is is much easier than sending multiple
encrypted emails to carriers.”
Security has been a top consideration of
the Insurance Exchange from the outset,
according to Lynch. “We understand our
role as an industry player,” he says. “One of
the things we did [to ensure security] was
that we gave up control of the data to the
Some brokers say using the Insurance
Exchange adds a level of security they had
not had with traditional email. “With the
exchange, underwriters get an email with
a link to obtain the submission in a secure
environment, which is a real improve-
ment,” says Crerar.
“More and more large clients
are asking that their proprietary
information be encrypted,” says
Fitch. “The exchange can be a
meaningful standard for that.”
The Insurance Exchange
also adds consistency to the
tion by consolidating risk in-
formation in a central location, a feature
that benefits the audit process as well.
Says Pruett: “Now, there’s a permanent re-
pository of all the communication between
producer and carrier.”
From a technology standpoint, some re-
maining bugs being worked through include
in-progress integration between agency-
management systems. Among leading ven-
dors, Vertafore and Nexsure report real-time
upload with the Insurance Exchange, while
Applied Systems, which has in the past
considered the exchange as a competitor,
did not provide information regarding any
integration capability. Additionally, using
an integrated platform is no guarantee that
integration has been enabled at a particular
agency by default.
“As the upload feature between our
agency-management system and LexisNexis is still not operational, we cannot
enjoy the potential benefits of this feature,” said Forkner of MHBT, which uses
Vertafore’s Sagitta platform.
Brian D. Bartosh, president of Top O’
Michigan Insurance Agency Inc., says the
“Insurance Exchange” hasn’t quite lived
up to its name.
“Right now, most of the carriers getting [an exchange submission] can see the
information, but they need to extract it,”
he says. “It’s an application exchange, but
not a data exchange.
“Some of the things that are nice are the
way [the system] puts the submission together and allows us to track submissions,
but we use our agency-management system [Applied’s TAM] for that,” he explains.
“The LexisNexis solution, the way it was
presented, is that you can present submissions to carriers, and they don’t have to be
RIGHT NOW, most of the carriers
getting [an exchange submission] can
see the information, but they need to
extract it. It’s an application exchange,
but not a data exchange.”
Brian D. Bartosh, president of
Top O’ Michigan Insurance Agency Inc.
members. But once they do that, it creates
a ‘super PDF.’ We felt it was too disconnected from the process.”
But brokers report that the biggest obstacle
to greater adoption of the exchange is the
reluctance of carriers. Although any insur-
er can receive data via email through the
exchange, whether they will is a different
story. “In the beginning, some carriers told
their underwriters not to accept it, but we
don’t have that situation anymore,” says
Pruett. “No carrier is fully bucking us.”
“This is an industry that can always find
reasons not to do something,” adds Crerar.
“There are no real impediments [to the In-
surance Exchange] other than will and fear.”
“Carriers need to get over their mental-
ity that brokers are going to go to a bunch
of different Web sites,” says Henry, adding
that he has contacted all MHBT’s carriers
about being Insurance Exchange members.
“I’ve said, ‘You are going to put yourself at
a disadvantage compared to other carriers
that are cooperating,’” he explains.
Rather than worry about being “spread-
sheeted,” carriers should look to the ad-
vantages of the system, its proponents
say. “It comes down to self-interest,” Fitch
explains. “The exchange positions us in
the industry where we might not have
been positioned elsewhere because we
have a product in midmarket commercial
lines that some of the bigger brokers and
agents would not [otherwise see]. This
puts us on [their] radar.”
Fitch points to the exchange’s Market
Finder feature, with which brokers can
gauge State Auto’s appetite for a particular
account before sending an application, and
the insurer can disseminate
new information more quickly.
“It allows us to do that differ-
entiation and marketing at the
speed of light rather than rely
on sending reps into the field,”
Additionally, future development is planned. “We’re
starting to aggressively go after
all the brokers and agents out there, and as
we do that we will be adding capabilities
to the system,” says Crerar. That includes
expanding the system to multiparty transactions, such as larger and more complex
commercial lines, as well as small commercial and personal lines.
Time will tell if this effort will ultimately succeed where others have failed.
But while current usage may be less than
hoped for, proponents point out that the
adoption curve is steady.
“Thought leaders in this market are
very supportive and believe it has to happen, and users [of the exchange] have high
satisfaction,” says Lynch. NU
BB&T Insurance, one of the early adopters
of the Insurance Exchange, conducted an
evaluation this past March to determine
whether to expand its use nationally or
stop using it altogether. Digital subscribers
can CLICK to find out what they decided—
and the resulting impact on carriers.
November 7, 2011 | National Underwriter Property & Casualty | 25