Identity Resolution Daily

Poor Humana Insurance Co. In their 4Q earning report from 2006, the company stated that “Medical membership grew 4.2 million in 2006 to 11.3 million.” Unfortunately, this year Humana broke the law by using unlicensed agents to sell Medicare Advantage and prescription drug plans to Oklahoma seniors and was fined a hefty $500,000:

“Humana spokesman Jeff Blunt said the 68 agents in question were licensed, but not in Oklahoma. ‘What happened here was a border issue,’ Blunt said. ‘Oklahoma residents living near the border traveled across state lines or called an agent in another state and enrolled in a plan through those agents.”’

Actually, this was a database issue. And fixing the problem would have been easy, not to mention affordable.

The names of the Oklahoman customers were in a company database. The addresses of these Oklahoma residents were also in a database. And the names and addresses of the out-of-state agents who sold the plans were in a database. So why oh why then weren’t these new plans automatically rejected? Why couldn’t the data from the all the various databases be accessed to provide actionable business intelligence?

You know the CFO of Humana is asking that question now.

If Humana had only had the ability to tap into the data they already had in house, they could have saved themselves from a half million dollar fine, not to mention the bad publicity.

This is what Jeff Jonas has called “enterprise amnesia,” which happens when “an organization misses the obvious (e.g., when other relevant information is trapped elsewhere in their organization) and then takes incorrect action.” The problem is that the individual nuggets of information are too often contained in disparate silos - with no effective way to provide a “big picture” view that can be acted upon.

If Humana had had an identity resolution solution in place, they could have sifted through all their information — across different databases, systems and geographies. Then as the new plans came in from the agents the identity resolution solution could have searched the employee/agent database to ensure that the agents was licensed within Oklahoma.

Simply put, an identity resolution solution solves the enterprise amnesia problem — and prevents big fines — by allowing an organization to manage the identities of its customers, vendors, and employees across the enterprise.

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[Daily Post from Infoglide Software] Identity Resolution and Mergers and Acquisitions

“With mergers and acquisitions, there’s always customer overlap issues in any industry. In the insurance industry, with some customers attempting to defraud insurers by using multiple identities, it’s critical to the bottom-line to cross-reference multiple identity records against not just watch lists but also the following business applications…”

Christian Science Monitor: Airport screening raises privacy issue

“The TSA will also offer people an opportunity to provide their date of birth and gender, so that if their name is the same or very similar to one the watch list the TSA can easily, and permanently, distinguish between them. TSA officials contend that with just a name, 95 percent of the matches against the watch list will be accurate. With a name and date of birth, that percentage goes up to 98.5 percent. Add date of birth, and officials insist there will 99.5 percent accuracy.”

Government Computer News: DHS bares upgrades to immigration travel databases

“The Homeland Security Department has unveiled several important upgrades to databases that collectively contain tens of millions of personal records concerning immigration and travel. Some of the changes are intended to foster information sharing among organizations inside DHS as well as with outside government agencies. Others aim to reorganize the databases internally so as to make them easier to use. “

Retail Solutions Online: Grow Business - Reduce Shrinkage: The 2% Solution

“On a daily basis, retail loss prevention (LP) executives face the daunting task of diminishing corporate financial loss. Add protecting assets and increasing profitability to the mix, and LP executives have a lot on their plates. Still, one thing is on almost everyone’s mind: Shrink rates are on the rise, costing retailers upwards of 2 percent of their sales each year. It’s a constant struggle to detect and prevent inventory shrinkage, as well as internal losses like check fraud, cash theft, and Internet sales fraud.”

Washington Post: Former Guard Accused Of Hiding Muslim Ties

“Federal prosecutors now allege that Jackson intentionally withheld his Muslim name, Abdul-Jalil Mohammad, to conceal a connection to a controversial imam in Southeast Washington.”

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By Glenn Hopkins, Director of Financial Services

Joe Bel Bruno with the Associated Press recently pondered if the “beating Wall Street suffered this past week might have actually created the perfect conditions to launch its revival - cheaper stock prices can herald a comeback for corporate acquisitions.” This story prompted me to ponder databases and the glorious mess that M&A activity creates when one large enterprise gets the urge to merge with another large enterprise.

In his article, Mr. Bel Bruno quotes Quincy Krosby, chief investment strategist for The Hartford as saying

“Public companies are still sitting with tremendous amounts of capital, and with valuations going down, this is a very good opportunity for strategic takeovers. […] No matter what kind of stock market conditions you’re in, there will always be catalysts.”

So far in 2007, we’ve seen $1.26 trillion in acquisitions. And after a four year run-up in the market, conditions are ripe for companies to go on an M&A spree.

Just today I saw a $1.3 billion in cash deal when Dutch AEGON acquired the life insurance operations of U.S. investment bank Merrill Lynch. Regarding the acquisition, Patrick S. Baird, president and chief executive of Aegon USA, told the New York Times:

“But certainly, we are global and they are global — and having a good strategic relationship with them, we’d certainly intend to pursue more global product sales with them.”

Most certainly, the two companies will now be facing data compatibility issues when they begin to look at what databases they have in place now. For claims and underwriting purposes, AEGON will want to access all of Merrill Lynch’s data.

Instead of implementing a master data management program, I know that AEGON would be better served — and save lots of capital — if they bolted an identity resolution solution onto their existing architecture. And instead of merging or purging all the identities both companies possess, an identity resolution solution can sift through all the information and keep it all in its native formats for future use.

With mergers and acquisitions, there’s always customer overlap issues in any industry. In the insurance industry, with some customers attempting to defraud insurers by using multiple identities, it’s critical to the bottom-line to cross-reference multiple identity records against not just watch lists but also the following business applications:

• Automated fraud detection

• Underwriting risk management

• Enterprise identity management

• Transactional CRM

• Compliance

• Background checks

• Producer risk assessment

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