Saying that IT Governance and security (ITGS) takes time is like saying that pit stops cause slow lap times in a NASCAR race. Of course ITGS takes time, just like pit stops in a race, and ITGS has a cost, just like tires on a racecar. But if you want to finish the race it has to be done. The difference is when a racecar runs out of gas or blows a worn tire it stops. There is no finish and there is no more forward motivation. When an organization has a security breach or a failed audit the reaction is often to write lengthy excuses blaming someone or something along with an ambiguous explanation telling how the current problem will be prevented in the future. And, unfortunately, few actual changes are made to the system or processes and the rest of the organization keeps moving, however ineffectively, until the next breach happens or audit fails. And this is where the organization pays the cost in the form of fines, consequence mitigation and damage to reputation.
How can this be allowed to continue? It continues because few people understand the broad scope of ITGS or the benefits of an up-to-date IT Governance framework. Fewer still understand the relationship between business strategy and IT strategy. Most of the individuals, at all levels of staff and management, in an IT organization exist in silos and they have trouble seeing beyond that silo and their own responsibilities or projects. But it does not have to be that way. By incorporating an IT Governance framework into every day operations the cost will be minimal and the benefits will be great. Imagine being able to quantify the risk associated with every system in your organizations IT infrastructure and being able to compare the quantified level of risk to see which system is most vulnerable. Then imagine being able to qualify the level of risk to each system with an intelligent analysis of each system that describes hardware, software, processes and policies involved. Can you see how that kind of up-to-date information could help you make an informed and effective decision on where to spend your next IT dollar? No more guessing and no more costly mistakes.]]>
This plan has never worked and this is just the latest attempt by the industry to probe the consumer to test their defenses. The average internet user is awfully savvy about how they are being billed and, obviously, have a lot of information at their finger tips. Many of us spend much of our time on the internet while we are making our living. Consumers have been against being charged by the byte for a long time so today’s article on CIO is no surprise.]]>
Independent Insurance Claims Adjusters
There are several associations and fee-based organizations that provide services to independent insurance claims adjusters. Most notably the National Association of Independent Adjusters and the fee-based services from E-claim.com. A more comprehensive list is provided in Table A below. There are many smaller regional associations that represent independent adjusters but do not seem to provide services like advertising and claims-assignment to members. The fact that these regional organizations exist indicates that independent adjusters are organized and are viable meaning they are making money without being employed by the larger adjuster service companies or an insurance company. These adjuster organizations large and small, regional or national give even a small independent adjuster the necessary exposure in the industry. The independent adjuster can advertise, keep up with industry trends and find additional resources to do their job through these organizations.
The services currently available to the independent adjusters allow insurance companies and others that need claims services to assign claims to independent adjusters on-line and allow the adjuster to receive the information in a short period of time. I can’t determine to what extent the client organizations are currently making use of technology to get information to the adjuster, however, the ability to use the internet to find a suitable adjuster, contact the adjuster and send at least minimum information to the adjuster on-line is allowing many independent adjusters to do business and compete with large adjusting firms. It is a small step from there for the client to e-mail, e-fax or otherwise electronically transfer additional information to the adjuster. When the adjuster has completed the claim his work can be sent back to the client over the same medium.
With a simple website and a minimal amount of software and hardware an independent adjuster could easily provide the portal for a client to upload information about the claim as well as download the finished claim material from the adjuster. This information could include legal or industry forms, digital copies of contracts, digital signatures and even large digital photographs. E-claim.com provides these website services, in fact, any competent website designer could easily design and host this kind of website for a few hundred dollars using open source software. This kind of minimal web presence could allow a client and adjuster to communicate and share information real-time.
Barriers to entry
There are few barriers to entry into the insurance adjuster field. An applicant has to be 18 years old, reside in the state, be trustworthy, show that they have “experience, specialized education, or training of sufficient duration and extent regarding the handling of loss claims” and pass a test (Texas Constitution and Statutes, Insurance Code, 2009, Sec. 4101.053). There are several education providers that teach courses that meet the education and training requirements and will teach the applicant what they need to know to pass the test. There is a $65.00 fee from the state to take the test and a $50.00 fee for the license.
Information from the Insurance Information Institute says that “many commercial insurers concentrate on certain types of businesses or insurance coverages or both. They may target firms in the energy or transportation fields, for example, building contractors or financial services institutions. They may be specialists in directors and officers liability insurance, medical malpractice liability insurance, surety bonds, crop insurance or workers compensation, sometimes covering other incidental risks as well. It is easy to see how an independent adjuster with this kind of specialized knowledge could carve out a niche market.
The American Society of Professional Estimators educates and certifies construction estimators and even provides an online list of estimators by region. These construction estimators offer consulting services that include cost analysis, participation in dispute resolution, expert witness testimony and claims negotiation. As described above, an estimator with this kind of specialized knowledge could easily comply with the requirements to become a licensed insurance claims adjuster in Texas. Likewise, experts in other fields such as aircraft engineers, commodities traders, accountants, civil engineers, environmental engineers, architects, jewelers and home builders could use their specific knowledge to analyze insurance claims.
Specialization may explain why the small independent adjusters (Mom and Pops) are succeeding because there may be few individuals who have specialized knowledge of a certain risk or insured technology/industry. These specialized individuals may have worked years to get this specialized knowledge and need only take a class to get licensed to become an adjustor. On the other hand, an adjustor can’t just take a class to get the same specialized knowledge.
In summary, if you combine the resources that are available to the independent adjuster through the adjuster organizations with cheap, off-the-shelf communications technology (cell-phone, laptop, PDA, digital camera, web portal), cost effective internet-based advertising and low barriers to entry; an independent adjuster has everything he/she needs to do business.
National Association of Independent Insurance Adjusters [naiia.com]
- Offers claims-assignment services to its members
California Association of Independent Insurance Adjusters [caiia.org]
- Provides a member search for members in cities and area codes.
New York Association of Independent Adjusters [nyadjusters.org]
- Provides a member search for members by region.
American Association of independent Adjusters
- Members include some apparently large companies including:
and Sedgwick CMS
- Also represents CL and the NAIIA as “Associate” members.
- Seems to be a PAC for the industry.
American Society of Professional Estimators [aspenational.org]
- this organization represents construction estimators.
- It appears that these estimators also hire out their services to
estimate losses for insurance companies.
Fee-based Adjuster Services
- Offers claims-assignment services to its members.
Casualty Adjuster’s Guide [cagworld.com]
- Provides adjuster search feature by region and claim category.
- Provides advertising for claims adjuster.
In the 1980′s only the largest companies used T1 and T3 lines that moved 1.5 Megabits/s of data and 4.5 Megabits/s of data respectively. Today, T1′s and T3′s are common in small businesses and larger companies are using technologies that allow 155 Megabits/s over wide area networks. Researchers at Carnegie Mellon University are working on a project to bring 100 Megabits/s bandwidth for internet connections to every home in America. Currently, the average bandwidth is less than 2 Megabits/s. Twenty years ago, 10 Megabits/s ethernet was common for local networks in the office and school. Today, companies have 2.5 Gigabits/s switched networks available that allow more than 100 Megabits/s transfer rates to every user on the network.
In 2001 the average Oracle data warehouse was 30 Terabytes and in 2005 it was over 100 Terabytes. That was more than 300 percent growth in just 4 years. Image how much data companies are storing in their databases today.
What all this means is that businesses and business people collect, process, transmit and store more data today than they ever have before. Exponentially more data. But are businesses making use of that data to create value? Is that data being turned into useful information and put into the hands of the right people at the right time to add to the company’s bottom line? Are we using the data and systems that we have now to their full potential now? The answer is no. I believe that, in many companies, the art of using technology and data effectively to run a more profitable and efficient business has been steadily replaced by the business of just having technology and data whether it is used or not.
It is easy to see how this would happen. First, companies are expected to have lots and lots of nice computer equipment full of lots and lots of data. Customers expect it and it is a selling point. Second, our successful economy has created a situation where managers are too busy dealing with growth and opportunities to make efficient use of what they have. In many places there is just not enough time and not enough pressure to create efficiency. However, that will change and I believe it is beginning to change in the economy overall right now. The correction in the stock market that brought the Dow back below 12,000 and the mortgage crisis that brought real estate prices down are just two indicators of this change.
Another consideration that every public company is currently dealing with is regulation. Not only are companies expected to keep tighter control over their data but they will be changing how they are using it in financial reporting. Privacy issues and the Sarbanes-Oxley Act are just two forces that are driving this change. Markets that are becoming increasingly global are causing pressure to create and agree upon International Accounting Standards that will put even greater pressure on the efficiency and effectiveness of information systems.
Managers are going to have to be careful to not miss the cues that tell them when they need to stop growing and start becoming lean and mean with what they have.
As always, comments are welcome. (Be polite!) Requests are considered. (Be reasonable!) Help is available. I’ll let you know if I have the answer. If I don’t I probably know who does.]]>