18 ITAPro // June 2017 // www.emagazine.ITApro.org
AT A TIME
The California Earthquake Authority, through its two dozen
participating insurers, is working to find a compelling reason
for the state’s homeowners to purchase coverage. A new policy
administration system could be the key to that attempt.
By Robert Regis Hyle
When Todd Coombes interviewed for a position with the California Earthquake Authority, a provider of earthquake coverage used by
two dozen California insurers, he had no idea the
discussion would lead to a transformation of the
approach used to process CEA business. Four years
after that interview, Coombes, now the chief insurance and technology officer of the CEA, is putting in
place innovative concepts that came from that early
During the interview, Coombes was asked to
create a presentation around what it would take to
centralize policy processing so all the organization’s
participating insurers could use one system.
The executive team at CEA always looked at
centralized policy processing as an aspirational goal,
according to Coombes. The CEA has 24 member
participating insurers—reprenting some 80 percent
of Calkifornia’s home insurance market— selling
the CEA policy on its behalf. To put one system
together and get them interested in using it offered
tremendous benefits and challenges.
“I don’t think our executive team expected us
to move forward with this as quickly as we did, but
as we began to craft our technology strategy and
identify our offerings, we realized there was a real
possibility in making it happen sooner rather than
later,” says Coombes.
Coombes and his team went to work on the
project in 2014. It began with the creation of a
working group that included CEA’s participating
insurers to discuss the
concept, lay out the
problems and issues the
insurers face, and how
a solution such as this
could be beneficial for
them. The CEA did not
according to Coombes.
The idea was to make
it so compelling the
insurers would choose
to take part.
Each of CEA’s participating insurers have their own policy and claims
systems, so whenever the CEA makes a change to its
earthquake policy—once every three or four years
on average—the insurers have to dedicate resources
to implement it across their systems and adjust their
internal practices and policies to fit the changes, as
required by the regulator.
While policy changes don’t make the participating insurers happy, Coombes explains there are valid
reasons to evolve the policies, address the needs of
the consumer, and to get as many California homes
as possible insured against damaging earthquakes.
The CEA is a not-for-profit organization. It is
not a state agency; it’s what’s called “a public instrumentality of the state of California,” according to
Coombes. The CEA was created by state statute in the
1990s, but it is privately funded and does not use tax
dollars. The money received from premiums funds