Citizens Information Systems Advisory Committee Meeting Report: November 30

 

The Citizens Property Insurance Corporation (“Citizens”) Information Systems Advisory Committee (“Committee”) met via teleconference on November 30, 2010 to review progress on the search for a core insurance systems vendor, among other agenda items.  To access the meeting materials, click here.  

The core systems of an insurance company consist of the primary data processing applications that automate its underwriting, policy administration and claims handling functions.   Frequent technological advancements often require the rewriting, upgrade or replacement of these systems to enable interaction with modern infrastructures.

 

Key Projects Update

In relation to selecting a core systems vendor, two scenarios are being examined — one would entail implementing a one-vendor suite of core systems and the other would be a “best component” approach utilizing multiple vendor components consolidated with Citizens’ current policy and billing systems. 

With the core systems competitive solicitation and evaluation phases complete, further assessment of potential vendors will include a cost-benefit analysis, risk assessment and an evaluation of organizational change implications, followed by implementation recommendations. This report is expected to be presented during the first quarter of 2011.

An update on Citizens’ Corporate Data Center Facility Realignment project was then provided by Robert Sellers, Citizens’ Vice President of Information Technology (“IT”) Strategy and Architecture.   This project encompasses moving Citizens’ primary production data facility to a vendor-provided facility.

Mr. Sellers said that, at the beginning of 2010, a competitive solicitation was issued for a vendor to both provide a facility as well as assist with the migration.  After the leading vendor was disqualified and no others deemed suitable, that solicitation process was cancelled and is now being revised to assist in procuring a facility without tying the process of the move into the solicitation.  

A third-quarter 2010 Request For Information regarding co-location services in the Southeastern United States has been completed as a prerequisite to releasing the solicitation, targeted for the first quarter of 2011.   A decision on whether to outsource migration management also will be made. 

Citizens’ Chief Information Officer Curt Overpeck updated the Committee on the technology aspects of Citizens’ ongoing mitigation inspection program. 

In 2010, Citizens initially engaged one vendor to provide property inspection services, but for 2011, the transition will be made to a three-vendor model, with the objective of ensuring that insurance premiums properly represent the risk being mitigated.  Mr. Overpeck reported that, of the approximate $800 million in wind mitigation credits issued by Citizens annually, an estimated $200 million of those credits are based on incorrect information, which ultimately leads to underestimation of expected hurricane losses.   This priority program will encompass several types of personal and commercial property inspections. 

The technology aspects of this project will be implemented in several phases.

 

2011 Information Technology Budget Overview

Mr. Overpeck reviewed Citizens’ 2011 IT Budget, highlighting a $3 million difference from 2010 that is mainly due to an increase in new strategic initiatives, among which include the new core systems project. 

He noted that approximately 60 percent of the Budget supports Citizens’ insurance operations.

The Committee approved submission of the Budget to the Board of Governors (“Board”) for approval.

 

IT Consent Agendas for December 2010 Board of Governors Meeting

Citizens’ governing statutes require that vendor contracts valued at $100,000 or above must be approved by the Board.

Mr. Overpeck stated that, in past years, the Committee has written one “fairly large” consent agenda for all planned expenditures on government contracts.  Going forward, contracts will be brought individually to the Board. 

Without further discussion, the Committee voted to support a list of IT consent agenda items to be reviewed by the Board at its December 2010 meeting.  These are contracts that will be either acquired or renewed in the first quarter of 2011, or have applicability to a term over the course of the year. 

Further consent agenda items may be presented during 2011 for specific projects that exceed $100,000. 

 

Citizens Third-Quarter 2010 IT Accomplishments

A listing of IT accomplishments achieved during the third quarter of 2010 was reviewed by the Committee, which included:

• Deployment of the new version of claims estimation software, Xactimate (v27.1)
• Issuance of a formal Request for Information to determine vendor capabilities for Corporate Data Center Re-Alignment Program services required by Citizens. Current knowledge of vendor offerings will support development of a procurement specification, planned for early 2011.
• Provision of technology architecture assistance for Citizens mitigation inspection program. This included an enhancement of underwriting productivity related to inspections processing. A Web-based service also was developed that automates the Inspection Report Transfer process and provides a secure data transmission from the inspections vendor to Citizens. Additional programs were developed to automatically prepare and route inspection reports to the appropriate underwriting section.
• Consolidated the Agent Tracking System into ePAS.  This provides enhanced functionality for Agency Services, and also eliminates an application that required duplicate data entry.
• Upgraded the user interface for personal residential policies to align with the standards used for those of personal residential wind policies, thereby providing enhanced usability.
• Completed the formal procurement specification for the Replacement Cost Estimator project.
• Completed the Florida Hurricane Catastrophe Fund (“FHCF”) data marker project for the AS400/Wind system to ensure accurate information exchange with the FHCF for Commercial Wind policies.
• Completed activation of a higher capacity network line between Citizens and its vendor for outsourced commercial multi-peril policies, which  was needed to ensure timely daily updates of first notice of loss information to claims systems.
• Phased in a system that allows documents and checks associated with personal lines claim payments to be collated and inserted into envelopes with minimal handling.  This provides a sizeable savings on a daily basis, as well as supports Citizens’ ability to scale-up business processes to better handle the large volume of claims that would be associated with a hurricane.  
• Completed a feasibility study for an Enterprise Fixed Asset Management system to meet the needs of Accounting, Facilities, General Services and Information Technology Administration. The resulting recommendations are currently being reviewed.
• Citizens now has the capability to send data files containing claims and other basic policy information to credit reporting agencies approved to receive this information.  At this time, these agencies include ISO and LexisNexis; however, other agencies may apply and be approved in the future. This capability has been implemented for all Policy Management Systems; ePAS, Wind, Point and Phoenix (historical Poe information).
• Completed the implementation of a weekly data feed of policy in-force information from the Citizens Data Warehouse to the Actuarial Data Mart in support of the Claims Geographic Information Service Web Mapping service for Citizens’ Claims Department.  The data feed includes policy information on all active policy management systems; ePAS, Wind and Point.  The Claims Department will be using these geographic mapping capabilities to prospectively map the path of catastrophic events.

 

With no further business, the meeting was adjourned.

 

Should you have any questions or comments, please contact Colodny Fass.

 

 

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