Flying High with Web-Based Underwriting

When the British Aviation Insurance Group entered the US market in 2001 with its acquisition of Associated Aviation Underwriters (AAU, Short Hills, NJ), it wanted its US operations to model the operations of its Aeroinsure subsidiary, a London-based aviation insurance company with a Web-based distribution method that handled all interactions with producers.

Unfortunately, AAU's technology was not well suited for the carrier's future plans. The company, now renamed Global Aerospace, needed to upgrade its legacy systems. "We wanted to grow the business, gain efficiencies and improve the services to brokers, but AAU's technology was 10 to 15 years old," says Mark Chapman, group head of information technology for Global Aerospace (Short Hills, NJ). "The older technology didn't suit our high efficiency needs."

Global Aerospace wanted to eliminate re-keying of data and give brokers the ability to quickly go from quote to bind. The first product that the company wanted to automate was light aviation, or basically small personal aircraft. "When someone has a single engine Cessna, they look for the best price in a product and they want it done quickly, much like the way consumers shop for auto insurance," he says. "Brokers want efficiency and we have to provide it."

Global Aerospace mirrored its business model off of the "very successful" Aeroinsure operations, saysChapman. "Aeroinsure had done very well," he says. "Aviation insurance is a very manual and laborious process. We wanted to take aviation insurance out of the stone age and into the twentieth century."

Flying On Autopilot

To provide producers and customers with "modern-day customer service" that was even better than the online offerings of its biggest competitors, including the aviation underwriting unit of AIG, Chapman says that Global Aerospace decided to stay with the vendor that built the Aeroinsure site in the UK.

"We were set on using Wildnet from the beginning," Chapman says of the technology provider that built the Aeroinsure site. Wildnet, an e-commerce service provider with offices in New York and New Orleans, is a division of London-based Benfield Group, a reinsurance intermediary. "When we looked at other suppliers of technology, many offered Web front-ends for older systems. We wanted a completely Web-based system. Wildnet has 27 rating matrices and does all of the underwriting online."

To manage the major upgrade to AAU's systems, in 2001 Global Aerospace developed a three-phase project plan. The first goal was to develop an automated underwriting system for pleasure business (PBonline) that integrates with a back office Microsoft (Redmond, WA) accounting system and Great Plains eEnterprise general ledger and an in-house developed management reporting system.

Wildnet developed an interface from its Web-based system that handles all quoting and underwriting to the back-end accounting systems, Chapman relates. "Wildnet uses XML to link us to our back-end systems," he says, adding that since aviation insurance is a relatively small market, there are no XML standards. "We have passed along our XML standards to ACORD, but as of today, there is not a single approved standard."

The second phase, which launched in February 2002, was to provide producers access to PBonline. "By the end of last year, we had 300 users on the system and that number continues to grow," he says. "There are five other insurers that have online offerings for aviation insurance. We watch what they are doing and compare their functionality to ours."

The third phase is expanding the functionality of Global Aerospace's online offerings to include general aviation insurance. "We are currently developing the general aviation offering and that will be ready later this year," Chapman says.

---------------------------------------

CASE STUDY CLOSEUP

COMPANY:

Global Aerospace, annual premium income over $1 billion, Short Hills, NJ

LINES OF BUSINESS:

General and pleasure aviation insurance

VENDOR/TECHNOLOGY:

Wildnet (New York), Microsoft (Redmond, WA) Great Plains eEnterprise general ledger.

CHALLENGE:

Automate underwriting for pleasure aircraft and general aviation insurance products.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio