InsureHiTech.com, eReinsure.com to launch online exchange platforms.
Another tradition-bound industry is being swept up in the online exchange frenzyâ€"this time it's the insurance business. To help eliminate paper and streamline transactions, commercial insurance broker InsureHiTech.com will launch its Web-enabled insurance platform at Internet World this week in New York. Separately, eReinsure.com is beta testing an Internet negotiation and trading platform to allow insurers, reinsurers and brokers to more efficiently manage the reinsurance negotiation process.
Industry insiders say the insurance business is ripe for technologies that will cut costs, reduce paperwork, save time and increase productivity. In the first quarter of this year, the US property/casualty insurance industry's net income after taxes dropped 35.4 percent, to US$5.8 billion, down from US$9 billion in the first quarter of 1999, according to Insurance Services Office and the National Association of Independent Insurers.
Companies like InsureHiTech.com and eReinsure.com are working to help the industry stem that slippage. Insure HiTech.com, of Princeton, N.J., has created an online marketplace in which a client fills out an application on the Web site, a customer service representative selects insurance carriers for quotes, and the carriers receive the application information either by dialing in to the company's extranet or exchanging information via Extensible Markup Language on the Web site.
InsureHiTech.com provides its clients with a choice of quotes from top insurance carriers, insurance procurement services, risk management information delivery, integrated transaction processing, policies, endorsements, claims, certificates and data, officials said. It also offers online applications, purchasing, servicing and renewal processing.
The company's portal, built with technology from Sengen, the e-services unit of Bluestone Consulting , allows for single-entry insurance processing across all three transaction partiesâ€"the insured, agent and carrier. It also provides content, bulletin boards, streaming daily news feeds and online seminars featuring industry professionals, service providers and keynote speakers.
Next spring or summer, InsureHiTech.com will license the platform to other agents and brokers and operate as an ASP (application service provider). Pricing is not yet available.
But automation is not touching direct insurers alone. The reinsurance industryâ€"more popularly known as insurance for insurance companiesâ€"is beginning to embrace business-to-business exchange technology as well.
eReinsure.com's namesake online negotiation and trading platform is intended to reduce costs and provide broader and easier access into the reinsurance marketplace by enabling users to communicate, collaborate, review and manage risks; provide insurance quotes; and archive documents. The platform auto matically tracks each element of the transaction, removing any future uncertainty regarding the agreement reached by the parties involved, said officials of the Salt Lake City company.
eReinsure is due later this year.
eReinsure.com also will operate as an ASP later this year, providing technology and decision-support tools that will assist underwriters in analysing reinsurance risks. Chubb, of Warren, which has invested in eReinsure, is beta testing the eReinsure platform but hasn't run active transactions through it yet.
"We're figuring out from a process standpoint where [eReinsure] actually fits inâ€"the best places, the technol ogy requirements and integrating it into [Chubb's] manual process," said Jon Bidwell, senior vice president of Chubb. "The pure technology piece is the easy part. The challenge is to integrate the technology into the current workflows and office processes."
Bidwell said the current way of doing businessâ€"via phone, paper, fax and email with documents attachedâ€"is "clunky ... duplicative and inefficient," especially in regard to accessing a reinsurer.
InsureHiTech.com and similar platforms, such as ebix.com, may be better suited for smaller agencies, brokers and carriers, some say. State Farm Insurance, of Bloomington, decided it wanted something simpler and so built an internal, Web-based infrastructure to serve its 16,000 agents.
"It's an interesting business model, but the bidding process may be too complex and time-consuming for most brokers and agents to seriously adopt this kind of format at this point," said Bob Reiner, enterprise Internet services manager at State Farm. "Sure, there's some validity there, [but] until the tech nol ogy matures, it may not be worth our while."
Of eReinsure and reinsurance in general, Reiner said B2B platforms are enticing because insurance companies could do things at an exponential rate, cut through paper clutter and reduce costs. "It holds some promise once the technology becomes ubiquitous," Reiner said. "It's not all there yet, but it's getting there. Some companies are more savvy than others." ´bob dayBidwell: Chubb is working to find the best way to fit eReinsure into its workflow.
