Copyright © 2004 Business Insurance

"Web-based systems ease broker, carrier interaction" November 15, 2004

by Rodd Zolkos

 

A lot is said about doing business in real time, but for many of the Web-based business systems in place in the insurance industry, the ultimate goal is making agents' and brokers' jobs easier and, consequently, more profitable.

Various systems help agents and brokers find markets, evaluate difficult risks and even place business with insurers.

Along the way, the systems offer benefits to insurers as well, providing a way to bring them new business and making the process of placing coverage more efficient.


"The agent is always going to favor a company that he can deal with easily and efficiently," said Dean O'Hare, retired chairman and chief executive officer of Chubb Corp., who recently was named chairman of SeaPass Solutions Inc.

New York-based SeaPass develops and markets systems that enable insurers, agents, brokers and wholesalers to work with existing systems to transmit and receive data in real time in conducting insurance transactions.

Some systems also can play to insurers' benefit in speeding the process of responding to submissions. Don Urbanciz, CEO of Chicago-based InsuranceVianet Inc., notes that, with agents typically having a good sense of what a piece of business is worth, "the carrier who gets the quote back first generally gets the business."

InsuranceVianet is a holding company that is parent to InsuranceNoodle Inc., a Web-enabled wholesaler of commercial property/casualty insurance products focusing primarily on small business risks.

Mr. Urbanciz, who previously headed Marsh Inc.'s Chicago office, said InsuranceNoodle was formed in response to a need in the industry. Most insurers have "a voracious appetite" for business from companies in the range of 50 employees or fewer, he said. "The underwriters find it probably the most lucrative of any of the commercial business," he said.

But while insurers involved in that market "had spent a tremendous amount of money" developing the technology to serve the market, all their systems were proprietary, making it difficult for agents to work with them, Mr. Urbanciz said.

"We came into the question saying, `We're going to build some middleware technology that will allow you agents to enter an application into our system, and we will distribute it,"' he said. "The promise of the business is that we would take a position as an intermediary, a wholesaler if you will, in a nontraditional sense."

InsuranceNoodle's goal was to get a bindable quote back to agents within 48 hours of a submission. Meanwhile, while allowing carriers to interact with their system without having to do anything differently, the online distribution platform could help insurers contact agents they otherwise might not be reaching.

"We've gone to where the small business is," Mr. Urbanciz said, which represents "a sea of 40,000, 50,000 agents."

And that market is getting more technically savvy, he suggested, for example, moving from slow modem connections to high-speed Internet access. "A lot of those agents even four years ago just had dial-ups," he said. "That has changed."

Kathryn Emmerson, CEO of InsuranceNoodle, noted that there were several businesses with goals similar to her company's when it was started in 2000, but most have since left the market.

"The difference, we thought-and, today, one of the reasons we survived-is that we were ready to work with each of the carriers in the way they wanted to work," she said. "We are very flexible in working with them."

The company is licensed in 49 states and is continually adding carriers and products.

"We're getting about 150 new quote requests a day," said Andrew Wood, InsuranceNoodle's chief operating officer, adding that the online wholesaler received about 30,000 such requests in 2003.

The information InsuranceNoodle captures in connection with those applications shows what business agents place successfully "and, as importantly, what we're turning away and why," Ms. Emmerson said. "For example, with janitorial services, it's because of floor wax problems." That information can be shared with agents to help them find ways to deal with clients' exposure issues and make them more attractive risks.

In an effort to deal with more difficult risks, InsuranceNoodle created program manager Noodle Specialty Brokers to tap the excess and surplus lines market. "We really want to say to an agent that there's an eight, nine of 10 chance that we'll be able to give you a quote within 48 hours, hopefully, 24 hours," Mr. Urbanciz said.

"The other thing we tell carriers, the other business proposition for this, is they can tell us the kind of business they want, and we can help them find that," Ms. Emmerson said. And the fact that data is entered only once increases accuracy, reducing the error rate in submissions and policies.

At SeaPass, the company essentially provides an electronic gateway, allowing insurers and agents to transact business using their existing systems. "What's unique about our system is we're allowing all partners, whether it be the agency, the carrier, to leverage what they already have in terms of technology," said Eric Gewirtzman, the company's president.

"There are no two insurance companies that have anything near the same system," said Mr. O'Hare, the company's chairman.

"It's making it easier for the agent to work with the carrier," Mr. Gewirtzman said.

"In general, what SeaPass does is not only accept insurance information but allow the user to interact with the carrier in a very simple fashion," he said. "It's out there live, and carriers and agents are working with it."

Among the insurers working with the SeaPass system are The Hartford Financial Services Group Inc. and Selective Insurance Group, Mr. Gewirtzman said. Different companies are using it for different purposes, some for personal lines such as auto and home, others for small business policies and workers compensation.

The system allows agents to get real-time quotes from carriers, submit applications, transfer books of business, submit endorsements and download information from insurers into the agent's management system.

Other tools

For regional brokers who are members of RiskProNet International, among the tools offered on the network's Web site is a mechanism for sharing market information.

Users can sign up for various broadcast lists such as commercial insurance, benefits, loss control, marketing and placement and claims. Marketing and placement users can send out requests to others for information on specific markets. Responses come back directly to the query's sender but are archived so members can search them later.

"The group got together and said, `Gee, wouldn't it be nice if we could capture this message and capture the responses without seeing it so we can go back and search it later,"' said Gary Normington, executive director and CEO of Menlo Park, Calif.-based RiskProNet.

Broker members can post such queries as "Does anyone know of insurers or markets who can underwrite this risk?" Queries are entered into a template with spaces for business description, location and other information. The system has been in use for about five months.

"This has gone over really well," Mr. Normington said. "They're using it because they're getting good information from it."

The RiskProNet member site also offers an online document center that allows members to create customized information kits and sales sheets.

Agents are also working through their industry associations to advance opportunities the Web might provide for improving the way they do business.

The Independent Insurance Agents & Brokers of America, for example, has its Agents Council for Technology, which drew praise from the organization's outgoing president, Louise Canter, at the Big I's annual convention last month in Orlando.

"Through ACT, the Big I has established a forum in which agents, carriers, vendors and user groups come together to develop technology that will be of realistic use to us in our agencies," said Ms. Canter, senior vp of Patterson/Smith Associates in Falls Church, Va.

"From a profitability standpoint, to a training standpoint, to having a vital communication link with our clients and with our companies, we all need to fully embrace technology," Ms. Canter said.

© Copyright Business Insurance 2004