e-Business Moving Slowly but Steadily in Wholesale Marketplace

The insurance industry is beginning to utilize technology to more efficiently conduct business, but that integration is a long, slow process, according to a panel of wholesalers and market leaders.

Shand Morahan & Company Inc. recently hosted a live teleconference to discuss “e-Business in the Wholesale Marketplace.” Among the industry representatives were Tom McNally, e-business marketing, Shand Morahan & Co. in Deerfield, Ill.; Gail Strejc, marketing, Shand; Kevin Kershisnik, AVP, ECM Insurance Services LLC in Irvine, Calif.; Mitch Dunford, associate publisher/web, Insurance Journal in San Diego; and Nick Cortezi, CEO, All Risks in Timonium, Md.

All the panelists agreed that getting information to the retail agents as quickly as possible was key. “Speed really sells us as a company, combined with good service,” McNally said.

As a result, e-mail is used more and more frequently to send quotes, but there is still a heavy reliance on the fax machine. In effect, many wholesalers are duplicating their efforts right now—using e-mail to send quotes, but right along with the e-mail, sending a fax. “We send things in e-mail attachments as well as a fax, and half the time, [agents] end up retyping the document rather than cut-and-paste,” Cortezi said.

“It’s a dual system—both a paper and a paperless environment,” Kershisnik agreed. “I don’t see that changing anytime soon, simply because of the nature of the product. Sometimes we just have to go and pull the file.”

Will the concept of SEMCI ever become reality? The panelists were divided on this topic. “We know that SEMCI is coming and we are attuned so that we will be ready when we need to be,” Cortezi said.

Yet, “I don’t know if SEMCI is ever going to happen,” Kershisnik mused. “There is a lot of hype but not a lot of substance…The retail agents want to hear that they can just send an application once and be done, but the insurers are far behind the financial service providers as far as technology.”

According to Dunford, XML is the way the future is headed. “There are a number of companies pushing the ASP model with XML,” he said. “Those who use independent agents as their salesforce need to look at how technology meets their needs; so that if a number of agency management systems start coming out using ASP and XML technology, and more and more agents adopt it, those agents will be looking for MGAs and carriers whose software can talk to that. That’s when this whole thing will take off, because when agents start using this technology, SEMCI will take care of itself.”

McNally concurred. “We think [XML] is where the industry’s going, and it’s important that carriers and anyone else involved in the process share the same technology,” he said. “Some companies look at technology as an every-10-year investment—we look at it as an everyday operational cost.”

Cortezi brought up the importance of strategic alliances with tech providers. “We want to establish partnerships with the technology entity—they bring the technology to the relationship, functioning almost as a marriage broker.”

Of course, at the end of the day, “our underwriters are really the secret to our success,” McNally said. “Commodities can be sold online, but the tougher E&S coverages need to be underwritten.”

The wholesalers acknowledged the importance of having a plan in place to deal with the hardening market. “As the market hardens, we will have to focus more on execution than strategy,” Cortezi said. “All that we want to do as wholesalers is be fast, efficient, and monitor what’s coming so that we can be in a position to adjust if we need to.”

One thing is clear: although the marketplace accepts and even welcomes technological advances, “no one is really going to fight to be a leader in technology at this point,” Cortezi said. “Frankly, we’re too busy just keeping up with business.”