Agents may have reason to crack open the champagne. The Council of Insurance Agents & Brokers (CIAB) and LexisNexis yesterday 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 CIAB with the agent/broker community and LexisNexis to ensure all types and sizes of industry participants can utilize the exchange.
"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," says CIAB President Ken Crerar.
LexisNexis Risk Solutions worked with CIAB 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 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 also is intended to provide a single-entry gateway to wholesalers to broaden and provide more efficient access to additional markets.
The insurance exchange will concentrate initially on commercial lines, but plan to eventually support all sizes and lines of P&C insurance as well as, potentially, other non-P&C implementations (e.g., group benefits).
CIAB and LexisNexis will leverage ACORD standards for the exchange, and plan to start pilot programs for selected lines beginning in the summer of 2010, with full production scheduled for early 2011. The 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.
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