issue ii focus on executive education...executive corner an interview with usaa’s kevin j. bergner...

A publication of the Insurance Accounting & Systems Association

theInterpreter ®Fall

2013

Vol. LXXXIIIIssue II

®

Feature StoryEnterprise Risk Management: An Introduction to a Scaled Approachp. 16

Executive CornerAn Interview with USAA’s Kevin J. Bergnerp. 12

Technology Virtual RoundtableBuilding on the SMAC stackp. 10

Conrad Levesque

Kia Bickel

p. 14

Find out more about IASA’s Executive Education Program events and opportunities

inside this special section, or visit IASA online at www.iasa.org.

The ExecutiveEducationRoundtable SeriesLEARN | FOCUS | Lead

Presents

Around the industry, the country and your own backyard,

IASA is empowering insurance executives through education.

Special RepoRt

FocuS on executive education

I

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I

Fall 2013 x Vol. LXXXIII x Issue II

Fall 2013 3

4 Editorial Opinion 5 About IASA 5 Members Only Benefits

28 Association News • Career Skills Corner • National Volunteer Profile

departments

columns6 President’s MessageThe Talents of Others

7 From the Executive DirectorIASA Offers a New Online Experience

10 Technology Virtual RoundtableBuilding on the SMAC Stack

12 Executive CornerAn Interview with Kevin J. Bergner, President – USAA Property and Casualty Group

18 Analyst InsightsInsurers in the Driver’s Seat

PUBlISHED BYINSURANCE ACCOUNTING & SySTEMS ASSOCIATION, INC. (IASA)3511 Shannon Road, Suite 160P.O. Box 51340Durham, NC 27717-3409Phone: (919) 489-0991Fax: (919) 489-1994Email: [email protected]

VICE PRESIDENTMaRkETINg & CoMMUNICaTIoNSRod TraversThe Robert E. Nolan [email protected]

EDIToRJennifer OverhulseSt. Nick Media [email protected]

aRT DIRECToRJulie SchauerDesignMark, Inc.designmarkNoW.com

SUBSCRIPTIoN INFoRMaTIoNTricia StillmanDirector – Member & Volunteer ServicesIASA International Office(919) 489-0991 [email protected]

PUBlICaTIoN INFoRMaTIoNIASA’s Interpreter is published quarterly, plus one additional special conference issue, and is available at the general subscription rate of $35.00 per year for members and $45.00 per year for non-members.

REPRINT INFoRMaTIoNNo part of this publication may be reproduced without written permission of the publisher. Reprints of Interpreter articles are available from the publisher and may be coordinated through the editor of this publication.

Copyright 2013 by IASA. All right reserved.Note: The news expressed in Interpreter articles and columns reflect the opinions of individual authors and should not be construed as carrying the endorsement of the Insurance Accounting & Systems Association (IASA) or its staff. Additionally, use of this publication, the name “IASA,” or the name “Insurance Accounting & Systems As-sociation,” for personal promotion or recruiting purposes is strictly forbidden. Violations will be prosecuted or reported to the National Association of Personnel Consultants and appropriate licensing authorities as deemed warranted by IASA. Violations will be published for the information of our member companies.

A publication of®

®

®

cover story p. 19Focus on Executive EducationIn this special section, we highlight events from the 2013 IASA Executive Education Program, and discuss upcoming events and trends in the industry.

CONTENTS INCLUDE:• IASA’s Executive Education Program Overview• Executive EDGE Conference Recap• Traveler’s Jay Fishman Keynotes 2013 EDGE Event• Chief Information-Technology Officer Roundtable Recap• Chief Financial Officer Roundtable Recap• Chief Investment Officer Roundtable Recap• Chief Operating Officer Roundtable Recap• Future IASA EEP Events

contents

Find out more about IASA’s Executive Education Program events and opportunities

inside this special section, or visit IASA online at www.iasa.org.

The ExecutiveEducationRoundtable SeriesLEARN | FOCUS | Lead

Presents

Around the industry, the country and your own backyard,

IASA is empowering insurance executives through education.

Special RepoRt

8 5 Things Every Insurer Needs to Know About ORSA

by ADAM COLLyER and GABE ZUBIZARRETAA decade after the Sarbanes-Oxley Act (SOX) took effect, and almost three years after its statutory sibling the Model Audit Rule (MAR) became effective, there are countless lessons learned, as well as numerous regrets from imple-menting these pervasive regulations.

16 Enterprise Risk Management: An Introduction to a Scaled Approach

by CONRAD LEVESqUE and KIA BICKEL, CPAEnterprise Risk Management (ERM) is often thought of as a discipline in which only the largest corporations engage. yet, in today’s business environment, both the Davids and the Goliaths engage in risk management activities without necessarily putting a formal framework in place or realizing the extent to which they intuitively manage risk.

feature stories

Jennifer Overhulse is the principal owner of St. Nick Media Services and editor of IASA’s Interpreter. She can be reached for further comment via email at [email protected].

4 Fall 2013

R emember Pac-Man? I know I do. At

the time it came out, I was 10 or

11 years old and living the happy

suburban life in northwest Indianapolis. I

was babysitting at least a couple times a week

for families on my street, realizing quickly

that childcare was never going to be a chosen

profession for me. But, I imagine it’s still the

best way for enterprising pre-teens with no

driver’s license to make a little extra mall

money, right?

The house next door, while home to a

wealthy oncologist and his wife, also housed

three really awful and unruly, truly spoiled

children. And, don’t let me forget about the

dog, prone not only to barking at nothing,

but to stealing food from hands, tables and

countertops. This was one household that

definitely made me earn every cent of the

agreed upon $2 per hour. The upshot to the

whole thing, of course, was the money. Oh,

and did I mention that there was a full scale

arcade game (or two or three) in the basement

which I was free to play until all hours after

the little monsters were in bed? They had

pinball, Centipede and a brand spanking new

Pac-Man game.

On the inevitable evening when my

employers were out late for a fundraiser or

social event, I would stand for hours on end

gorging myself (virtually, of course) on little

yellow dots and glowing white ghosts. Each

time I reached a new level and hit a new high

score, my desire to play the game intensified.

At its heart, Pac-Man is an insanely simple

game. You eat the dots and avoid getting

eaten by the ghosts. Bam! It’s almost mindless

is its simplicity, and today as I deal with an

industry wallowing daily in layer upon layer

of complexity, I can’t help but wonder, was

that part of the game’s appeal, and perhaps its

most addictive quality?

Insurance could deal with a dose of

Pac-Man. Seriously, we’ve got complexity in

regulatory requirements, in systems, solutions

and infrastructure, in distribution channels,

and, in relationships between agents, insurers,

vendors, policyholders, claimants, industry

partners, interested parties, and more. The

complex realities and situations facing

insurance professionals today mean training

and continuing education are an important

part of any career. Just think, estimating an

auto claim for payment used to be a simple

task. Today, auto claims are anything but

simple, and are complicated by technologies

that enable “smart cars,” custom paint

jobs, increasing rates of fraud, and case law

dictating how specific instances are to be

handled and who is ultimately at fault.

Fortunately, and as IASA members and

associate members undoubtedly already

know, the association offers opportunities,

both in person and via various other delivery

methods, to meet the educational demands

of the day. In fact, through the IASA Annual

Conference, regional events, chapter meetings,

webinars and textbooks, I would venture

to guess between 7,000 and 10,000 people

annually connect with IASA for some type of

professional training. However, and in spite of

the association’s robust menu of educational

offerings, no single organization can be “all

things to all people.” So, it’s no wonder

many insurers are developing their own

internal training programs to supplement

the education that can be found through top-

quality providers such as IASA.

For several days this past September, IASA

President Beth Mercier and her Travelers

compatriots played host to about 125

association volunteers who came together

in Hartford, Connecticut for the annual

Fall Planning Meeting. At this meeting,

in addition to committee meetings and

networking events, attendees got a firsthand

look at Travelers Claim University (ClaimU),

a state-of-the-art training facility near the

company’s corporate headquarters. At ClaimU,

Travelers employees spend up to six weeks

Mindless Simplicity

EDIToRIal oPINIoN

continued on page 7

2013-2014 VolunTEER MAnAgEMEnT TEAMPRESIDENTBeth MercierThe Travelers CompaniesPRESIDENT-ELECTForrest G. Mills, Jr. Guaranty Income Life Insurance CompanyCHIEF FINANCIAL OFFICER Celeska Fredianelli North Pointe Insurance CompanyCHIEF INFORMATION OFFICER Mary Ellen FreyermuthCatholic Relief Mutual Insurance CompanyVICE PRESIDENT – BUSINESS SHOWCarlos CorreaLiberty International UnderwritersVICE PRESIDENT – CHAPTERS Billie Midgett-GordonGateway Insurance CompanyVICE PRESIDENT – DISTANCE LEARNINGBeech TurnerAssurantVICE PRESIDENT – EDUCATION Darby O’NeillPrinceton InsuranceVICE PRESIDENT – INDUSTRy RELATIONS Laurie MackloskyThe Travelers CompaniesVICE PRESIDENT – MARKETING & COMMUNICATIONSRod Travers The Robert E. Nolan CompanyVICE PRESIDENT – MEMBERSHIP Dottie AugustineAON Benfield, Inc.VICE PRESIDENT – SEMINARSTim MorganRepublic InsuranceVICE PRESIDENT – VOLUNTEER DEVELOPMENTChuck GunkelSwift Print Communications of St. Louis LLC

goVERnIng boARdPRESIDENT Beth MercierThe Travelers CompaniesPRESIDENT-ELECTForrest G. Mills, Jr. Guaranty Income Life Insurance CompanyBOARD CHAIRLouise Ziemann State Farm Insurance Companies (Retired)CHIEF FINANCIAL OFFICER Celeska Fredianelli North Pointe Insurance CompanyCHIEF INFORMATION OFFICERMary Ellen FreyermuthCatholic Relief Mutual Insurance Company

AT-lARgE boARd MEMbERSC. Rex Bagwell Ed KrugerSalient Commercial Indiana Farm Bureau Solutions Mutual Insurance CompanySonia Cliffel Brian OllechFirst American The Warranty Group Equipment Finance Thomas B. EwbankThe Ewbank Group P.C.

ASSoCIATIon STAFFEXECUTIVE DIRECTORJoseph P. PomiliaVICE PRESIDENT – BUSINESS DEVELOPMENTMark F. RothVICE PRESIDENT – CONFERENCES & EVENTSMargaret M. McKeonDIRECTOR OF CUSTOMER RELATIONSKathy HuberDIRECTOR OF EXHIBITSKim MorrisDIRECTOR OF MEMBER & VOLUNTEER SERVICESTricia StillmanDIRECTOR OF OPERATIONSGina H. JollyMANAGER, MEMBER SERVICESSheila White-SmithRECEPTIONIST/SECRETARyAngie Gurganus

Linda PaolucciTIAA-CREF

IASA provides a wide array of products, services and education events primarily geared toward our core knowledge areas of accounting/finance and systems/technology. While some IASA products are available only to members, other products may be purchased by nonmembers. IASA members receive discounts on products, services and event registrations which are typically 20 percent to 50 percent less than the non-member price.

Here are some of the key benefits available to member insurance companies, associate member companies and the professionals within these organizations:• Discounted admission to one of the best educational events in the industry – the IASA Annual

Educational Conference & Business Show.• Complimentary access to the IASA Knowledge Exchange, an Internet-based information

exchange where IASA members can easily network, ask questions, get answers and search data files based upon each person’s unique interest profile.

• Complimentary or steeply discounted registration for web-based seminars jointly sponsored by IASA and industry partners on timely topics of interest to our members.

• Access to the industry’s leading source of information and guidance on statutory accounting issue - the IASA Property & Casualty and Life & Health Accounting Textbooks – at a 20 percent discount.

• Up to six free subscriptions to IASA’s quarterly magazine, the Interpreter, which includes industry news, information and important details about association activities.

• Reduced admission costs for the Insurance Accounting Seminars offered by IASA, in affiliation with RR Donnelley, regionally throughout the year, and at the IASA Annual Conference.

• Quality financial products such as the State Checklist Manager, the State Filing Express, and the Annual Statement Database, which assist in the tracking and completion of state supplemental filings at a member-discounted price of 20 percent off the non-member price.

• A discount on exhibit space at the IASA Annual Educational Conference & Business Show for IASA member and associate member companies.

• Plus, great networking opportunities with peers and colleagues in the insurance industry.

IASA members enjoy many exclusive benefits. To find

out if your company is a member, or to start

using your benefits, visit www.iasa.org.

®

®

MEMBERS oNlY BENEFITS

This year’s IASA Management Team is led by President Beth Mercier of Travelers Companies (pictured third from left in the front row), and drives tactical projects designed to achieve the association’s critical operating goals.

2013-2014 IASA Management Team

Learn more about the IASA by visiting our website at www.iasa.org or by calling (919) 489-0991.

The Insurance Accounting & Systems Association, Inc. (IASA) is a non-profit, education association that strives to enhance the knowledge of insurance industry professionals, and participants from similar organizations closely allied with the insurance industry by facilitating the exchange of ideas and information. IASA is one of the insurance industry’s largest, and most well represented trade associations. IASA membership includes insurance companies of all types (Property & Casualty, Life, Health, Fraternal, HMO and others) as members, as well as companies serving the insurance industry, regulators and also organizations more broadly representative of the financial services industry, including banks and investment brokerage firms.

about IaSa

BECOME A MEMBERTODAy

To find out more about IASA,or to apply for membership,visit www.iasa.org, email Tricia Stillman, Director—

Member & Volunteer Services at [email protected], or call the IASA International Office at (919) 489-0991 x202.

IASA company membership is established on an annual, calendar year basis at a rate of $525 per

company per year. Licensed insurance companies are classified as regular

IASA members, and all other organizations (including solution

providers, associations and regulatory bodies) are classified as associate IASA members. Membership for

licensed insurance companies may be purchased at the holding company level for the main/parent organization and all affiliated entities at a rate of

$1,575 per year. Organizations with affiliated entities or regional

offices that do not opt for a holding company membership can purchase

an individual membership on a company and/or location basis.

Once a membership is established there is no limit to the number of

individuals that may be involved with IASA from each member company, and we encourage all professionals that might benefit from our products

and services to participate.

theInterpreter x www.iasa.org Fall 2013 5

W hen I was first

named President-

Elect for IASA, I

didn’t give writing this column

for each issue of the Interpreter

even a glancing thought. I

had bigger, better things on

my mind…an entire industry

association to inspire, impress

and ignite! But, as the beginning

of my term, and the inevitable

requests for quotes, testimonials

an articles loomed on the

horizon, I began to feel a little

apprehensive about it.

After all, I may think I’m

a rock star, but how best to

communicate my inherent

awesomeness in this format?

Seriously, I get up and face each

day as some combination of

industry visionary, insurance

expert, project manager, CPA,

therapist and career coach, but,

I put my (rock star) pants on

the same way you do. Further,

I’m betting I share professional

challenges similar to many of

you as well. So, the challenge

remained…what insights

and experiences could I share

in this column that would

have a positive impact on the

common consciousness of this

association?

Fortunately, a couple of

deep breaths (along with a

glass of red wine and some

good friends) and I was off

the ledge. The truth is, I realize

I’m not an industry visionary

or a career coach. In fact, what

makes me special is what makes

you special…it’s my personal

take on life, the universe and

everything, and more so, the

individual way that I approach

problems and problem-solving

that makes me a leader.

To me, being a leader doesn’t

always mean you have climbed

to the top of the corporate

ladder. You can be a leader at the

middle, or even at the bottom

rungs, but you absolutely MUST

be someone others look to as

aspirational and inspirational.

In order to be a leader, you have

to be able to inspire others to

follow.

And, I think it’s important

to note, that being a leader also

doesn’t always imply you have

ALL the right answers. In my

“real job,” project management,

strategy and execution are a

daily part of what I do, and I

am well aware that in our

meetings, I am not always the

most knowledgeable person in

the room. So, we put our heads

together and come up with

a plan, as a team. Teamwork,

and my knowing how to direct

and utilize the skills of team

members, makes us stronger.

Teamwork enables us to be

more efficient, and to be faster

as well. We can fail twice and

then succeed in the time it

takes some teams to get a single

initiative to the drawing board.

IASA brings together

a whole host of different

personalities and skill sets. The

association throws them all

together in a room, and leaders

emerge. Through my years as an

IASA volunteer, I became quite

adept at recognizing strengths

and skills in others. This skill

made me an effective committee

chair, a contributing team

member, and it honed skills I

still utilize every day at Travelers.

Bottom line, I’m not

different than you. I’m not

better than you. Not to go all,

“kum-bay-yah” on you, but, I

am you, and together we are all

stronger. I get inspired every

day by the talents of others.

I’m constantly impressed by

the selfless way in which some

of my co-workers, teammates

and fellow IASA volunteers

“give” over and over and over.

It’s why I believe so strongly in

this association. We’re building

ROCK STARS!

So, if you have colleagues

that haven’t yet decided to get

involved in IASA, or who need

some kind of confidence boost,

maybe it’s time to reach out and

touch someone…literally. I’ve

done it many times throughout

the years, and during this year

while I serve as IASA President,

I intend to continue doing it.

6 Fall 2013 theInterpreter x www.iasa.org

The Talents of Othersby BETH MERCIER

PRESIDENT’S MESSagE

Beth Mercier is vice president, personal lines, for The Travelers Companies, and this year’s IASA President. She can be reached for further information or comment via email at [email protected].

…being a leader doesn’t always mean you have climbed to the top of the corporate ladder. You can be a leader at the middle, or even at the bottom rungs, but you absolutely MUST be

someone others look to as aspirational and inspirational. In order to be a

leader, you have to be able to inspire others to follow.

‘‘

’’

IASA President-Elect (at the time of the photo) Beth Mercier uses her leadership skills to help inspire flash mob dancers during the 2013 IASA Annual Conference in Washington DC.

T he new IASA website,

scheduled for launch

near the end of 2013,

will present a new online face

for the association along with

several great enhancements

that can be enjoyed by all IASA

stakeholders. For some time, in

the background while other

important day-to-day tasks were

getting done, the IASA staff has

been hard at work upgrading

back office systems. This work

was a critical precursor to the

association’s website upgrade,

made necessary because data

files and activity records stored

in those back office systems

are closely integrated into

almost every part of the IASA

website experience for members,

associate member and customers.

The IASA team took a

lengthy and comprehensive

approach to setting goals and

establishing clear objectives

for the new website initiative.

Knowing that the new website

would need to add instant value,

and also provide a platform

for ongoing innovation, meant

IASA needed to understand and

assess both short-term needs and

long-term goals. Upon launch

of the new iasa.org, visitors will

instantly see that exhaustive work

demanded a completely new web

experience which will serve as a

runway for IASA into the future.

The forward-looking approach

we took on this project means

not only a better experience

today, but added innovations

on the drawing board for years

to come.

Here are some of the

enhancements you will soon

see at iasa.org:

1. User Experience: An

improved user experience was

one of the top priorities for

this project, and here’s what

that means specifically. First,

great efforts have been made to

ensure nearly every transaction

or item of needed information

can be completed or accessed

within two or three clicks. Part

of this quick and ready access is

a new simple, intuitive toolbar,

complete with dropdown menus

and auxiliary menus both at

the top and bottom of each

page. This new ease of use will

be packaged in a completely

new look that is sharp and

professional, and maximizes

the brand recognition of the

association. Front and center

on the home page will be an

animated content area designed

to highlight the most prominent

four or five current events or

activities.

2. Functionality: Improved

functionality means IASA

website visitors can manage

membership profiles, edit

personal preferences, make

purchases and register for events

more efficiently. Additionally,

IASA has invested in new

web-based tools that enable

easy access to hot topics and

new initiatives, and upcoming

local and national events are

highlighted more effectively

through a new IASA calendar

and enhanced menu displays.

Further, functionality IASA is

developing will provide the

association with the opportunity

and functionality to more closely

connect each individual to the

content most likely to be of

interest. Ultimately, the more

we know about each member,

the better IASA can serve their

interests with the website serving

as a helpful, powerful resource.

3. Community Building:

Last, but certainly not least, the

new website will be much better

at helping us build a stronger

IASA community. One of the

most important benefits of being

part of IASA is access to a vast

network of peers in the insurance

industry. Breaking that network

down into subgroups and linking

those subgroups through more

powerful online tools means

even more value to an ever-

growing membership base. At

the outset, we have focused on

building communities for local

chapters and volunteers, however,

we have also made it easier for

members to connect generally.

But, that is just the start, and

IASA has many future plans to

make further enhancements and

greater connections. As a part

of IASA’s community building

efforts, we are also considering

the various social media tools

available today, and how those

tools can be better integrated

into the efforts the association is

already making.

So, make sure you watch

for updates about the new IASA

website, and feel free to provide

us feedback on your experiences,

as well as ideas for future

enhancements that we might be

able to provide as part of future

online IASA services.

IASA Offers a New Online Experienceby JOE POMILIA

FRoM THE ExECUTIVE DIRECToR

theInterpreter x www.iasa.org Fall 2013 7

Joe Pomilia is the executive director of IASA. He can be reached for further comment or information via email at [email protected].

Editorial Opinion, continued from page 4

learning the “ins and outs” of auto,

property and medical claims, and

can see close-up what weather

and accident damage may look

like, while being schooled about

types of siding, replacement

values and safety on the job.

There are two complete

houses built inside the facility,

and ClaimU is also home to a

heavy equipment lab, a workers’

compensation classroom, and

soon, a full-scale medical lab as

well. The facility is nothing short

of mind-blowingly impressive,

and, without a word being spoken,

it quietly puts to rest any thought

or wish for the simplicity with

which these tasks were once

accomplished.

While the trip to ClaimU

made it evident there is no going

back to the simplicity of old, it

highlighted the commitment

of not only Travelers, but of

the industry at large, to doing

(sometimes overly) complex

things in a quality way. Pac-Man

long ago waned in popularity,

replaced by full-on, CG death and

dismemberment fests like Halo

and Grand Theft Auto. The world,

she is a-changing, and knowledge

that this is the case doesn’t stop

me (and perhaps some of you)

from longing for the old days

when all we had to do was eats

the dots.

P.S. – A special thanks to

Beth Mercier and Travelers for

an informative and educational

inside look!

8 Post-Conference 2013 theInterpreter x www.iasa.org

a decade after the

Sarbanes-Oxley Act

(SOX) took effect,

and almost three years after its

statutory sibling the Model Audit

Rule (MAR) became effective,

there are countless lessons

learned, as well as numerous

regrets from implementing these

pervasive regulations. In spite

of having to learn some very

hard lessons, many insurers have

improved compliance efficiencies

utilizing guidelines put in place

by these regulations, which have

further evolved since the early

years of implementation.

Most insurers’ first reaction

after the initial year of SOX/

MAR was acknowledgement of

the enormous implementation

costs, both in terms of hard

dollars spent on consultants and

increased external audit fees,

and the soft costs resulting from

lost productivity and efficiency.

A major factor contributing

to the high implementation

costs for most insurers was

the steep learning curve in

applying and documenting the

concepts from the Committee

of Sponsoring Organizations

(COSO) framework. The

companies that were the least

successful and incurred the

highest costs implementing SOX/

MAR were those who focused

on the individual controls or

components of controls. The

successful implementers took a

holistic approach, looking at the

significant risks and the controls

that address those risks.

This efficiency differentiator

will be the same when

completing an Own Risk and

Solvency Assessment (ORSA).

Fortunately for insurers, there

are many lessons from the

best of class SOX and MAR

practices that can be applied

to ORSA implementations. A

truly strategic effort might

look to reduce overall costs by

understanding that an optimized

“lean” process is not only more

efficient and less costly, but also

inherently more effective and

compliant and thereby also less

costly to document, maintain

and validate compliance.

What is ORSA?Under a definition by

the National Association of

Insurance Commissioners

(NAIC), “ORSA is an internal

assessment of the comprehensive

risks associated with an insurer’s

business, and the evaluation

of the sufficiency of capital

resources to support those risks.”

Also according to the NAIC,

ORSA has two primary goals,

which include:

• Fostering enterprise risk management (ERM) which ensures insurers identify and quantify materials and “relevant risks using techniques that are appropriate to the nature, scale, and complexity of the insurer’s risks,” and

• Providing “a group-level perspective on risk and capital, as a supplement to the existing legal entity view.”

In the past, regulators have utilized historical measures, such as surplus and Risk-Based Capital (RBC), to gauge an insurer’s ability to meet its policyholder’s obligations. ORSA is now asking a different question which is forward looking, “Does an insurer have enough capital for what lies ahead?”

Insurers and Compliance In reading the NAIC’s

ORSA Guidance Manual, one

quickly notices the core concepts

which are being applied to

ERM are very similar to the

core concepts an organization

applies to achieve and maintain

internal control over financial

reporting, which was the focus

of SOX/MAR. Both ORSA and

SOX/MAR principles are the

same, however, ORSA is more

focused on future uncertainty,

more comprehensive, and more

subjective.

The similarities between

SOX/MAR and ORSA are

striking:

1. Leveraging What You

Already Do: Internal controls

over financial reporting were

not invented as a result of SOX/

MAR. The demand for quick,

accurate financial information

has always led insurers to

execute internal controls. The

challenge of SOX/MAR was

to document, assess, monitor

and validate these existing

control processes. The same

can be said for ORSA-covered

risk management processes.

In fact, it would be safe to say

every solvent insurer engages

in multiple, overlapping, forms

of risk management activities

on a daily basis. One could

quickly look at the resiliency of

the insurance industry after the

recent credit crisis to evidence

this observation. How well or

poorly these risk management

activities are documented could

be subject to argument, but there

is no doubt they are certainly

being performed. Completing

the ORSA assessment will be

a significant task which will

require significant resources.

The primary challenge with

SOX/MAR was documenting

assessments, monitoring, testing,

reassessment, and compliance

validation by external parties.

Although ORSA will not

require external validation, each

department of insurance (DOI)

may request further information

FEaTURE SToRY

5 Things Every Insurer Needs To Know About ORSA

by ADAM COLLyER and GABE ZUBIZARRETA

ORSA is an internal assessment of the comprehensive risks associated with an insurer’s business, and the evaluation

of the sufficiency of capital resources to support those risks.

‘‘’’

theInterpreter x www.iasa.org Post-Conference 2013 9

to corroborate management’s

process and validation

techniques to complete their

assessment, and will also most

likely be scrutinized by rating

agencies during their review

process.

2. Compliance Cost/

Benefits: It could be argued there

were benefits from enhanced

documentation of business

processes and controls from

SOX/MAR. However, no one

would question the significant

costs and lack of implementation

efficiency. The benefits from

enhanced documentation and

understanding of ORSA are

still unknown, but, there is no

doubt there will be initial and

ongoing costs. The proposed

enhanced documentation will

require a more detailed linkage

of how business operations

relate to solvency assessment

and risk management strategy.

Just as with the SOX/MAR

implementations, ORSA

implementation will contain

some opportunities to review

and increase operational risk

management efficiencies. The

key to any successful ORSA

implementation will be to

consider how to reduce the

implementation costs and

increase the ancillary benefits

on compliance. Under Section 1

of the ORSA report, an insurer

will need to describe their Risk

Management Framework, and

it is likely most insurers will

utilize the new updated COSO

framework for this purpose.

Because the concepts of ERM,

governance, and organizational

design will align between SOX/

MAR and ORSA, there is a

potential to leverage some of

these efforts to revisit and

reduce some of the ongoing

SOX/MAR costs.

3. Flexibility: Like the

internal control over financial

reporting guidance for SOX/

MAR, the ORSA guidance is

not prescriptive. Companies

are being asked to formalize

and document their risk

identification, measurement and

prioritization processes. The

NAIC’s ORSA Guidance Manual

conveys the regulators’ intent

to understand the insurer’s risk

management practices rather

than stamp press insurers to

the form and content of their

filings. This flexibility, although

appreciated, presents its own set

of challenges and opportunities

in completing ORSA. The NAIC

has not provided sample filings,

due to the proprietary nature

of the assessment, and many

insurers will struggle to envision

the end product. There also

exists a risk that some insurer’s

challenge will be limiting the

volume of their filing rather

than providing a concise

assessment which is digestible

and meaningful to its users and

regulators. A comprehensive

solution which helps companies

perform risk management

procedures more efficiently

and assists with the compliance

efforts will provide a solid

framework to prepare a concise

ORSA filing.

4. Internal Education:

Transitions to comply with

SOX/MAR requirements are

significantly more efficient

when companies educate

their employees. Companies

benefit from choosing to

educate awareness to the entire

corporation about the basic

nature of the new compliance

project. Companies seeking

more successful and efficient

implementation efforts will also

establish a formalized education

program to clarify expectations,

roles, and responsibilities for the

more affected parties. Consistent

with lessons learned from the

SOX/MAR implementations,

a comprehensive education

strategy can reduce resistance,

efforts and errors and stress

on an entity. Some employees

may be able to describe

their business process, but

not understand them in the

context of completing an ORSA.

Lastly, education will reduce

internal change resistance from

business managers who will

question whether this is part of

their responsibility. Given the

department crossing nature

of ORSA, it will be imperative

to define and describe to

department heads their roles

and responsibilities needed

to identify risks and develop

monitoring techniques and

responses.

5. Change After Year One

Will Be Difficult: Cutting the first

path through the jungle is very

difficult, but not as difficult as

cutting the second path when the

first path has already been laid.

Most companies felt comfortable

after the initial implementation of

SOX/MAR because of the library

of three-ring binders filled with

control matrices and narrative

documentation. This process lent

to the belief the controls were

set in stone once they had been

placed in “the binder.” After all,

everything is all tidied up and the

auditors have already opined on

them. The same may be true after

their initial implementation of

ORSA. Companies may struggle

to improve their assessment

after their initial report has

been filed. The challenge will

be for insurers not to allow

stagnant risk documentation

to be rolled forward year after

year, keeping costs high and the

meaningfulness of the ORSA low.

As the people, processes and systems for financial reporting, SOX/MAR, and now ORSA, become ever more interwoven and dependent on clear, accurate and timely information, it becomes ever more important for insurers to optimize and improve compliance processes. More importantly, an insurer must acknowledge a continuous improvement mindset doesn’t miraculously appear within an organization. There must be a catalyst to enable such changes within an organization. It will be the responsibility of senior management to drive these initiatives, which will keep their associates actively engaged, while driving down cost.

Adam Collyer is the lead manager of the assurance and business advisory insurance practice for Kansas City-based MarksNelson LLP, and Gabe Zubizarretta is the founding principal of Silicon Valley Accountants. Collyer and Zubizarretta can be reached for further comment or information via email at [email protected] and [email protected] respectively.


Building on the SMAC Stackby NIMISH SANKALIA

TECHNologY VIRTUal RoUNDTaBlE AND THE EXPERTS WE FOUND TO ANSWER INCLUDE:

Steven M. CallahanCMC, Practice Director –

The Nolan Company

Jake DinerCEO – Driveway Software

Jim KeeleyIndustry Principal – CGI

Anne KraskeVice President of Product Management – Adaptik

Douglas A. MooreCTO – ISCS

a s is the tradition with

this column, we go out

into the vendor, analyst,

consultant and service provider

community for each issue and

ask individuals to opine on hot

topics, industry trends and the

future of insurance at-large. This

month, we asked, “With social,

mobile, analytics and clouds

(SMAC) platforms/technologies

becoming more mainstream,

what’s the next step? As some

companies try to incorporate

telematics data and lean more

toward self-service portals,

others are already exploring

gamification. How does your

company intend to build on the

SMAC platform to better serve

insurance customers?”

CALLAHAN/NOLAN The gradual convergence of

data-rich, social media with

powerful analytics tools has

brought a wealth of data to be

translated into information

leading to better decisions, less

fraud, more accurate ratings,

and even faster service. Mobile

technology offers the ultimate

in personal computing devices,

putting the power of yesterday’s

desktops literally in the hands

of consumers. Given the rate

of change and the constant

flow of advanced technology,

the variable cost management

and fluid platform offered by

the cloud wraps these newer

solutions in together as it

offers low cost of entry, agile

adaptation to change, and

controllability of IT expenses to

an expense strained industry.

What’s next? Look to the

latest acronym for the next

step in newer technologies:

SoLoMo. Further leveraging

social media (So) and mobile

devices (Mo), SoLoMo adds

location intelligence into the

mix (Lo). Whether via the GPS,

usage-based insurance (UBI)

hardware or newly-embedded

sensors, SoLoMo brings real-

time awareness to the already

dense personalized data available.

The idea of SoLoMo is to create

new services and products that,

like UBI, can be fee-based, real-

time, and leverage a combination

of location, personalized

data, mobile access and need.

Examples include remediation

services, child and elderly

safety monitoring, business

interruption, and immediate

dispatch of distinct services.

While these technologies,

however combined, offer a rich

toolset with which companies

can leverage competitive

advantage and advance their

profitability, there remains a

permanent foundational shift

towards customer centricity

and the “electronification” of

insurance. Never before has the

phrase “know your customer”

been more critical, nor more

achievable, as the depth of

personal, organizational and

materially based data elements

exceeds even the label “Big

Data.” Technological visionaries

are now referring to the digital

information that envelopes

us as we move through the

world as our “code halo,” with

the next leap in service based

on the ability of businesses

to “see,” interpret and use the

information in that halo to

personalize our every touch

point and service experience.

Despite the potentially

overwhelming technological and

informational advances, careful

leaders should keep Theodore

Roosevelt’s quote in mind when

evaluating adoption rate and

With social, mobile, analytics and clouds (SMAC) platforms/technologies becoming more mainstream,

what’s the next step?‘‘ ”

Nimish Sankalia is head of marketing and alliances for MajescoMastek, and a volunteer for the IASA Marketing and Communications Committee. Prior to each issue of IASA’s Interpreter, Sankalia solicits industry experts for opinions and insights into hot technology topics that are currently in focus for insurers. If you would like to suggest a topic idea, or potentially participate in a future Technology Virtual Roundtable, please contact him via email at [email protected].


TECHNologY VIRTUal RoUNDTaBlE

implementation speed, “Keep

your feet on the ground and

reach for the stars.”

DINER/DRIVEWAyWe are already delivering on

an SMAC platform to serve

our insurer clients, and, by

association, their customers. We

focus on telematics for auto

insurers, and we’ve learned that

when it comes to telematics, the

consumer wants to experience

real, immediate and tangible

value. Unless that requirement

is met, the platform used is

irrelevant. Without immediate

value, insurance customers (i.e.

drivers) won’t waste time and

effort using self-service portals,

regardless of whether they are

viewing results on a full-screen

web page or their smartphone

screen. Sure, there will always be

the technology enthusiasts with

the curious minds, but they will

not be the mainstream users.

So, insurers first have to

identify the value they are

trying to deliver to the insured

through telematics, then they

can determine the best platform.

If the objective is immediate

feedback and value, a smartphone

is an obvious platform choice.

There are already 150 million

in use, and the number is only

growing. At Driveway Software

we use the smartphone as our

platform of choice for driving

data collection, doing some basic

analysis, providing immediate

driver feedback, and uploading

data to the cloud for more

extensive analysis by the insurer –

enabling insurers to more closely

engage with the insured, monitor

driving habits and skills, and offer

timely rewards for good drivers.

KEELEy/CGI What’s been interesting from

our perspective is how different

geographies have had varying

levels of adoption for initiatives

like SMAC. Our approach has

really been about the data and

being able to consume that

data in a way that allows us

to improve the underwriting

process. By focusing on the

usage of the data, it means that

regardless of the channel, tool or

method by which it’s collected,

we’re in a position to improve

these processes for insurers.

We’ve been working closely with

some markets that have been

early adopters of approaches like

SMAC, and we think it’s just a

matter of time before it becomes

more mainstream in the U.S. I

think that the only real hurdle is

the quality and relevance of the

data that’s captured, so, we’re

spending a lot of time analyzing

what we’re collecting to make

sure it’s useful and relevant. I

think that we’re close to that

tipping point where insurers will

“trust the data” and really start to

embrace it here as they have in

other parts of the world.

KRASKE/ADAPTIKYou’re going to get SMAC’d. Be

ready. The tidal wave that is

SMAC is here, and it is relentless.

Every day, new capabilities

and trends appear. Some have

staying power and some have

value only for the moment and

are soon bested by the next big

thing. How do you invest in the

winners without exhausting your

capital on the also-rans? Our

solution at Adaptik is to invest in

simplifying integration. We don’t

limit our customers with just our

own mobile applications, portals,

analytic engines, etc. What we do

is enable our customers to plug

and unplug to the latest, greatest

thing from their point-of-view

and to make it easy.

This approach allows us

to stay focused on our core

competencies while giving

customers the opportunity to

take advantage of solutions in

the SMAC spaces that they prefer,

have existing investments in, or

want to capitalize on quickly.

The cloud aspect of SMAC

provides slightly different

opportunities and challenges.

From Adaptik’s perspective, the

greatest challenge is simply

customer comfort with off-

premise technology. Concerns

are generally around security

and control. As cloud experience,

capabilities, and options grow,

so does the appetite. At Adaptik,

we envision our cloud based

offerings will take off over the

next two years.

MOORE/ISCSInsurers and their vendor

partners must open up if they

expect any kind of ROI, or return

on intelligence, from the SMAC

stack. In just a handful of years,

an expected 100 billion devices

will be digitally interconnected

via social, mobile and cloud

technologies. While the

proliferation of smartphones and

tablets drove initial growth, new

trends in wearable computing,

smart appliances and home

automation have provided an

exponential boost.

Customers are 24x7 and

expect easy, seamless access

to products and services

across every device they use to

manage their lives. Increasingly,

participation in the digital (or

data) economy will require

insurers to open core systems

in ways that go well beyond

what they’ve been comfortable

with in the past. So, what’s the

next step?

Arguably, the first and most

critical step toward participating

in SMAC developing a solid,

secure application program

interface (API) strategy. APIs

bind apps and ideas to critical

business logic in the cloud. At

ISCS, we started our big data and

mobility initiatives by designing

a multi-layered API based on

modern web standards. The

payoff was immediate. Within

weeks we had iOS, Android and

HTML5 portal applications

tapping the full power of our

existing underwriting, claims and

billing web services. We are now

focused on creating the seamless

experience that customers expect

as they collaborate with insurers

via their browser, smartphones

and tablets.

SMAC has driven us beyond

building and integrating

modules that co-exist within

an enterprise or best-of-breed

solution. Instead, we are moving

toward co-creating solutions

in a content-driven world of

apps. If SMAC truly is a global

dashboard of apps and services

that complement and add value

to core insurance products, then

weaving those together via open,

secure APIs is a logical path to

follow. Insurers, by opening up,

will reap more data and insight

than ever before imagined; and

that, in itself, will result in a

higher return on intelligence.


Editor’s Note: The Executive Corner column is a regular feature in IASA’s Interpreter.

The column focuses on interviews of industry leaders and company executives in an attempt to gain insights into successful business practices, views on the future, and much more. This interview highlights the experience and leadership of Kevin Bergner of USAA.

Sullivan: As a major national

carrier, most of our readers

know who USAA is, but from

your perspective, give us a little

background and insights on the

organization. How has it changed,

and where are you today?

Bergner: I think the most

important thing to understand

about USAA is that we’ve stayed

true to our original purpose.

In 1922, a group of about 25

Army officers got together in

downtown San Antonio at

the Gunter Hotel, and talked

about the difficulties they all

had getting insurance. They

made an arrangement to insure

one another in what was really

an early form of reciprocal

insurance. They trusted each

other because they had a shared

sense of values. This agreement

was built on a very simple

mission – to take care of one

another.

So, here we are 91 years

later, and USAA is a lot bigger

and provides a full range of

financial services. We’re growing

to about ten million members

this year, and we still have that

exact same focus on looking

out for one another that our

founders had back in 1922.

Our purpose and identity have

evolved as times have changed,

but our fundamental focus of

why we exist and who we serve

is still intact.

Today, we still serve the

military community and their

families. The commitment to

serve our country and the values

that our men and women in

uniform and their families ascribe

to is what makes this association

a special place. We have about

26,000 employees today who are

highly committed, and we’re a

direct model, so our members get

to know us on the telephone, by

email, mobile, chat or face-to-face

in our financial centers.

I’m frequently asked to give

an example when I talk about the

best members in the world. In

one case, a long-term member’s

wife lost a valuable piece of

jewelry and they filed a claim

with us, which we promptly paid.

A year later, he sent us a letter

saying they’d found the jewelry,

and attached to the letter was

a check for the exact amount

of the claim – a year later. His

note said, “My deepest personal

thanks for being the best and

most professional insurance

company around. We have

been doing business with USAA

for over 50 years – insurance,

annuities, CDs, IRAs, mutual

funds, etc. – and you have

always been tops. Your integrity

is unmatched.” We are blessed

to have members who are just

tremendously moral, ethical and

honorable people.

Another thing we keep top

of mind, and our employees are

acutely aware of, is that many

of our members have been in

really tough, far-away places, like

Afghanistan or Iraq, doing the

heavy lifting for our country.

Keeping this in mind sharpens

our focus on service and making

sure that we are relevant to their

current situation.

What about your military

background has enhanced your

abilities for running a business?

Beyond the fact of your

membership, you’ve got to be

profitable and grow premium.

Bergner: I would say it

starts with my dad who was an

Army colonel. I grew up in San

Antonio and recall driving with

him by the building where USAA

used to be located. I remember

him telling me, “USAA is

one of those places that truly

understands me as an Army

officer.” This was just after

Vietnam, and our military was

viewed much differently then. He

had deep regard for USAA and

wherever we moved, whatever

post, camp or station, USAA was

with us.

When I was commissioned

as a lieutenant in the U.S. Army,

my dad administered the oath to

me. After I finished, he looked

me in the eye and said, “Kevin,

there’s just one thing I need

you to do. Take care of your

soldiers, and they’ll take care of

everything else. Take care of the

people you’re responsible for,

they’ll take care of the nation.”

Over the years, I have come to

understand the importance of

that charge, and I have worked

really hard to fulfill that mandate

to be a servant leader.

When I arrived at USAA, I

found, and have been humbled

by, a group of people who are

An Interview with Kevin J. BergnerPresident – uSAA Property and Casualty Insurance groupby DENNIS B. SULLIVAN and STEVE DISCHER

ExECUTIVE CoRNER

continued on page 14

Kevin J. BergnerPresident – USAA Property and Casualty Insurance Group

IMPRE

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just as committed in a very

different way. My mandate is the

same: Take care of the people

here at USAA, so they can

take care of our members and

provide world-class service. I

think that servant leadership is

one of the key underpinnings of

our management style at USAA

along with our commitment

to our workforce and our

members. You’ll also find

tremendous accountability and

understanding of being good

stewards of resources among our

management team.

Sullivan: USAA is among a

group of direct writers who have

long, successful track records.

What are the advantages of the

direct model that allows you

to compete nationally, multi-

line, but stay nimble enough

to compete with the smaller

regionals?

Bergner: The unique aspect

of the direct model for us is how

well we know our members and

our strong commitment to and

understanding of their needs.

Taking care of our members is

the focus of our business model.

It’s the unifying, galvanizing

force for us, and, as a result, our

members have a really high

degree of trust that we will put

their interests first. From a direct

service standpoint, I feel our

claims group has taken on the

challenge of achieving the best

expense discipline possible. The

combination of ensuring our

members’ trust and an intense

focus on expense discipline to

make sure we serve them well,

help us to meet the competitive

pressures in the marketplace.

Discher: What are your thoughts

on the external environment in

terms of how USAA continues

to present itself to the market

and effectively compete in the

long run?

Bergner: I think the

biggest factors we are mindful

of right now are the changes in

technology. In particular, our

members expect us to serve

them and be relevant to them on

mobile.

The speed at which

technologies are developing and

evolving these days is having

a profound implication. For

example, we’ve invested in a

capability called Young Drivers

Intelligence. It’s a telematics

device that a parent can put in

their automobile to monitor

a young driver’s performance.

It allows the parent and

young driver to have a better

understanding of their driving

habits in order to become better

drivers. Ultimately, for us it’s all

about saving lives. At this point,

we don’t collect the data. We

don’t use it for rating purposes.

It’s free, and we make it available

to young drivers and their

parents. It’s not about ROI. We

put it in the category of doing

the right thing.

Discher: How are you using

technology to make members’

lives easier while they’re

deployed?

Bergner: The nature of

deployment is that someone is

overseas and someone is still at

home. Our members are most

likely to use social media as a way

to stay connected, in particular,

they use Skype. We challenged

ourselves to meet members

on their terms and created an

interface that we call the Claims

Communication Center. It’s a

place where members can post

photographs or where we can

answer their questions. There’s

a very comfortable feel to it, and

it’s very responsive.

More and more these

technology-enabled social

domains are where our members

prefer to have their conversations.

We’re challenging ourselves

to be in those places for them.

Today, it’s defined largely

around the claim, however, we

see it becoming the way we

communicate over the lifecycle

of the member.

Discher: One thing that’s

interesting about USAA is your

ability to provide a diversity of

products and services. Can you

talk about innovations and the

linkage between those services?

Bergner: A key component

of how we serve our members

is on an integrated financial

basis. Increasingly, we expect

to have conversations with our

members that are well informed

by banking implications

or capabilities, investment

opportunities, and insurance

needs as well. It comes together

quite clearly when there’s a total

loss, for example.

A retired Army Colonel

and his wife lost their home in

Colorado Springs and when we

settled with them, we were able

to put it directly into their bank

account with an electronic funds

transfer. Our wealth manager at

our Colorado Springs office was

able to advise them about their

opportunities, and they didn’t

have to talk to anybody else – it

was all arranged for them

through their adjuster. The ease

of use and the simplicity that

this provides to our members,

is something that has great

opportunity – especially, if the

situation is complicated by one

spouse being off on deployment.

And, that integrated financial

services capability is a really

key benefit.

Sullivan: It’s critical to

point out that a lot of people

in the insurance industry

don’t understand the whole

deployment issue. It goes beyond

just getting an auto claim paid.

There’s a financial impact, there’s

job loss time, as well as a number

of other impacts. What is unique

in your approach?

Bergner: It is a unique

situation. I spoke with the wife

of a three-star general who told

me that USAA was the only

organization that called her up

every six months to say, “How

are you doing?” It was simply

to check in with her and ask if

there was anything we could

do to help. That meant a lot to

her. We’re concerned with being

relevant to the deployment and

ExECUTIVE CoRNER

Interview with Kevin J. Bergner, continued from page 12

More and more these technology-

enabled social domains are where our

members prefer to have their conversations.

We’re challenging ourselves to be in those

places for them.

‘‘”

having the kinds of capabilities

to serve members as they prepare

to deploy—store a car, secure

their household goods, change

their insurance products to

reflect that—and then help them

when they come back. There is

a significant adjustment that

takes place when he or she

returns from a faraway country

with a whole different level of

adrenaline in their lives. I know

this very well because my wife

has told me that I went through

it as well. We work hard to

help our returning warriors

understand that risk, especially

during the first six months that

they’re home. We incentivize

safe driving during the first six

months, because if you get them

through that period they’ve

generally re-acclimated after that.

And, we work with the Military

Safety Centers to share our

research about the risk that exists

when they come back.

Discher: You spoke about the

notion of servant leader, and

your philosophy of carrying

that across the organization and

leading by example. How do you

permeate that across the entire

culture of your organization?

Bergner: If you looked up

the definition of servant leader

in the dictionary, our CEO,

Joe Robles’ picture should be

there. He is without question

the most caring, the most

employee- and member-centered

person you could have running

a business. Joe sets forth a very

straightforward commitment

to take care of the people we’re

responsible for. If you walked

around our campus you would

see that manifest itself. We

engage with and listen to our

employees, and that takes a

lot of different forms. We use

Gallup surveys as a mechanism

for gauging, but I use a much

more basic management

approach – I walk around and

talk to employees, listening to

what they’re working on and

understanding whether the tools

they’re using are effective or not,

where the glitches are. I use their

input to hold us accountable

to work on those issues and

improve their capability to do

their job.

Our employees ultimately

are all about taking care of the

member. Their engagement

helps to shape innovation. Over

90 percent of them have been

involved in some activity with

innovation this year, and they

are just generally committed to

helping us be a better company.

That focus on servant leadership

has a real clear identity around it

and it really does start with our

boss. It’s exactly what Joe expects

us to do—take great care of those

employees who in turn help us to

better serve our members.

Sullivan: We talked earlier

about the economy and

healthcare issues – about

people being out of work and

losing coverage. How have your

membership and your employees

been affected?

Bergner: Our members,

being largely military, typically

don’t have a lot of money. When

the economy slows down they’re

affected by it. We work really

hard to find ways to better serve

them in those circumstances. For

example, we have an area within

USAA Bank that assists our

members who are experiencing

financial difficulties. That area

works to restructure, reconfigure,

and keep them within their

responsibilities – whatever loans

that might be – we’ll do what we

can, consistent with regulatory

requirements, to avoid having to

foreclose or close out their line

of credit. It’s the right thing to

do – even when it is going to cost

us money – and, it’s how we take

care of our members who want

to work with us.

Sullivan: As you look at the

future of the insurance industry,

what are the challenges USAA is

anticipating, and what are you

doing to get ahead of the game?

Bergner: s we look ahead, I

can’t help but be struck by the

potential changes technology

could manifest. It’s tough to even

say what those might be. Five

years ago, could you picture a

smartphone that was going to

do what it’s doing for you today?

Technology will continue to

impact our business in many

forms. Our challenge is to be

agile enough to adapt to the right

technology for our members

benefit.

I think there are

opportunities for much more

control from a loss prevention

standpoint in the home. On

the other hand, we have some

serious technology use challenges

today with distracted driving

and texting, which people

don’t take as seriously as they

should. Having lost my mother

to a drunk driver when I was 10

years old, I know all about the

tragedies of preventable loss.

We’re in a similar circumstance

today, and I really do hope that

we don’t have to just rely on

generational change to deal with

distracted driving.

Sullivan: Do you have any final

thoughts that you’d like to share

with our readers?

Bergner: My last point is

to encourage everyone to think

about the commitment of the

military men and women who

are deployed around the world,

serving and taking care of this

country so you and I can enjoy

a comfortable life with little

concern for our security. USAA

has made a commitment that 30

percent of new employees will

either be a vet or the spouse of

a vet. We are right on that target

today.

Every company out there

has the opportunity to attract

these wonderfully responsible

and motivated people to work

for them. We really have an

obligation as a country to take

care of those young men and

women. They volunteered to

serve and protect us. We should

volunteer to take care of them

when they need a job. My hat is

off to my peers who are making

this a reality.

ExECUTIVE CoRNER


This is the 31st in a series of interviews conducted for IASA’s Interpreter by Dennis B. Sullivan, Chairman and Chief Executive Officer, and Steve Discher, Executive Vice President, of The Nolan Company, a management consulting firm serving the insurance industry with offices in Simsbury, Connecticut and Dallas, Texas. Sullivan and Discher can be reached for further comment of information via email at [email protected] and [email protected] respectively.

16 Fall 2013 theInterpreter x www.iasa.org

E nterprise Risk

Management (ERM)

is often thought of as

a discipline in which only

the largest corporations

engage. Yet, in today’s business

environment, both the Davids

and the Goliaths engage in risk

management activities without

necessarily putting a formal

framework in place or realizing

the extent to which they

intuitively manage risk.

Risk management is

instinctive in humans, in fact,

it’s almost reflexive in nature.

Just consider the rapidity with

which you pull your finger

back from a flame. In contrast,

risk management is more of a

learned response for businesses,

just as we choose to stop or go

at a yellow light, or plan how

early to leave home to catch a

flight. Perhaps it goes without

saying, but the management of

enterprise risk typically proves to

be more difficult than managing

personal risk.

The discipline of ERM has

surged to the forefront of the

business world thanks to a series

of corporate failures in recent

history. Enron, WorldCom,

and AIG, among others, can be

credited with engendering an

ERM mentality among regulators,

and the trend toward ERM is

only increasing. However, there

are a number of benefits that

ERM provides in addition to

remaining in compliance.

A successful ERM program

helps minimize the financial

threat to which disruptions and

losses expose an entity. ERM also

increases stakeholder confidence

by showing the entity has

considered the effects of risk on

its interested parties. Ultimately,

planned risk-taking activities

resulting from ERM can provide

an entity with opportunities to

increase operational efficiencies

and reduce the cost and impact

of catastrophes.

Many entities understand

the benefits of ERM, yet struggle

to implement or envision its full

potential. Unguided, an ERM

program can consume a large

amount of time and resources,

and, as a result, many entities

never fully employ a functioning

ERM program. One way an

entity can be successful is to

identify a framework as a basis

for its ERM program. Once a

framework is adopted, an entity

can begin customizing the ERM

program to meet its specific

needs, goals, and objectives.

FRAMEWORKSWhile there are many

ERM frameworks in the

business world today, the

three most prevalent in the

insurance industry are COSO,

ISO 31000, and the Casualty

Actuarial Society framework.

The following summarizes

similarities and differences

between these three alternatives.

COSO Integrated FrameworkCOSO released its Integrated

Framework in 2004, seeking to

integrate an ERM framework

with its widely-known and

utilized controls framework.

Its intent was to provide a

readily usable framework

for management to evaluate

and improve existing ERM

process. According to the COSO

framework, the objectives of the

ERM process are:

•Aligningriskappetiteand

strategy;

•Enhancingriskresponse

decisions;

•Reducingoperational

surprises and losses;

•Identifyingandmanaging

multiple and cross-enterprise

risks;

•Seizingopportunities;and

•Improvingdeploymentof

capital.

The COSO Integrated

Framework breaks down the

achievement of objectives into

four main categories: Strategic,

Operations, Reporting, and

Compliance. By focusing ERM

efforts on these four main

components, entities are better

able to align ERM activities’

functional business areas within

their existing framework.

ISO 31000The international

counterpart to the COSO

framework is the International

Organization for Standardization

(ISO) 31000. ISO has long

been an integral part of safety

and risk management for

companies worldwide, and its

standards are utilized by many

governing bodies, including the

Occupational Safety and Health

Administration (OSHA).

ISO 31000 was developed

subsequent to the COSO model

and has a similar theory. Like the

COSO framework, ISO 31000

describes the need to identify risk,

a company’s risk appetite, and its

risk mitigation strategy. However,

ISO 31000 differs from COSO

when it comes to ERM program

implementation. According to

ISO 31000, the four main steps

in the ERM process are:

•PlanningandDesigning;

•Implementingand

Benchmarking;

•MeasuringandMonitoring;

and

•LearningandReporting.

By focusing on these four

main steps, companies are

expected to take a top-down,

entity-wide approach to ERM

activities, which differs from the

more decentralized COSO model.

Casualty Actuarial Society The Casualty Actuarial

Society (CAS) established its

ERM framework before the

COSO Integrated Framework

or ISO 31000. Developed in

2003, CAS created a framework

that addresses four types of risk

within one repeatable process.

The approach focuses more on

individual risk identification

than the largely holistic COSO

and ISO frameworks, but is still

meant to be conducted on an

entity-wide scale.

The CAS framework’s four

risk types are hazard, financial,

operational, and strategic

risk. By focusing on these four

types of risks, an entity should

be able to identify both wide-

scale and granular risks to the

enterprise. The CAS framework

also establishes a seven step

framework for processing and

mitigating risk:

•EstablishContext;

FEaTURE SToRY

Enterprise Risk Management: An Introduction to a Scaled ApproachBy CONRAD LEVESqUE AND KIA BICKEL, CPA

•IdentifyRisks;

•Analyze/QuantifyRisks;

•IntegrateRisks;

•Assess/PrioritizeRisks;

•Treat/ExploitRisks;and

•MonitorandReview.

Each risk type should be

addressed at each of the levels in

the process, effectively creating a

risk matrix.

Key Elements of ERMERM is not an exact science,

nor is it a discipline reserved

for the largest corporations.

While ERM is often thought of

as a massive undertaking, it is

important to remember that

ERM is not a one-size-fits-all

seatbelt. Entities that implement

ERM will need to make decisions

and customize whichever

framework they adopt to fit the

individual needs and goals of the

organization. While there are a

number of different processes,

programs, steps, and activities

that make up ERM, there are a

few key elements that should be

included in every ERM program:

1. Support and Interest of the Board of Directors and Upper Management: In order for ERM

to be successful, it truly must

start from the top and integrate

itself within the organization

downward to the front-line

employees. Without the full

support of the board and upper

management, the process does

not communicate a sense of

accountability and responsibility

to the employees, whose buy-in

is crucial.

2. Clearly-Defined Risk Appetite: Risk appetite is defined

as the amount of, tolerance

for, and attitude toward, risk

within an organization. Some

organizations have a higher risk

appetite than others. In order to

create a successful ERM program,

an organization must define how

it currently addresses risk and

then quantify and qualify the

amount of risk with which it is

comfortable.

3. Ability to Quickly Identify and Analyze Risks: The process

of identifying and analyzing

risk does not lie only with

upper management. Front-line

employees can often identify

tangible risks and articulate how

they could impede an employee’s

ability to fulfill the primary

objectives of his or her job

before management recognizes

these same risks. When the

organization’s risk appetite is

clearly disseminated among

the organization through a

top-down approach, employees

are able to distinguish between

risks that need management’s

attention and risks that do not

require attention.

4. Process for Monitoring and Reporting Risks: Even if an

organization identifies and has

a clear strategy for mitigating a

risk, those responsible for ERM

can’t determine the effectiveness

of the strategies put into place

without a continuous feedback

and results measurement

protocol. As discussed above,

the Board of Directors and

upper management need to be

the driving force behind ERM.

A successful ERM program

includes a clear process for

monitoring and reporting risk

management activities and their

effectiveness to those charged

with governance.

5. Risk-Aware Culture: In

order to develop a risk-aware

culture, management and the

Board need to first understand

the entity’s current culture. Risk-

conscious employees help drive

the success of ERM, with the

reverse being true as well. When

management fails to create a

culture of risk awareness, the

ERM program turns into an

exercise in futility.

But What if I’m a Smaller Organization?

While there are many

benefits to ERM, smaller

entities often struggle to see

how they can implement such

a program. Many entities

see the above-referenced

frameworks as applying only

to large corporations that have

the resources to implement a

large-scale program. This notion

is often false. While the ERM

frameworks are built with the

capacity to address large entities,

they are also designed to be

scalable to all sizes of entities.

The five key elements of effective

ERM programs described above

can be customized to fit any size

organization.

When implementing or

evaluating the ERM frameworks,

remember that they are simply

guides to help implement a

program. Each management and

governance team must decide

what will best allow the entity to

meet its goals and objectives.

Each entity will need to scale

the frameworks based upon

business models, risk appetite,

and resources. So regardless of

the size of your organization,

ERM is for you. What you do

and how you make it successful

is in your hands.

aDDITIoNal REaDINgon ERM and the frameworks referenced in this article can be found online and in print.

Casualty Actuarial Society Enterprise Risk Management Committee. Overview of Enterprise Risk Management. Arlington, VA: Casualty Actuarial Society, May 2003. Online. Available: http://www.casact.org/area/erm/overview.pdf.

Rittenberg, Larry and Frank Martens. Enterprise Risk Management: Understanding and Communicating Risk Appetite. Durham, NC: Committee of Sponsoring Organizations of the Treadway Commission, January 2012. Online. Available: http://www.coso.org/documents/ERM-Understanding%20%20Communicating%20Risk%20Appetite-WEB_FINAL_r9.pdf.

A structured approach to Enterprise Risk Management (ERM) and the requirements of ISO 31000. London, England: The Association of Insurance and Risk Managers, The Public Risk Management Association and The Institute of Risk Management, 2010. Online. Available: http://theirm.org/ISO31000guide.htm.


Conrad Levesque is a senior IT auditor and Kia Bickel, CPA is a senior associate at Johnson Lambert LLP. Levesque and Bickel can be reached for further information or comment via email at [email protected] or [email protected] respectively.

Conrad Levesque Kia Bickel


P erhaps it’s the nature of

the beast for insurers

to face an uphill battle

when it comes to creating a

loyal customer base. In the

current model, for many current

and potential policyholders,

insurance is a necessary evil, an

intangible must-have in order to

drive a car, or own a home.

The fact that the bulk of

personal lines insurance products

are considered a commodity

– with products and services

offered that represent little to no

differentiation – means insurers

find themselves competing

largely on price. And, they are

competing for a consumer that

truly understands the power of

comparison shopping, using

online aggregators to find the

best possible deal.

Additionally, with limited

opportunity for interaction

with the customer (typically at

the point of sale or for a claim),

insurers don’t have many chances

to build enduring relationships.

The same is true whether an

insurer is a direct writer or relies

on captives or independent

agents. As a result, time and

resources are often devoted to

making sure all stakeholders

within the enterprise, as well as

the across the entire distribution

network, completely understand

the insurer’s culture, business

objectives, and customer service

expectations.

For a customer-centric

insurance organization, that’s

just the beginning. Customer

centricity, which often includes

customer-focused operating

and maturity models and data

analytics to drive insights or

predict customer behaviors

and requirements, is sometimes

criticized as “the next big thing.”

In reality, it IS a big thing, and

successful, forward-thinking

insurers are adopting customer

centricity as an inherent part of

their culture, an entire enterprise

that revolves around the

customer.

In our commoditized

insurance market, a customer-

centric operating model may

include competitive pricing, but

the overall focus is much greater.

Once an insurer embraces an

organization-wide approach to

customer engagement, the trick

is to determine where to focus

resources for the greatest return.

Peter Fader, Wharton

marketing professor and

co-director of The Wharton

Customer Analytics Initiative,

argues that companies that have

mastered customer centricity

do so by determining and

targeting those customers who

provide the most value. In a risk

management industry such as

insurance, we can all agree that

not all customers fit that bill.

In personal lines auto, for

example, many insurers would

like to consider rating a science,

going after the best possible

drivers with the lowest possible

risk. While accurate rating and

disciplined underwriting are

keys to an insurer’s profitability

in this area, the introduction

of telematics and usage-based

insurance (UBI) is creating a

competitive environment that

targets high-value customers…

one in which customer centricity,

not pricing alone, is at the center.

In other words, improved

rating and underwriting may

reflect a solid business model for

organic growth, and enhanced

risk segmentation will most

likely improve rating and

pricing accuracy, but discounts

alone may not sustain customer

retention among these lower-risk

drivers.

In a research report recently

released by Aite Group that

targeted 18 global insurers

actively involved in UBI

programming, a clear majority

(85 percent) from Europe

said they tied UBI programs

to promotion of value-added

services, while 50 percent and

25 percent from North America

and South Africa respectively

reported doing so.

While it’s true that UBI is,

to date, still nascent in North

America, (those carriers that

have established programs rely

primarily on using UBI to track

miles driven (pay as you drive,

vs. pay how you drive), forward-

thinking insurers are pitching

customer-centric services such

as targeted location-based

marketing, tailored marketing

messages, mobile apps that

provide driver feedback, links to

embedded social media sites, and

enhanced navigation capabilities.

In fact, insurers from all

three regions reviewed for the

report said they were actively

conducting market tests using

SMS (text messages) and cellular

connections, satellite navigation,

notification triggers, driver

feedback mechanisms, and more,

and will continue to do so as they

structure and develop their UBI

programs.

Imagine the opportunities

for these insurers to broaden

their reach across market

segments and connect with their

customers in new ways, such

as providing an easy means for

customers to obtain information,

to report claims, and obtain

driver safety “scores” via the

same smartphone that measures,

via analytics, their behind-the-

wheel behavior.

By using analytics to

predict customer behaviors and

requirements, these insurers

are combining additional opt-

in, value-added services, such

as roadside assistance, geo-

location, geo-fencing, or vehicle

diagnostics with UBI policies.

Beyond the existing value-added

services under consideration,

insurers with a customer-centric

culture are evaluating other

propositions, such as targeted

location-based marketing,

tailored marketing messages,

links to embedded social media

sites, and enhanced navigation

capabilities.

In other words, while

continuing to target these high-

value customers with discounts,

these insurers are also executing

on a strategy that enables them

to put the needs of existing and

potential customers at the center,

forging a path to long-term

customer retention.

Insurers in the Driver’s Seat by PAT SPEER

Pat Speer is an analyst focusing on the property and casualty insurance segment for Aite Group. She can be reached for further comment or information via email at [email protected].

aNalYST INSIgHTS

Find out more about IASA’s Executive Education Program events and opportunities inside this special section, or visit IASA online at www.iasa.org.

The ExecutiveEducation

Roundtable SeriesLEARN | FOCUS | Lead

Presents

Around the industry, the country and your own backyard,IASA is empowering insurance executives through education.

Special RepoRt


IASA EEP: Serving the Distinct Education Needs of Insurance Executivesby JENNIFER OVERHULSE

D uring 2004,

IASA President

Mark Robison

of Brotherhood Mutual

Insurance Company and other

members of IASA’s Board and

Management Team identified

a need for specific industry

education that they believed

IASA was uniquely qualified

to provide. Personally and

professionally, Robison in

particular was already sold on

the benefits of participating in

a volunteer organization that

promotes networking with

peers, problem-solving through

collaboration and progress

through sharing knowledge. For

years, Robison had taken part

in educational sessions at the

IASA Annual Conference, and

the association had noted steady

growth in attendance by C-level

insurance executives.

From there, it wasn’t much

of a leap to believe that IASA

was the right organization in

the right position to provide

targeted educational events and

opportunities for insurance

executives separate from those

more general educational

sessions offered at the IASA

Annual Conference. To make

a long story short, this was the

genesis of the IASA Executive

Education Program, which

through a lot of hard work

was launched formally in June

of 2005 with an extremely

successful inaugural roundtable

for Chief Financial Officers.

In 2006, IASA launched

the Chief Information Officer

Roundtable to complement the

existing event for CFOs. These

two events speak directly to the

two main constituencies within

IASA, accounting financial

professionals, and systems/

technology professionals. Today,

IASA produces individual

roundtable events for Chief

Financial Officers, Chief

Information/Technology Officers,

Chief Investment Officers, and

Chief Operating Officers.

Over the years, IASA’s

Executive Roundtables have

covered topics both timely and

even controversial at times.

From first-person accounts of

how a CFO from an insurance

company in New Orleans

handled the crisis of Hurricane

Katrina and economic updates

to discussions of executive

level action points that can

help avoid IT project failure

and thought leaders discussing

leading in times of change,

IASA’s Executive Roundtables

are a forum where insurance

executives can share problems,

ideas and solutions.

In 2008, the association

launched another part to its

popular Executive Education

Program by producing the IASA

Executive EDGE Conference,

which brings the individual

executive disciplines and areas

of responsibility together for

a collaborative conversation

instead of segregated topical

presentations. Growing, in

spite of competition from

other executive conferences

throughout the industry,

the IASA Executive EDGE

Conference this year included a

Q&A/interviewstylekeynote

by Travelers’ Jay Fishman, and

presentations on the state of the

insurance industry, World Café

interactive discussions, an ERM

discussion, a forward-looking

session about the future of

insurance.

As you can see, “Progress

Through Sharing Knowledge,”

the association’s motto and

adopted mission statement, is

something IASA takes very

literally. The IASA Executive

Education Program continues

to evolve to serve the changing

educational needs of insurance

executives across the country

and across the industry.

Included in this special section

of the Interpreter is extended

coverage of recent Executive

Education Program events, and

details about what you can

expect in the future.

Jennifer Overhulse is the principal owner of St. Nick

Media Services and the editor of IASA’s Interpreter.

She can be reached for further comment via email at

[email protected].

…IASA’s Executive Roundtables are a forum where insurance

executives can share problems, ideas and solutions.

‘‘’’

Insurance executives have educational needs that differ significantly from those of lower level team members.

Networking, group ideation and problem-solving are important parts of any executive education program.


Executive EDGE Conference Recap: Focus on the Futureby JENNIFER OVERHULSE

T he 2013 edition of the IASA Executive EDGE Conference, held recently

in Hartford, Connecticut, contained more insurance-specific content tailored for executives than ever before. Launched by an Industry Pulse Check session that focused on “Insurance 2013 and Beyond,” and followed closely by presentations by finalists for the IASA Technology InnovationAwardandaQ&A/interview style keynote featuring Travelers’ CEO Jay Fishman, this year’s EDGE Conference was a dynamic event.

“Industry Pulse Check: Insurance 2013 and Beyond” was set up as a panel discussion moderated by IASA Executive Director Joe Pomilia, and featuring Thomas Leonardi, Connecticut Insurance Commissioner; Greg Barats, president and CEO of The Hartford Steam Boiler Inspection and Insurance Company; Stephanie Bush, SVP and chief product and underwriting officer for The Hartford; and Jeff Rieder, CPA, CPCU and partner for Cincinnati-based Ward Group. Discussion among panel members, directed by Pomilia, started out with a focus on improving the relationship that exists today between regulators and insurers by increasing opportunities for open communication. This was viewed as especially important by the panelists due to increasing complexity in the industry.

Moving on, questions from the audience compelled the panelists to consider what can be done, and what technology might be most helpful, in mitigating cyber risk.

“Insurers need to recognize it’s going to happen,” said Barats.

“It’s critical to get together a

cross-functional team and start planning. It’s about more today than just password protection, encryption and anti-virus software.”

There was general agreement among the panel members that as leaders in the industry, executives from all disciplines need to become more IT literate. Discussion topics that followed during this session flowed quickly from the merits of extending the Terrorism Risk Insurance Act (TRIA) to left-field ideas about eliminating claims people.

The panel finally landed on a discussion about talent recruitment and management. Everyone has heard the argument that this is difficult because insurance “isn’t sexy,” right? Well, while panelists were not asked to agree or disagree with this statement, they were offered the opportunity to relate opinions about engaging Millenials, adapting insurance workflows and processes to the way a new generation works, and overcoming the industry’s ongoing perception problem.

Bush referenced Millenials’ “time slicing,” which typically entails flexible work hours, as a challenge facing all insurance executives. Individuals entering the workforce today want jobs that offer the freedom to go to the gym during the day and answer email at 9 PM if necessary. It’s an issue she and the other panelists felt would require hard work on the part of insurers to incorporate into the way everyday business is done in this industry.

Following the “Industry Pulse Check,” Celeska Fredianelli, vicepresidentforQBEandIASA’s chief financial officer, led the audience through presentations by the three

finalists in contention for the 2013 Technology Innovation Award, which is jointly sponsored by IASA and Ward Group. The three finalists included CNA, Accident Fund and Scottsdale Insurance. Each finalist company was given ten to 15 minutes to present pertinent and outstanding details of a recent technology implementation that had transformative results.

Dan Cox of CNA presented first and discussed details of the company’s recent agency bill pay initiative which enables agents to bill and collect directly from insureds, and for CNA to then collect from the agent. This process has greatly streamlined the account settlement process, and increased customer satisfaction with the payment process as well.

Jeff White of Accident Fund then took the stage to discuss a project the company undertook in their claims department which focused specifically on decreasing the prescription and use of opiods among insureds submitting workers’ compensation claims. The project clearly exposed to Accident Fund that as opiod usage increases, the length or duration of the claim skyrockets. This project developed software that today identifies such unwanted patterns and helps Accident Fund better control outcomes.

Finally, Kathy O’Malley of Scottsdale Insurance presented details of her company’s development of a casualty indication tool on behalf of her team. O’Malley discussed the dramatic decrease her company has seen in the policy issuance timeline since they implemented this innovative take on policy processing.

During a networking luncheon, votes by EDGE attendees for each finalist company were tallied with those of an expert judging panel, and a winner was determined and awarded. Jeff Rieder, CPA, CPCU, partner for Ward Group, and IASA’s Fredianelli, called Jeff White of Accident Fund to the podium to accept the award. He was joined by Craig Bilinski and James Rademacher, both of Accident Fund, for the award acceptance.

Additional sessions during the day included World Café interactive discussions centering around industry hot topics and lingering questions, a presentation on ERM specific to insurance, and a forward-looking presentation by Dr. John Sviolka and Jamie Yoder, both of PwC. The day, which was preceded by a sponsored golf outing, concluded with a networking reception.

This year’s event was made possible not only by the hard work of IASA management team, board, volunteers and industry partners, but also by many sponsors. The sponsors of the 2013 IASA Executive EDGE Conference included BDO, Clearwater Analytics, ConVista Consulting, DST Output, GhostDraft, Inpoint, INSTEC, Insurity, ISCS, KeyMark, MajescoMastek, NetRate Systems, Nolan Company, Northern Trust, Prime Advisors, Princeton Financial Systems, PwC, Salient Commercial Solutions, SS&C, Vertafore and Ward Group.

Jennifer Overhulse is the principal owner of St. Nick Media Services and the editor of IASA’s Interpreter. She can be reached for further comment or information via email at [email protected].


Travelers’ Fishman Sits Down for One-on-One Interview at Executive EDGE Conferenceby JENNIFER OVERHULSE

I n 2013, IASA moved away from media moguls, entertainment

icons and sports figures who speak motivationally and inspirationally about life and business challenges they have faced in general, and toward an insurance-specific figure who has dramatically impacted the industry through his longevity and leadership. On Monday, September 30, Travelers’ Chairman and CEO Jay Fishman sat down with IASA President Beth Mercier, also vice president personal lines portfolio management for Travelers, for an exclusive one-on-one conversation about the company he leads, his philosophy on leadership, challenges he has personally experienced and how others in

the industry can persevere in the face of similar issues.

DuringtheQ&A-stylediscussion, it was obvious Fishman values hard work and professionalism, referencing his emphatic desire to reward loyalty and a “job well done” personally as often as he can. Fishman indicated he feels it is important for the CEO to personally take the two minutes necessary to personally engage and not just communicate through corporate communications and impersonal memos.

On growing Traveler’s business in the future, Fishman was pragmatic, indicating that

“size doesn’t matter.” Fishman prefers to concentrate on quality and ability to serve as opposed to size, and believes “it’s not worth

taking a tremendous amount of risk in order to become bigger.” Focusing on delivering shareholder value is not something Fishman believes will or should make him an industry leader, but that certainly qualifies him to lead Travelers.

The interview also exposed Fishman’s deep concern about “where we are headed” in terms of the country. He does not believe the country’s financial position and trends are sustainable going forward, but is optimistic the proverbial ship can still be righted.

Fishman went on to talk about the advances in comparative rating technology, indicating that “you don’t particularly need an outside sales force anymore in personal lines.” He went on to discuss

how “being a low cost producer” is becoming “increasingly important to success,” and that he believes “price matters more than it ever did.”

Finally, Fishman stressed the importance of analytics to insurers.

“It is not possible to still make decisions on anecdotal or instinctive evidence,” said Fishman.

The session concluded as Fishman took a couple of questions from the audience before the group broke for lunch. His presentation was both timely and thought-provoking, and gave other insurance executives in the room some interesting action items to take home.

CI-TO Roundtable Recap: Evolution an Everyday Part of CIO Jobby JENNIFER OVERHULSE

on Tuesday, June 4,

the 2013 IASA

Chief Information-

Technology Officer Roundtable

was presented in Washington

D.C. as part of the association’s

Executive Roundtable Series.

The event drew nearly 100

insurance company CIOs for

sessions on how technology

and the CIO can affect the role

consultants play in technology

projects and implementations,

closing the generation gap in

insurance, the evolution of

distribution channels, and

moving from maintenance

to strategic enabler within an

insurance organization.

The first session, presented

by Ann Rhoades of JetBlue, was

highly-engaging. Rhoades is

well-known for her proliferation

of people-centric values

at JetBlue, and for her goal

of “bringing humanity and

enjoyment back to air travel.”

Her comments inspired many

of the insurance company CIOs

in the room to think about how

technology can make their own

companies more customer or

people-centric and what role the

CIO can play in that process.

The other sessions,

presented as panel discussions,

incorporated viewpoints from

insurance companies, solution

or service providers and

industry consultants as well.

One of the day’s most lively

discussions centered around

the evergreen topic of the

changing role of the CIO within

an organization. With much of

today’s IT budgets concentrated

on maintenance of existing

systems, it is extraordinarily

difficult for CIOs to move into

a more strategic role. What the

discussion highlighted most

is the differences between

insurance organizations and

IT organizations within those

insurance organizations. The

move from maintainer to

strategic enabler is different for

each CIO, and for some, it never

happens at all.

Sponsors for the 2013 event

included Agile Technologies,

CSC, ISCS and Vertafore, with

special support from IBM in the

form of a luncheon presentation

around business analytics.

Plans are already underway for

the 2014 CI-TO Roundtable

Program. If you have ideas

or suggestions to contribute,

please contact Mary Ellen

Freyermuth at mfreyermuth@

catholicmutual.org.


CFO Roundtable Recap: Knowledge Enables Informed Action By CFOsby FORREST MILLS

I n uncertain times, the

current economy is

challenging chief financial

officers more than the rest of

the positions at any company’s

executive level. After all, it’s hard

to manage money you don’t

have, or balance budgets that

reflect significantly less income

and growth than last year, right?

Perhaps this explains the

overwhelming attendance IASA

saw at this year’s Chief Financial

Officer Roundtable. More

than 150 financial executives

came together this past June

at the Gaylord National in

Washington D.C. to network

with peers, learn new methods,

get information updates on

important regulations and

legislation, and perhaps just

to commiserate. Whatever the

reason, CFOs were treated to a

fantastic agenda that was packed

with non-stop action.

The morning kicked off

with an economic outlook

presentation by James Glassman,

managing director at JPMorgan

Chase. It could be argued

that knowledge of the current

financial environment more

so than other factors, enables

CFOs to play an active role in

advising critical departments

and determining the correct

strategic direction of the

company during both good

and bad times. To that end,

Glassman shared his view of

where the U.S. economy stood

through the first half of the year,

and where it might be heading

based on various data.

Glassman’s opinion was

that “the tide is coming in” as

corporate earnings have been

ahead of the market. The U.S.

has seen about two-thirds

of our jobs recovered but, in

reality, we are only one-third

back as it relates to growth.

He pointed out the Fed is

distorting interest rates to be

sure, but not earnings. The

trends show that all states

have seen improvement, with

jobless claims being reduced

in most. And, housing is even

starting to see an improvement.

Apparently, there is “pent up”

demand to own! Builders

have finally cleared the glut

of available inventory, and,

housing prices are getting back

to normal. Even manufacturing

jobs are coming back to the

U.S. But, the challenge will be

to train enough workers for the

demand being created.

CFO Roundtable attendees

came into the room looking for

insight into what is coming next,

and we certainly got it from

Glassman’s presentation. For the

most part, participants were left

with a feeling that the worst is

behind us and positive (albeit

perhaps slow) growth is in the

near future.

Following the economic

update, the group heard from

an expert panel addressing

“The Art of Reserve Risk

Management.” Recognizing

that it can be difficult to make

any decision in a vacuum,

this session was intended to

provide CFOs insight into how

other insurance companies are

managing their reserve risk.

This knowledge enables better

planning and makes returning a

profit more than a “hit or miss”

exercise. To kick off the session,

the patterns and cycles were

laid out by representatives with

Guy Carpenter and a debate

of whether this process is art

or science was facilitated by

The Nolan Company. Harold

Meloche, treasurer for Conifer

Holdings, Inc., presented the

CFO view of reserve risk, and

SunGard wrapped up the

reporting process before the

panel engaged in a question and

answer session.

Leaving no opportunity

for networking untapped,

IASA brought chief financial

officer and chief information-

technology officers attending

the day’s roundtables together

for a combined luncheon

event. During lunch, which was

sponsored by IBM, attendees

got some thought-provoking

ideas from a presentation on

analytics, a very hot topic in the

insurance industry, called “The

Analytics Journey – Notes Along

the Way,” which was delivered

by Craig Bedell of IBM. This

presentation reinforced for the

CFO group at least a theme that

seemed to be recurring, “you

can’t manage what you can’t

see.” Knowledge and insight into

what is coming can help every

individual do a better job going

forward.

The afternoon sessions got

started with a deep dive into the

“Current State of the Regulatory

Environment,” moderated by

Johnson Lambert. Insurance

commissioners from Nevada

and Washington D.C. joined

the CEO from the National

Association of Insurance

Commissioners (NAIC) and

John Svoboda, chief regulatory

officerwithQBENorthAmerica,

to discuss the hot regulatory

topics on everyone’s mind.

The day finished with an

informative look at “The Patient

Protection and Affordable

Care Act.” An esteemed group,

moderated by David Atkinson,

executive vice president for

RGA Reinsurance Company,

discussed the highlights and

potential impacts to companies

from the implementation of

the Act. The Act is intended

to extend health insurance

coverage to 90 percent of the

current population and 27

million currently insured by

2017.

The 2013 CFO Roundtable

concluded in the evening

with a private networking

reception sponsored by Centric

Consulting during which

attendees had a chance to wind

down and discuss the day’s

activities and hot topics.

Forrest Mills is the CFO for Guaranty Income Life Insurance Company and president-elect for IASA. He can be reached for further comment or information via email at [email protected].

CFO Roundtable presentations focused on an economic outlook, the impact of the Affordable Care Act, reserve risk management, the regulatory environment, and business analytics.


Chief Investment Officer Roundtable Recap: Roll with the Punchesby KEN ZIEDEN-WEBER

I n a tough-to-predict

market, one would hope

chief investment officers

are prepared to “roll” with

the proverbial punches, so to

speak at least. During the 2013

installment of IASA’s Chief

Investment Officer Roundtable,

held in Washington D.C. this

past June during the IASA

Annual Educational Conference

& Business Show, this ability

was certainly put to the test.

Weather related travel

delays started the day’s

events with a bang, making it

impossible for the economist

who was to present during the

opening session to attend. The

presentation was expected to

cover the economic outlook

for the insurance industry, and

while the viewpoints of an

economist were certainly missed,

the attendees and the schedule

adapted. The forward-looking

and current market content

of the subsequent roundtable

discussions were expanded, and

did not fail to deliver a great

perspective of the market, as

well as regulatory and business

factors at work in today’s

investment environment.

The prevailing theme of

the day’s sessions was how

chief investment officers are

responding to the prolonged

low interest rate environment’s

impact on the fixed income/

debt securities market.

Throughout the event, panelists

provided insight into the

trials facing investors, while

projecting the expected changes

in the bond market landscape

following 30 years of “tailwind”

due declining interest rates.

Projections from 2010 all

pointed to increasing interest

rates, but unforeseen worldwide

events including the Japanese

tsunami, the Euro regional

sovereign debt crisis, U.S. fiscal

policy and Federal Reserve bond

buying, have all played a role in

keeping interest rates at record

low levels, and resulting in the

industry’s “hunt for yield.” One

panelist in particular noted

there is “not a lot of juice left in

the fixed-income market” due

to increased demand for bond

investment return that has

left investment opportunities

appearing pretty well “picked

over.” However, differing views

of investment opportunities

were voiced, and the consensus

was that most companies are

not extending the duration

of their portfolios due to

expectations that interest rates

will rise in the future.

This all leaves chief

investment officers with

the challenge of deciding

which risks to assume into

the portfolio in the hunt to

maintain yields as higher rate

investment holdings mature

and run off. Additional sessions

provided attendees with

viewpoints regarding how to

set a “risk budget” for liquidity,

credit and duration risks while

considering other classes of

investments not traditionally

held by most companies.

Chief investment officer and

chief financial officer (CFO)

attendees also heard from

panelists regarding the changes

in regulations or accounting

rules and the related impact on

investment decisions. Insurance

companies today are faced with

balancing the regulatory impact

to risk-based-capital (RBC)

and the increased compliance

requirements for data

submissions, while monitoring

the changing landscape of

international, domestic and

statutory accounting rules.

Views were shared by investment

service providers providing

professional investment advice

and system solutions and from

fellow insurance company

representatives regarding invest-

ment and risk governance policies.

Without a doubt, the

technical presentations and

group discussions, which

included real-time audience

polling results, delivered a

strong message for the need

for innovative actions for

insurance companies to take

to balance the challenging

investment landscape

and the risk management

within their organizations.

Insurance companies cannot

afford to bury their heads

in the sand and wait for the

return of historical market

conditions. Through the

networking and thought

leadership provided by the

IASA Chief Investment Officer

Roundtable, chief investment

and financial officers left the

meetings empowered to find

opportunities and manage their

company’s risk profiles.

Kenneth Zieden-Weber is the senior vice president and COO/CFO at Xchange Benefits, LLC. He is also the chair of IASA’s eIntrepreter/Interpreter Committee and a member of the association’s Seminars Committee. He can be reached via email at [email protected].

Event chair Nathan Felix introduces a session at this year’s Chief Investment Officer Roundtable.


COO Roundtable Recap: Interactive Challenge Highlights 2013 Program by KEN ZIEDEN-WEBER

T here are many reasons it’s a good idea to get together with your peers. Relate

common problems. Find better solutions. Commiserate over latent challenges inherent to position or industry. Build relationships. Unplug. Recharge. Reboot.

The 2013 Chief Operating Officer (COO) Roundtable held during the IASA Annual Educational Conference & Business Show this past June in Washington, D.C. drew together nearly 75 COOs. Outgoing IASA President Louise Ziemann opened the day’s sessions by telling the group a bit about the history of the COO Roundtable and the success IASA has had attracting C-level executives to the IASA Annual Conference, as well as the IASA Executive EDGE Conference typically held in the Fall.

Ziemann was followed by IASA’s Vice President of Seminars, Mary Ellen Freyermuth, who discussed the session format and the links between this program and IASA’s other executive sessions. Freyermuth then introduced COO Roundtable Chairman Rod Travers from The Nolan Company. Travers laid the groundwork for the day’s sessions and introduced the three sections of the program.

Section 1: The first session, Operations Imperatives: Finding Common Ground – External Negotiations, was moderated and presented by John Nichols of JL Nichols Training and Consulting. Nichols’ discussion was fascinating as it focused on determining and measuring value; characteristics of a good negotiator; prepping for

a negotiation; who are you negotiating with; negotiating tactics; timing of the negotiation; and lastly, concessions. Some of the key points made were about knowing the value of what you are negotiating (not just focusing on price, but quality and service as well), and about the importance of listening in the negotiation process. Nichols was clear that being honest in a negotiation process means you don’t ever have to back pedal, and it gains the respect of the other party. Also important is to go into the process with an agenda and stick to it, to know your goal, and to make certain you are negotiating with the decision maker. By establishing absolute boundaries up front, everyone wins. So, be patient and in the end hopefully no one winds up splitting the difference.

Section 2: Next, was a session moderated by Kenneth Zieden-Weber, senior vice president and COO/CFO for Xchange Benefits, LLC. Issues and Answers: COOs Share Insights was presented as a panel discussion which included Leroy McCarty, COO of Fidelity Security Life Insurance Company, Scott Eisdorfer, senior vice president and CAO of the Navigators Group Inc., and Steve Discher, executive vice president of The Nolan Company. Sharing insights and challenges during this session led to some very lively discussions on topics such as the real role of the COO, external impact on operations (including constraints on investments in people, processes and systems); priorities (where is the COO most engaged and where should he/she be

most engaged); operating model (how is your business going to change in the future) and measuring/ensuring success (how is success measured for the COO and the organization). The panel interacted quite well, McCarty, Eisdorfer and Zieden-Weber related their company experience while Discher adopted the perspective of a service provider to discuss client reactions.

Section 3: Finally, attendees were faced with The COO Solutions Challenge, an interactive session new to the COO Roundtable this year. The attendees were separated into three groups or teams mapping to the 2013 event sponsors, Innovation Group, Majesco Mastek and INSTEC, for the problem-solving challenge. Team Innovation was led by Phil Auger, COO of Arch RE Facultative. Team Majesco was led by Steve Boyd, president, commercial lines, for Arrowhead Insurance Group, and Team INSTEC was led by Jacqueline Morales, senior vice president, retirement solutions, for AXA Equitable Life. Each team was provided with a specific operational problem to solve and all teams have the same prescribed time

and resources with which to complete the challenge. The teams’ solutions were judged by an industry panel that included Don West from State National, Kathy Burger from Insurance & Technology, and Rod Travers from The Nolan Company. The solutions were judged on potential effectiveness in the areas of market, brand, financial, and customer impact, as well as the degree of innovation presented. The winners, members of Team Majesco, were tasked with bringing a new product to market utilizing both new and existing distribution channels, as well as new and existing geographic regions. All of this had to be accomplished minimizing cost and maximizing existing infrastructure.

This year’s COO Roundtable was certainly the most successful and interactive that IASA has presented to date, and many of the attendees left re-energized about the challenges ahead and the potential solutions as well.

The COO Solution Challenge was one of the most popular parts of the 2013 program.

Kenneth Zieden-Weber is the senior vice president and COO/CFO at Xchange Benefits, LLC. He is also the chair of IASA’s eIntrepreter/Interpreter Committee and a member of the association’s Seminars Committee. He can be reached via email at [email protected].


The IASA Insurance Game®

Wednesday, November 20, 2013IASA International Offi ce – Durham, NC

The IASA Insurance Game gives solution providers and those new to the insurance industry quick hit, hands-on knowledge of “profi t and cash” scenarios, industry terminology, products and critical insurance company processes. Designed to connect game plays to real-world insurance situations, this one-day course combines an interactive insurance company simulation with training that clearly illustrates how business and technology decisions impact overall company performance.

Plan now to play (and learn) along!

For more information about registering, or if your company

would like to send multiple individuals, please contact the IASA

International Offi ce at 919-489-0991, or Mark Roth at 603-898-6340.

Who Should Attend?

• Insurance industry suppliers.

• Insurance company professionals new to the industry.

Why Should I Attend?

• Recognize how insurance companies function, make money and what role solution providers can play.

• Understand how individual decisions impact other company functions, as well as the company’s bottom line.

How Do I Register?

• Go to www.iasa.org/profi tcash

• Pay $395 per person.

Learn Insurance

and Like It!Future IASA executIve educAtIon ProgrAm eventS

IASA is constantly planning for the future and looking for new ways to deliver quality education to members throughout the insurance industry.

Planning and preparation for 2014 IASA Executive Education Program events is underway.

EXECUTIVE ROUNDTABLESIASA welcomes ideas for topics, presentations and educational delivery methods. If you would like to be more involved in one of these upcoming events, please contact Tim Morgan, IASA’s VP of Seminars ([email protected]), Brent Jones, IASA’s Director of Executive Education ([email protected]), or the individual event chairs listed below directly for more information.

Monday, June 9, 2014COO Roundtable: Rod Travers, Robert E. Nolan Company ([email protected])

CInvO Roundtable:Nathan Felix, Great West Insurance Company ([email protected])

Tuesday, June 10, 2014CFO Roundtable:Celeska Fredianelli, QBE North America ([email protected])

CIO Roundtable:Mary Ellen Freyermuth, Catholic Mutual Insurance Company ([email protected])

EXECUTIVE EDGE CONFERENCEHaving just concluded a successful event headlined by Jay Fishman of Travelers in Hartford, Connecticut in October of this year, the steering committee for the IASA Executive EDGE Conference, working in conjunction with Morgan, Jones and the IASA staff, is busy confirming a site and date for the 2014 IASA Executive EDGE Conference. Stay tuned to the EDGE page on the IASA website at www.iasa.org/EDGE for more information as it becomes available.

SPONSORSHIPSSponsorships for these events are available. If you are interested in potentially getting involved via a sponsorship, please contact Mark Roth, IASA VP of Business Development, 603-401-1460 or [email protected].

The IASA Insurance Game®

Wednesday, November 20, 2013IASA International Offi ce – Durham, NC

The IASA Insurance Game gives solution providers and those new to the insurance industry quick hit, hands-on knowledge of “profi t and cash” scenarios, industry terminology, products and critical insurance company processes. Designed to connect game plays to real-world insurance situations, this one-day course combines an interactive insurance company simulation with training that clearly illustrates how business and technology decisions impact overall company performance.

Plan now to play (and learn) along!

For more information about registering, or if your company

would like to send multiple individuals, please contact the IASA

International Offi ce at 919-489-0991, or Mark Roth at 603-898-6340.

Who Should Attend?

• Insurance industry suppliers.

• Insurance company professionals new to the industry.

Why Should I Attend?

• Recognize how insurance companies function, make money and what role solution providers can play.

• Understand how individual decisions impact other company functions, as well as the company’s bottom line.

How Do I Register?

• Go to www.iasa.org/profi tcash

• Pay $395 per person.

Learn Insurance

and Like It!


H earing that your

company is about to be

acquired rarely inspires

positive thoughts. Who is this

new company? What are they

about? What will happen to my

team? What will happen to me?

Believe me, I understand.

I’ve worked with the same

group for almost 15 years, and

during that time we’ve had

no less than six names. In a

nutshell, my story goes like

this: We started out as a small

boutique consulting firm

that was purchased by a large

national consulting company.

We went independent through

an employee led buy-out just in

time for the economy to crash.

We were purchased soon after by

the commercial subsidiary of a

large, closely-held government

contractor. The commercial

entity was merged into the

parent company right before

an extremely painful IPO. And

finally, the entire company was

sold to another large, privately-

held government contractor

where we have now split off into

a commercial subsidiary.

Each of these transitions was

different. Some were smooth,

and some were really rough. In

some cases, I ended up in a better

position, and in some I did not.

But, because I felt extremely loyal

to my team and to my clients, I

was determined to ride it out.

Through it all, I learned a lot

about working through difficult

situations, about my team, and

about myself. So, I’d like to share

some of the most important

things I learned in the hopes

that it will help others who

might be facing an acquisition

of their own.

First and foremost – do

your job. There is no quicker

way to put yourself in jeopardy

than becoming so distracted

by the acquisition drama that

your performance suffers. First

impressions matter, so make sure

the new company sees that you

are an important, productive

part of the team.

To figure out what you’re

getting into – look at the top.

One of the best indications of the

culture and dynamics of the new

company is its leadership. Listen

to what they have to say. Watch

what they do. Do they seem to

be someone you can trust? Do

you understand their values and

vision, and more importantly,

are those values and vision

something you can embrace?

Change is painful for

everyone. Remember that while

you may have to conform to

new processes and rules, you are

also introducing change into the

other company. Integrating two

families is difficult. It takes some

time to pull the best from both

organizations and make it work

together as a whole.

Pick your battles. There may

be things you don’t like about

the new organization’s processes

and rules. However, you can’t

go around constantly tilting

at windmills. Be cooperative.

Deal with the things that are

minor inconveniences without

complaint. That way when

something comes up that is really

important, you are more likely to

be heard.

Remember that it’s not

personal – even when it feels

personal. It felt personal to

me when I went from being a

partner to a director. I logically

understood that going from a

small firm to large company

meant that I was no longer a

big fish in a small pond, but

it still didn’t feel good. It felt

like a demotion. So, what did

I do? I got over it. I know that

is hard to do when we invest

so much of ourselves into our

jobs. But, business is business,

and sometimes we have to put

aside personal feelings to look

at the big picture. For me, that

was realizing that now I had the

opportunity to become a big fish

in a big pond.

Build relationships. The

longer you view the situation

as “us” and “them,” the more

painful it will be. “They” are

not the enemy. “They” are now

your peers. Get to know them

and let them get to know you.

The sooner you can build some

rapport, the sooner you can

work together efficiently and

effectively.

At some point, you have to

drink the Kool-aid. Sooner or

later, you have to decide whether

or not you want to stay with the

new company. If you do, then

you need to get fully onboard.

Continuing resistance will only

make you, and probably those

around you, miserable. Support

your company, support your

team and move forward.

The road will likely be bumpy,

but it is possible to successfully

navigate an acquisition, or in my

case, many acquisitions. So, how

does my story end? Incredibly

well. I am now part of a company

whose values and leadership

I believe in. Even better, they

believe in me. It took us a little

while to figure each other out,

but a year later we are working

well together and planning for

a successful future. Will we live

happily ever after? Yes, I believe

we will, at least until the next

acquisition.

aSSoCIaTIoN NEWS

Career Skills Corner: Surviving Acquisitions By JANEEN BLANTON

Janeen Blanton, PMP, CSM, CSPO, AIS, AIT, is vice president, insurance productivity services and Agile Center of Excellence, for Salient Commercial Solutions. She can be reached for further comment or information via email at [email protected].

First impressions matter,so make sure the new company sees that you are an important,

productive part of the team.‘‘

’’ About IASAThe Insurance Accounting & Systems Association, Inc. (IASA) is a qualified 501 c-3 non-profit, education association, and one of the insurance industry’s largest, and most well-represented trade associations. IASA membership includes insurance companies of all types (Property & Casualty, Life, Health, Fraternal, HMO and others) as members, as well as companies serving the insurance industry, regulators and organizations more broadly representative of the financial services industry, including banks and investment brokerage firms.

®

GET INVOLVED AS A MEMBER AND START RECEIVING BENEFITS TODAY! Contact Sheila White-Smith, Manager of Member Services for IASA at 919-489-0991 x 206 or [email protected] for more information! Or, connect with IASA via social media!

EDUCATIONAL EVENTS

ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOWJune 8-11, 2014, Indianapolis, IN

EXECUTIVE EDUCATION PROGRAM EVENTSChief Financial Officer RoundtableChief Information Officer RoundtableChief Investment Officer RoundtableChief Operating Officer RoundtableExecutive EDGE Conference

IASA & RR DONNELLY INSURANCE ACCOUNTING SEMINARSP & C Statutory Accounting Principles

LOCAL IASA CHAPTER EVENTSCheck the IASA web site and 26 local chapters for meetings near you!PRODUCTS & SERVICES

TEXTBOOKSProperty & Casualty Insurance AccountingLife & Accident Insurance AccountingHealth Insurance Accounting

PUBLICATIONSthe Interpreterthe eInterpreter newsletter

FINANCIAL REPORTING PRODUCTSState Filing ExpressState Checklist Manager

DISTANCE LEARNING & ONLINE RESOURCESKnowledge ExchangeTargeted Web SeminarsS.O.S. DatabaseIndustry Pulse

ADDITIONAL BENEFITSCPE CreditsVolunteer ParticipationNetworking Opportunities

For only $565 annually for a company membership, IASA members receive a wide array of educational products, services and events, primarily focused around the core knowledge areas of accounting/finance and systems/technology, free or at greatly-discounted prices.Plus, with over 1,000 member companies and over 12,000 affiliated individuals, IASA offers members more networking opportunities than anywhere else in the insurance industry.

The industry’s most trusted source ofinsurance education for over 80 years…

About IASAThe Insurance Accounting & Systems Association, Inc. (IASA) is a qualified 501 c-3 non-profit, education association, and one of the insurance industry’s largest, and most well-represented trade associations. IASA membership includes insurance companies of all types (Property & Casualty, Life, Health, Fraternal, HMO and others) as members, as well as companies serving the insurance industry, regulators and organizations more broadly representative of the financial services industry, including banks and investment brokerage firms.

®

GET INVOLVED AS A MEMBER AND START RECEIVING BENEFITS TODAY! Contact Sheila White-Smith, Manager of Member Services for IASA at 919-489-0991 x 206 or [email protected] for more information! Or, connect with IASA via social media!

EDUCATIONAL EVENTS

ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOWJune 8-11, 2014, Indianapolis, IN

EXECUTIVE EDUCATION PROGRAM EVENTSChief Financial Officer RoundtableChief Information Officer RoundtableChief Investment Officer RoundtableChief Operating Officer RoundtableExecutive EDGE Conference

IASA & RR DONNELLY INSURANCE ACCOUNTING SEMINARSP & C Statutory Accounting Principles

LOCAL IASA CHAPTER EVENTSCheck the IASA web site and 26 local chapters for meetings near you!PRODUCTS & SERVICES

TEXTBOOKSProperty & Casualty Insurance AccountingLife & Accident Insurance AccountingHealth Insurance Accounting

PUBLICATIONSthe Interpreterthe eInterpreter newsletter

FINANCIAL REPORTING PRODUCTSState Filing ExpressState Checklist Manager

DISTANCE LEARNING & ONLINE RESOURCESKnowledge ExchangeTargeted Web SeminarsS.O.S. DatabaseIndustry Pulse

ADDITIONAL BENEFITSCPE CreditsVolunteer ParticipationNetworking Opportunities

For only $565 annually for a company membership, IASA members receive a wide array of educational products, services and events, primarily focused around the core knowledge areas of accounting/finance and systems/technology, free or at greatly-discounted prices.Plus, with over 1,000 member companies and over 12,000 affiliated individuals, IASA offers members more networking opportunities than anywhere else in the insurance industry.

The industry’s most trusted source ofinsurance education for over 80 years…


Interpreter: How do you typically get your work day off to a good start? augustine: I have a very large, travel mug of strong, black coffee that I drink on my commute. I drive about 30 minutes to the office, and it is gone by the time I get there!

Interpreter: Is there a certain song on your iPod that gets you motivated? augustine: My favorite movie is “Top Gun,” (I just love a man in uniform!), so I am inclined to love “Danger Zone.” It’s all about pushing the limits…

Interpreter: What would you consider to be the biggest benefit your company gets from your volunteer participation in IASA? augustine: The obvious answer is that the company name appears in some of the press coverage of activities I am involved in with IASA. However, and perhaps more importantly, because Aon Benfield is a reinsurance broker, we deal with a lot of insurance companies, so it is very beneficial to meet some of those people and hear their issues, processes, etc. I can take that back to the office and use it to help develop ways to better serve our clients.

Interpreter: Do you have any hobbies that could affect your personal insurance premiums? augustine: My obsession these days is my embroidery machine, so my homeowner’s policy is impacted only by the replacement cost of the machine. The good news is that it falls into the “contents” portion of my

policy, so I don’t have to have a special rider.

Interpreter: What is your favorite way to relax after a particularly stressful day in the world of insurance? augustine: I love playing with my embroidery machine or doing hand needlework like cross stitch and hardanger. What is hardanger you ask? Well…, it is also called Norwegian embroidery (and no, I am not Norwegian!). You start with plain linen fabric, weave thread in a particular design, cut and pull threads of linen out and weave again!

Interpreter: IASA is a great place to experience firsthand the cooperation of business, financial and IT professionals working toward a common goal. Do you struggle with issues relating to business/IT alignment at your company? What is the best way you have found of successfully handling these types of situations? augustine: I am directly involved, from the business side, in the system changes we make every quarter, and because it is a global system, it brings even bigger challenges. I represent the Americas (North and South), so I need to learn their issues and needs. It really seems to help when we have monthly meetings to discuss issues. I can then take them to the IT meetings and prioritize with my counterparts in the Europe and Asia/Pacific regions. IT tends to get to the technical design in all conversations, but we have split our groups to users first, then it goes to IT.

That seems to really work well to separate those discussions.

Interpreter: What do you believe is the biggest challenge currently facing your company? augustine: Aon Benfield is a small part of the Aon Corporation, so our challenges are different that the corporation as a whole. I think our biggest challenge today is finishing our system conversion to global use, while balancing that against keeping current with all our customers’ needs.

Interpreter: How do the educational and networking benefits you get by volunteering for IASA help you do your job better? augustine: I hear what the trends and issues are for insurance companies. As a reinsurance broker, what we do is really all about the money, so whatever information I can gather or methods we can use to get that to our clients faster is always a good thing!

Interpreter: Is your company getting involved in social media? Do you think social media can have benefits for insurance companies, or is it just a trend? augustine: Corporately we are, but it doesn’t apply to Aon Benfield on its own. I think it can have benefits for insurance companies. I just had a conversation the other day about the great commercials that insurance companies seem to have lately. I am pretty sure that some of the commercials we see are passed around on social media, and the name recognition goes right with it. Younger people today are all about social media, so it makes sense to focus advertising that way.

Interpreter: Can you name one thing most people would never guess about you when they first meet you? augustine: I had a dirt bike when I was in high school.

aSSoCIaTIoN NEWS

NATIONAL VOLUNTEER PROFILE

dotti Augustine, ARe, AIAF, Director - Aon Benfield, and Vice President of Membership – IASA

Dotti (in the center) spends her spare time with two men who are a very important part of her life, her two sons, Tyler (in yellow) and Greg (in red).

If you’ve been looking forreliable answers...

Access to practical industry knowledge can provide the competitive edge necessary to succeed in today’s insurance industry.

That is why the Insurance Accounting & Systems Association (IASA) is pleased to announce a new member benefit - the IASA Knowledge Exchange. Knowledge Exchange is available free of charge to all IASA members on the association’s website at www.iasa.org. Knowledge Exchange is powered by Skywire Software’s AnswerSuite product, which allowsmembers to ask questions, get answers and search a comprehensive database of information as needed. This system leverages the most up-to-date technology to handle the question submission process. Submit your questions. Get expert answers. It’s really that simple.

Financial/Accounting Categories include: Statutory Accounting; GAAP, SEC and International Accounting; Taxes and Assessments; Investments and Banking; Budgeting and Cost Accounting; Reinsurance; Internal Controls and SARBOX; and Regulatory Compliance.

Technology Categories include: Disaster Recovery/Business Continuity Planning; Software Development and Acquisition; Project Management; Data Management; Business Development/Data Warehousing; Application Integration; Emerging Technologies; IT Infrastructure; and Internal Controls and SARBOX.

Log on today at www.iasa.org.

We’ve got abettersource.

IMPRE

SS INSPIRE IGNITE

June 8–11, 2014 Indianapolis Convention Center, INEducational Conference & Business Show

2014INDIANAPOLIS

JOIN US JUNE 8-11, 2014 IN INDIANAPOLIS, INDIANA!

The 2014 IASA Annual Educational Conference & Business Show gives you educational, networking and career development opportunities unequaled by other industry events.

● More than 80 educational sessions in the areas of Accounting, Risk and Finance, Technology and Career Skills Development

● 200+ product and service exhibitors

● Networking events for insurance professionals specifi cally focused on accounting, fi nance, investments, operations and technology

● An exclusive Executive Education Program that hosts roundtable events specifi cally for Chief Operating Offi cers, Chief Financial Offi cers, Chief Investment Offi cers and Chief Information/Technology Offi cers

Follow IASA on Twitter @IASAInc Join the IASA Group www.linkedin.com

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GO TO IASA.ORG FOR MORE INFORMATION!

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issue ii focus on executive education...executive corner an interview with usaa’s kevin j. bergner...

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