in customer service expectations. They must step up to the continued demands to cut costs by consolidating and streamlining operations, while simultaneously improving the end-user experience. To accomplish these often conflicting goals, they are spending billions of dollars every year on IT products and services.

Insurance IT managers have a bigger challenge than their counterparts in many other industries. They must interact with a wide variety of applications and services from other verticals, including healthcare, government, finance, transportation, and telecommunications. In addition, many insurance carriers are now moving their operations online, to reach more potential customers and improve service to their existing client base. New applications are enabling policy holders to access personal account and billing information, submit claims, view quotes, and purchase new policies easily over the Internet. But all of these components, partners, processes, and new services are combining together to make managing IT in the insurance industry an extremely challenging task.

Before we look at one of the key solution area that is enabling insurance companies to regain control of their IT environments, let's look at the top five challenges facing insurance IT managers today:

Challenge 1. Complying with industry regulations.

Insurance industry regulations, including the Health Insurance Portability and Accountability Act (HIPAA) and SOX 404, focus on ensuring customer information security and privacy. To comply with the ever-increasing list of industry regulations and standards, IT must have the ability to easily access regulated data and create comprehensive reports to prove to auditors that all systems are performing accurately and securely. And when key systems or applications fail--which they inevitably will--IT needs the ability to quickly identify what component or application was at fault, and what confidential data was breached. More importantly, IT needs to supply the historical data in a timely fashion or significant penalties can be applied.

Challenge 2. Increasing IT efficiency and lowering costs.

Insurance IT managers need solutions that will enable them to improve operational efficiency and dramatically lower costs. Automation of routine tasks is a logical first step in cutting costs. But care must be taken to ensure that automation does not degrade the end-user experience. Insurance companies also need the ability to lower "revenue leakage" and minimize "claims leakage"--referring to all instances where carriers aren't reaping all of the financial benefits they could from their claims and reinsurance contracts.

Challenge 3. Implementing straight-through processing. Straight-through processing (STP) refers to the ability to automate on-line application processing and underwriting, putting policies into force immediately. STP enables the entire transactions to be conducted electronically without the need for re-keying or manual intervention, subject to legal and regulatory restrictions. When used to automate external and internal customer-facing transactions, IT needs the ability to quickly isolate and fix any issues that could impact transactions or applications to eliminate or minimize any latency issues.

Challenge 4. Modernizing all core systems.

Modernization of applications and systems is a key trend in the insurance industry that will continue into 2010 and beyond. Areas currently slated for improvement include billing systems consolidation, platform updates, and improving end-user interfaces. To streamline these processes, IT must now serve as part of a much larger enterprise taskforce with many different stakeholders, including line of business managers, insurance agents, company executives, and many others. IT needs to be able to baseline application and system performance, and then perform change-impact analyses to understand how these changes may affect the different stakeholders involved in the modernization process.

Challenge 5. Increasing flexibility to respond to changing business needs. The only thing that is known for certain in the insurance IT environment is that it will continue to change every year. New laws and reporting regulations will be introduced by governments and standards bodies around the world. Insurance IT managers need the flexibility to quickly adapt to change. To do this, they must obtain end-to-end visibility into key IT infrastructure, applications, and insurance business transactions, to facilitate claims processing and insurance fraud, actuarial science, self-service portals and online customer service, as well as capacity management and provisioning. With better visibility and analytics, insurance companies will be able to build the necessary agility and responsiveness into their IT environments, and ultimately adapt to all of the changes that are coming down the pipeline.

Business transaction management (BTM) solutions can provide an excellent way to dramatically simplify IT management while improving application performance and availability. BTM enables real-time tracking of insurance and other end-user business transactions as they flow across multiple applications and tiers, providing true end-to-end visibility, simplifying problem isolation, and increasing IT efficiency.

BTM enables IT management in the insurance industry to gain:

? Real-time visibility into actual business transactions and the user experience, such as "get quote" or "process claim". This helps IT immediately quantify the business impact, find the problem area, and fix the cause quickly to restore service.

? Access to historical data for reporting to auditors and compliance officers about critical insurance application performance.

? The ability to create baseline assessments to ensure application performance and end-user experience, both before and after any modernization projects or for change impact analyses.

? Automatic discovery of insurance's complex transactions, applications, and their supporting infrastructure. This improves efficiency and enables IT managers to understand how performance is impacting their businesses.

BTM can provide complete visibility into all insurance transactions and critical systems in real time, including:

? Claims processing

? Real-time quotations and illustrations

? Underwriting and rating

? Self-service portals (including on-line policy servicing)

? Actuarial services

? Contact center and CRM interfaces

? Medicare administration

? Carrier/agency interfaces

? Unit dealing

Using BTM, insurance companies around the world can meet all of these challenges to regain control of their IT environments and proactively manage service levels, resolve issues quickly, cut costs, and reduce product development lifecycles.

For more information on OpTier visit their Web site at www.optier.com