The Council of Insurance Agents and Brokers is partnering withLexisNexis to build a Web-based insurance exchange for independentproducers, with test runs set to begin next summer.

The groups said their new exchange will automate and simplifyinsurance intermediary/insurer distribution workflow and enableaccess to key market information and analytics for betterdecision-making.

The pair said the plannedexchange is aimed at “improving the efficiency and transparency ofthe independent agent-based distribution system,” and will combinetechnology and information at each of the key workflow steps of theinsurance transaction process to reduce redundant work andcosts.

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

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–citinggroup benefits as an example.

The exchange will “heavily leverage the industry standards”built by ACORD, the groups noted.

The exchange plans to start pilot programs for selected linesbeginning in the summer of 2010, with full production scheduled forearly 2011.

The insurance exchange will be supported by a broker-controlledand operated entity called The Insurance Exchange Trust. 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,according to the partners. It also will serve as an advisory boardto LexisNexis on exchange issues.

“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 CIAB Chair Markham McKnight,president of BancorpSouth.

LexisNexis Risk Solutions worked with CIAB to develop the planfor the new Web-based system, with the goal of “enabling agents andbrokers to submit insurance applications in a one-step, real-timeprocess.”

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, drewon more 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, the partners said.

“Our agent/broker members see this exchange as vital toaddressing inefficiencies inherent in the multicarrier distributionsystem that otherwise has worked so well for our industry,”according to CIAB President Ken A. Crerar.

He added that CIAB “worked very closely with LexisNexis toensure that openness and objectivity were the cornerstones of theexchange. The key to the success of the exchange is trust.Together, we have strived to ensure the new exchange serves theinsurance industry as a whole.”

James M. Peck, chief executive officer for LexisNexis RiskSolutions, 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.”

“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 for insurancesolutions. “We have also been able to bring together some verystrong, relevant technology partners to accelerate our productlaunch timing.”

Wade Reece, chair and CEO at BB&T Insurance Services as wellas CIAB's vice chair, said that “we, as brokers, have created apowerful partnership with LexisNexis that portends well for ourcombined ability to serve our customers. Now we need to moverapidly forward together to build something that really makes adifference on our daily workloads and get it in the hands of ouragents and brokers who have been wanting it for so long.”