The Council of Insurance Agents & Brokers and LexisNexis Form Partnership to Build Insurance Exchange
New Insurance Exchange to Automate Insurance Intermediary/Insurer Distribution Workflow and Enable Access to Key Market Information and Analytics for Better Decision Making
October 12, 2009 — Washington, DC, October 12, 2009 - The Council of Insurance Agents & Brokers (The Council), representing the leading commercial insurance brokers and agents in the United States and abroad, and LexisNexis, a leading global provider of content-enabled workflow solutions, today announced the creation of an insurance exchange directed at improving the efficiency and transparency of the independent agent-based distribution system. The new exchange will combine both technology and information at each of the key workflow steps of the insurance transaction process to reduce redundant work and costs, as well as to enable agents and brokers to offer clients a broader choice of insurance products. This development is the result of a partnership formed through The Council with the agent/broker community and LexisNexis to ensure all types and sizes of industry participants can utilize the exchange.
LexisNexis® Risk Solutions worked with The Council to develop the plan for the new Web-based system that enables agents and brokers to submit insurance applications in a one-step, real-time process. The new exchange solution also allows brokers to see insurance product availability, pricing, and coverage differences from multiple insurance carriers, enabling them to place business that best matches client needs. Prior to this new exchange, intermediaries had to separately interface with the computer systems of insurance companies, causing a significant amount of redundant work. The exchange will also provide a single-entry gateway to wholesalers to broaden and provide more efficient access to additional markets.
Drawing on more than three decades of database and analytics modeling experience, LexisNexis has developed a technology platform allowing insurance carriers and brokers to track recent trends in insurance product pricing and coverage, in turn helping the industry align itself more rapidly to customer needs. LexisNexis will also provide key risk-related data on a secure basis into the exchange workflows, which will improve underwriting and reduce broker data-entry time.
"Our agent/broker members see this exchange as vital to addressing inefficiencies inherent in the multi-carrier distribution system that otherwise has worked so well for our industry," said Ken A. Crerar, president of The Council of Insurance Agents & Brokers. "The Council worked very closely with LexisNexis to ensure that openness and objectivity were the cornerstones of the exchange. The key to the success of the exchange is trust-together, we have strived to ensure the new exchange serves the insurance industry as a whole."
"The enthusiasm of the broker community and the clear opportunity to improve their day-to-day processes made this a compelling business case for us," said James M. Peck, CEO, LexisNexis Risk Solutions. "Our technology behind the insurance exchange is a great fit for helping this industry overcome some of its current challenges."
The insurance exchange will initially concentrate on commercial lines. All sizes and lines of property/casualty insurance will eventually be supported as will, potentially, other non-property/casualty implementations (e.g., group benefits). The exchange will heavily leverage the industry standards built by the Association for Cooperative Operations Research and Development (ACORD) organization.
"Our expertise in commercial lines rating and policy processing has positioned us to address this important commercial lines automation priority for the exchange," said Jeffrey Glazer, senior vice president and general manager LexisNexis® Insurance Solutions. "We have also been able to bring together some very strong, relevant technology partners to accelerate our product launch timing." The exchange plans to start pilot programs for selected lines beginning in the summer of 2010, with full production scheduled for early 2011.
The insurance exchange will be supported by a broker-controlled and operated entity called The Insurance Exchange Trust (IET). The purpose of the IET will be to provide a vehicle for agents and brokers to ensure the exchange operates according to its founding principles of fairness, neutrality and protection of data. It also will serve as an advisory board to LexisNexis on exchange issues.
"While this exchange was spearheaded by Council members, make no mistake-it is for the entire industry-every size and shape firm will benefit from participating," said Markham McKnight, president of BancorpSouth and Council chairman. Wade Reece, chairman and CEO, BB&T Insurance Services and Council vice chairman, further added, "We, as brokers, have created a powerful partnership with LexisNexis that portends well for our combined ability to serve our customers. Now we need to move rapidly forward together to build something that really makes a diffe