For years, agents and brokers have pursued an elusive goal: streamlined risk submission to multiple carriers that reduces policy errors and increases pricing and underwriting precision. That goal seems to be within reach.
The Council’s partnership with LexisNexis to create an electronic insurance exchange is the culmination of years of research and will transform the way agents and brokers do business.
The transactional aspect of the exchange will provide a single, efficient electronic system for agents and brokers to submit risks to multiple carriers and collaborate with them in placing, underwriting and pricing that risk. This is the realization of that elusive goal and an imperative in today’s marketplace. For both large and small risks, transactions are still chiefly accomplished by telephone, fax and e-mail. With today’s technology, there is no reason to perpetuate this inefficient and error-ridden process.
There is a unique aspect to the exchange that represents a previously untapped but very powerful data source for the industry: analytics on the marketplace for risk placement and market trends. All industry participants in the process–retail agents and brokers, wholesalers, managing general agents and carriers–will benefit from the enhanced product and risk management information and marketplace analysis that will be derived from the transaction data in the exchange.
I’m interested in the ability to harness data about our industry and using it to make the business better for everyone–from agents and brokers to carriers and, ultimately, our clients. When you look at the insurance industry compared with other financial services sectors like banking and securities, we have lagged in the use of technology to improve business processes and capture the data that provide industry analytics. The exchange will give us these abilities.
The Insurance Exchange Trust, which will be controlled by agents and brokers, will work with the exchange to facilitate openness to all parties, transparency, neutrality, protection of industry data and support for industry data standards. We believe these criteria are crucial to the exchange’s success and will work to ensure they are met.
We’ve been working for years to make the exchange a reality and we’re proud to be part of its development. Now the real work begins. Development of business rules and transaction standards will occur over the next several months with an eye toward a pilot program next summer and full launch in 2011. Your support and involvement will be critical to reaching the goal of a flourishing insurance exchange.