Insurers have been inundated by a flood of e-commerce initiatives and cataclysmic scenarios about the transformation which technology is set to bestow (or impose) on the industry.
The reality becomes clearer every day. Internet technology will not render brokers, agents, risk managers and underwriters obsolete overnight, but will provide new operating tools, which promise to be cheaper, faster, more efficient and reliable than what has gone before. Not a day goes by without some new initiative, Web portal, or business service being announced.
Although they all overlap at various points, the new information portals or Web sites can generally be categorized as follows:
• Customer to insurer. Sites that give individuals or businesses access to their agent, broker or carrier directly over the Web. They provide quotes, risk management advice, premium and claims payment services.
• Insurance business to business (IB2B). Sites that link brokers, agents, insurance providers, underwriters and risk managers, giving instant access to one another to explore insurance products, as well as compare costs and coverages, making it simpler to construct individual policies, insurance packages or programs.
• Inter-corporate. “In house” sites that provide access between the various units of a large insurer or broker in order to use all the tools the company may have to coordinate and assess risks, costs, program developments, premiums, investments, etc. They also give management a much quicker and accurate method of learning about and controlling operations within the company.
The rapid expansion of e-commerce includes the following recently announced initiatives:
AIG launched a series of new “eBusiness initiatives” designed to address the product distribution, customer service and informational needs of the businesses, consumers, brokers and agents serviced by AIG’s member companies.
The new sites include: www.aigdirect.com, which handles personal lines and small business commercial insurance products underwritten by AIG member companies; www.aigonline.com, which provides analytical services, tools and information for risk managers and other business professionals, allowing AIG insureds to monitor their policies and claims online; www.accessaig.com, a specially designed site for p/c brokers and agents working with AIG’s Domestic Brokerage Group, life insurance producers of the AIG Life Companies (U.S.), and Sun America broker/dealers and licensed representatives; and www.aigcorporate.com, which provides general corporate information, investor information, and links to AIG companies and services worldwide.
In line with Chairman Max Taylor’s statement that “electronic commerce is redrawing trading patterns,” the Beazley syndicate at Lloyd’s recently introduced “EazyPro,” an online system which concentrates on E&O and D&O liability, employment practices, fiduciary and related commercial liabilities. EazyPro is designed to allow Lloyd’s brokers and their chosen U.S. surplus lines brokers to buy Lloyd’s coverage on behalf of their small- and medium-sized U.S. business clients using an interactive Trading System.
The service aims to simplify and speed up operating procedures and will also provide backup services: “Once a risk is bound, the transacting broker will receive instant confirmation of coverage followed by full policy documentation within one working day, while settlements-including claims payments-are made directly with the client’s surplus lines broker.” Full information is offered on the Web site, www.eazypro.com, or by e-mail, email@example.com.
Winterthur Insurance Group, a subsidiary of Credit Swiss First Boston, recently contracted with Dublin-based Iona Technologies to “build a web-to-host claims reporting and processing system…based on Iona’s iPortal Suite™.”
Winterthur chose the system not only because it offers “high performance, reliable applications,” but also because it can be integrated with existing systems. Iona Chairman and CEO Dr. Chris Horn stated, “The new B2B platform enables the reuse of previously developed components, and facilitates the integration of core business applications into new applications.” This is becoming increasingly important for insurers seeking to expand and improve data processing systems.
The ultimate goal of e-commerce is to make everyone’s lives easier-insurers and clients. This was the announced purpose of American Re’s recent redesign of their Web site. As a member of the Munich Re group, the world’s largest reinsurer, the company now offers increased access to different areas in its Web site, www.amre.com. It offers a “Business Center-with online submission forms for property and casualty facultative, home, foreign, international and ocean marine risks,” and a Reference Library, among other features.
“American Re’s redesigned site will be one of our main portals for true business-to-business transactions with our clients,” stated Vice President William Ludwick, head of AmRe-solutions, American Re’s e-commerce group.
The changes are more than cosmetic. “The new site repositions American Re’s Internet presence 180 degrees,” stated Kristy Hedberg, president and COO of Blinke Inc., the e-commerce firm Am Re worked with to develop the new site. “The redesign transforms what was an informational site into an insurance industry resource.”
Royal & SunAlliance USA (RSA) announced at the recent RIMS Annual Conference in San Francisco its adoption of a system called ARMS (Advanced Risk Management System) International, which will greatly speed the flow of claims processing and account manage-ment.
“The way the system works is that your local subsidiary or their local agent reports a loss to their local Royal & SunAlliance office virtually anywhere in the world,” stated John Woodman, multinational practice leader for RSA. He went on to explain that this information is then entered in “our worldwide database-Atlas,” which then correlates and makes the information available to risk managers who can see at a glance
up-to-date activity on global programs.
Again, increased efficiency is the main goal of such systems. “We believe that if we provide our customers with accurate, timely information on worldwide programs, risk managers can spend more time on improving their business and less time tracking down loss information,” Woodman stated.
Finally, software makers seem to be on the way to solving the vexing problem of security in e-commerce transactions. At the end of March, Dallas-based ZixIt announced a new program named ZixMail™, “compatible with virtually every type of e-mail system” that offers “secure document delivery, private e-mail and
message tracking service.” According to ZixIt, the system “can store and distribute encryption codes for every e-mail address in the world (nearly 600 million currently),” and can process 4 million messages an
Deutsche Banc Alex. Brown hailed the encryption advance as a real breakthrough for insurers. “We believe secure document delivery through sources like ZixIt (and close competitor NetDelivery) has to be one of the most important innovations in insurance…Now, a low-cost, simple and secure service is available…This is so simple an innovation yet with profound implications-lowered cycle time and less manual handling,” said the authors of the report.
The above initiatives are only a few of those announced within the last month, and they show just how rapidly the Internet is changing the way the insurance industry does business. Its full potential still remains to be seen.
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