The Council of Insurance Agents & Brokers and LexisNexis Partner to Build Insurance Exchange

The Council of Insurance Agents & Brokers (The Council, Washington, D.C.) and LexisNexis (New York) 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, according to the two organizations. 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. The exchange is also intended to provide a single-entry gateway to wholesalers to broaden and provide more efficient access to additional markets.

LexisNexis has developed a technology platform that allows insurance carriers and brokers to track recent trends in insurance product pricing and coverage. The company 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, according to LexisNexis.

"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, in a statement. The insurance exchange will concentrate initially on commercial lines. All sizes and lines of P&C insurance will eventually be supported as will, potentially, other non-P&C implementations (e.g., group benefits), according to the partners. The exchange will leverage the industry standards built by ACORD (Pearl River, N.Y.). 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.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio