NU Online News Service

The Council of Insurance Agents & Brokers and LexisNexisannounced they have partnered to build a Web-based insuranceexchange for the independent agent-based distribution system.

The groups said their new exchange, which will begin test runsnext summer, will automate and simplify insuranceintermediary/insurer distribution workflow and enable access to keymarket information and analytics for better decision-making.

CIAB, based in Washington, represents commercial insurancebrokers and agents in the United States and abroad, and LexisNexisis a global provider of content-enabled workflow solutions.

The two entities said the planned exchange is aimed at"improving the efficiency and transparency of the independentagent-based distribution system" and will combine technology andinformation at each of the key workflow steps of the insurancetransaction process to reduce redundant work and costs.

In addition, they said the exchange should enable agents andbrokers to offer clients a broader choice of insurance products andall types and sizes of industry participants will be able toutilize the exchange.

It was explained that LexisNexis Risk Solutions had worked withCIAB to develop the plan for the new Web-based system enablingagents and brokers to submit insurance applications in a one-step,real-time process.

The new exchange solution, CIAB and LexisNexis said, also allowsbrokers to see insurance product availability, pricing and coveragedifferences from multiple insurance carriers, enabling them toplace business that best matches client needs.

CIAB and LexisNexis said prior to this new exchange,intermediaries had to separately interface with the computersystems of insurance companies, causing a significant amount ofredundant work.

They added that the exchange will also provide a single-entrygateway to wholesalers to broaden and provide more efficient accessto additional markets.

It was explained that LexisNexis in creating the system drew onmore than three decades of database and analytics modelingexperience.

The technology platform that has been developed, theorganizations said, will allow insurance carriers and brokers totrack recent trends in insurance product pricing and coverage, inturn helping the industry align itself more rapidly to customerneeds.

LexisNexis will also provide risk-related data on a secure basisinto the exchange workflows, which will improve underwriting andreduce broker data-entry time.

Ken A. Crerar, CIAB president, said, "Our agent/broker memberssee this exchange as vital to addressing inefficiencies inherent inthe multicarrier distribution system that otherwise has worked sowell for our industry."

He said that CIAB "worked very closely with LexisNexis to ensurethat openness and objectivity were the cornerstones of theexchange. The key to the success of the exchange istrust--together, we have strived to ensure the new exchange servesthe insurance industry as a whole."

James M. Peck, LexisNexis Risk Solutions chief executiveofficer, said, "The enthusiasm of the broker community and theclear opportunity to improve their day-to-day processes made this acompelling business case for us. Our technology behind theinsurance exchange is a great fit for helping this industryovercome some of its current challenges."

LexisNexis and CIAB said the insurance exchange will initiallyconcentrate on commercial lines. All sizes and lines of propertyand casualty insurance will eventually be supported as will,potentially, other non-property and casualty implementations (e.g.,group benefits).

The exchange will heavily leverage the industry standards builtby the Association for Cooperative Operations Research andDevelopment (ACORD) organization.

"Our expertise in commercial lines rating and policy processinghas positioned us to address this important commercial linesautomation priority for the exchange," said Jeffrey Glazer,LexisNexis senior vice president and general manager InsuranceSolutions.

Glazer added, "We have also been able to bring together somevery strong, relevant technology partners to accelerate our productlaunch timing." The exchange plans to start pilot programs forselected lines beginning in the summer of 2010, with fullproduction scheduled for early 2011.

The insurance exchange will be supported by a broker-controlledand operated entity called The Insurance Exchange Trust (IET). Thepurpose of the IET will be to provide a vehicle for agents andbrokers to ensure the exchange operates according to its foundingprinciples of fairness, neutrality and protection of data. It alsowill serve as an advisory board to LexisNexis on exchangeissues.

"While this exchange was spearheaded by Council members, make nomistake--it is for the entire industry--every size and shape firmwill benefit from participating," said Markham McKnight, presidentof BancorpSouth and CIAB chairman.

Wade Reece, chairman and CEO, BB&T Insurance Services andCIAB vice chairman, said, "We, as brokers, have created a powerfulpartnership with LexisNexis that portends well for our combinedability to serve our customers. Now we need to move rapidly forwardtogether to build something that really makes a difference on ourdaily workloads and get it in the hands of our agents and brokerswho have been wanting it for so long."

LexisNexis is a global provider of content-enabled workflowsolutions designed specifically for professionals in the legal,risk management, corporate, government, law enforcement, accountingand academic markets.