NEW APPROACHES NEEDED
I recently came upon your very interesting article on paper/document/content management for insurers ("Firing up the Paper Chase," Risk & Insurance®, Sept. 1, 2005, p. 50). In particular, I was intrigued by the following sentence: "On top of that, insurers and reinsurers have thousands of different forms to track, manage and keep updated." Is this still a major issue or has it been solved? I would imagine that forms evolve and version all the time, so keeping up with all the form changes could be a real challenge. Has someone come up with a solution that you like? I am interested in exploring what new approaches might be useful in the insurance space in the area of data capture and mining. If you could point me in some direction, that would be much appreciated.
KEVIN PANG, PH.D., M.B.A.
KYOS SYSTEMS INC.
I read your article in Risk & Insurance®with interest ("More Devastating Than Death," Aug. 2006, p. 41). The phenomenon is present here in Canada, but it also has its own "Canadian twist." As a result of limited funding for medical care throughout the country (if you compare the average Canadian with the average insured American), the type of issue that may keep an employee or executive from productive work includes much more mundane issues that have greater impacts in Canada versus the United States. A survey of treatment and care across the country in 2005 demonstrated that on average, Canadians are treated within a time delay that is twice as long as is clinically reasonable! Your article is fascinating, and I would like to be able to forward it to spark discussion in this area.
VICE PRESIDENT, OPERATIONS
Saint Laurent, Quebec, Canada
RIDDANCE TO THE RUBBISH
What a load of rubbish this article was! ("For Whom the Bell Tolls," Risk & Insurance®, Sept. 1, 2006, p. 22.) For the first time in a long time, insurers are correctly doing their job--underwriting--and spoiled risk managers, no longer finding cheap primary insurance, threaten to leave "forever." Good riddance--be my guest and find alternatives! If I were their insurer, I'd turn them down after their captive blows up from too little capital and too optimistic pricing assumptions (retentions can be underpriced, too, from an internal planning standpoint). Just imagine the uproar a publicly traded company would go through from its own stock analysts for not buying insurance because it "costs too much" and then suffering a big, earning-missing loss. Of course, by that time, capital markets and alternative product prices would have exploded. Don't forget--hedge funds aren't charities, and they aren't that interested in academic discussions of "diversification benefits" that you all seem to think solves the insurance cost problem. They need to make real money for their clients and go where the opportunities lie--and leave when they are gone. Face it--insurance has been way too cheap, and given a string of events starting with the tragedy of Sept. 11, 2001, insurers are currently being the disciplined stewards of capital they ought to be. You want more cover? Pay up. But don't worry--I fear that too many insurers will take your nonsense to heart, and eventually they will underprice again, about the time you start writing your "Market Returns to Sanity" article. You might as well dust off the last one from 1998 to save time.
TODD R. BAULT, FCAS
SENIOR ANALYST, NON-LIFE INSURANCE
SANFORD C. BERNSTEIN LLC
New York, N.Y.
October 1, 2006
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