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The LexisNexis® Insurance Exchange: Ready for Prime Time

Featuring Frank X. Sentner, Director of Strategic Technology, The Council of Insurance Agents & Brokers

Posted on 21 Jul 10

This week in “Face Time”, we spoke with Frank Sentner, Director of Strategic Technology for The Council of Insurance Agents & Brokers (The Council) about the organization’s partnership with LexisNexis® and the creation of the LexisNexis® Insurance Exchange, a single-entry collaborative insurance placement platform designed to improve and enhance the flow of application data and documents between agents/brokers and wholesalers and carriers.

Headquartered in Washington, D.C, The Council is the premier association for commercial insurance and employee benefits, providing members with industry intelligence and a variety of educational opportunities. Council members annually place 80% of all commercial Property/Casualty premiums in the U.S. and administer billions of dollars of employee benefits accounts. LexisNexis® is a provider of industry-leading data, technology, analytics, and workflow solutions to the insurance industry.

Frank has been Director of Strategic Technology for The Council since1997. He consults with insurance agencies and carriers, agency management system vendors, and other software vendors. He is frequently interviewed by the news media on technology issues affecting the insurance industry.

Annie George (AG): Frank, the idea of an Insurance Exchange has been on the table for many years and now with LexisNexis®, The Council, and other key industry players, it’s a reality. Before we go into how the Exchange works and its launch, please give us a brief overview of how we’ve finally arrived here.

Frank Sentner (FS):
“For as long as I have been involved in the industry, the goal of streamlining the communication of data and documents between agents and brokers and carriers has been the holy grail. Some of the initiatives around this issue have spawned companies such as ACORD, ACT, IVANS, and others. In 1997, Ken Crear, President of The Council, asked me to join the organization in an consultative capacity to look at the opportunities and threats coming from the technology sector and what impact they would have on Council member firms and, in a broader sense, the industry as whole.

“One of the issues on the horizon back then was the emergence of carrier web portals through which insurers expected agents and brokers to conduct business. This seemed to be an updated version of the days when an agency or brokerage had several carrier terminals lined up in the office for customer service reps to enter information into the various systems for submissions. Now instead of having all these physical machines, we were seeing the need to go to various websites and key in the same information over and over for each market. The more things change, the more they remain the same.

“For many years, I have done consulting with carriers in an effort to implement standards and create integration technology systems that would at least allow agents and brokers to easily move data from their systems into those proprietary websites. Even if this had been completely successful, it would have addressed only a fraction of the inefficiencies the Exchange addresses. Unfortunately, in most cases the carriers chose to focus on other priorities rather than develop real-time data integration for their agents and brokers. Various industry studies have indicated that agents and brokers submit business to half as many markets because of the costs involved in learning as well as re-keying information from one web portal to the next. In the long run this is not beneficial to the industry. Agents and brokers are constrained from offering their clients, the ultimate insureds, the broadest choice of insurance products and half the carriers potentially involved do not have an opportunity to review submissions and offer their solutions.

“Ken and I continued to keep our pulse on the market, and we brought numerous technologies to the Council board to review to determine their viability. The most recent effort, a bit over two years ago, included the Council, ChoicePoint and some other key partners but this opportunity unraveled in 2008 when ChoicePoint was acquired by LexisNexis®.

“Fortunately, the idea of the Exchange survived within LexisNexis®, who did their own due diligence and decided that they wanted to proceed with building the Insurance Exchange with the guidance of The Council to ensure that the solution would be beneficial to the insurance industry as a whole.”

LexisNexis® in purchasing ChoicePoint was already providing numerous solutions to the insurance industry in a variety of areas, including a contributory personal lines claims history database called C.L.U.E. (Comprehensive Loss Underwriting Exchange). LexisNexis® is in the process of developing Commercial Lines offerings including a claims history database, which should be released in a year or so. Developing an Insurance Exchange was in line with its services and business strategy.

AG: How did The Council proceed with LexisNexis® to make the Exchange work?

FS: “As partners, LexisNexis® and The Council have created an entity to oversee the LexisNexis Insurance Exchange called The Insurance Exchange Trust. The Board of Trustees is comprised of agency, broker, and carrier CEOs and it is not limited to Council member firms, as both the IIABA, Assurex Global, and ACORD will be represented. The Trust will include broker advisory and carrier advisory committees whose purpose will be to guide LexisNexis® in the creation and operation of the Insurance Exchange. The Insurance Exchange will be open to every agent, broker, carrier, wholesaler, and vendor; data integration utilizing ACORD standards will be supported with any technology platform; transparency is guaranteed by the right to retain outside auditors; and The Trust will also advise LexisNexis® on pricing. Everyone involved is vested financially so that the effort being made is not skewed toward any one side.

“Another key point is that the data belongs to the participants who submit it; it’s a contributory database so participants can pull out any time they want and their data must be removed. LexisNexis® has the rights to derivative work for comparative analytics and benchmarking for the industry but the data has to be anonymous and aggregated.”

AG: How does the LexisNexis® Exchange work?

FS: “An agent can upload new business or renewal information from his agency management system for submission onto the Exchange. The system will pre-select the appropriate ACORD E-forms and pre-populate them with the data from your agency management system. You also have the ability to attach any other documents you may have on your system, such as spreadsheets, Word documents, PDFs, etc. The Exchange then gives the agent/broker the ability to select their carrier recipients – these are individual underwriters to whom you’re submitting the business. If those underwriters are already on the Exchange with an email address, you simply select them. If they are not part of the Exchange, you simply add them. You’re only required to add the email address and first/last name. So from day one, you have 100% of your markets on-line – as long as you have an appointment or an open brokerage agreement with the carrier(s) or wholesaler(s) and you have their email addresses.”

AG: What about those carriers that have not subscribed to the Insurance Exchange?

FS: “All markets are part of the Insurance Exchange since they will be getting submissions via email. They may not be paying subscribers, but they’ll be receiving submissions through the Exchange. Each will have a link, an invitation from the broker to an individual at the carrier. When the underwriters receive the emails and it’s the very first time, they will be linked to their profile, which will only include their first/last name, company name, and email address. They then have the ability to flesh out the profile if they want, with login/password information being mandatory. They will be given access to their submissions from those broker invitations. They then have the ability to download any documents that are part of those submissions.”

AG: Since the carrier has the ability to receive submissions and upload proposals onto the Exchange, why pay to be a member?

“For several very good reasons: First, the Exchange includes a built-in rules engine… carriers that are paying subscribers will have the ability to include their underwriting and appetite guidelines in the rules engine. Submissions can therefore be pre-screened using the carrier’s appetite and underwriting guidelines. Second, carriers have the ability to include custom forms (applications, supplements, coverages) on the Exchange. If they are a subscriber and their forms are on-line and coded as E-forms, all the data that’s common to existing ACORD forms will automatically get pre-filled into their custom forms. They will be much easier to do business with than a non-subscriber. All a broker then has to do is complete the data that’s not common, streamlining the entire process.

“And, most importantly, carriers will have access to valuable operational data and industry data. Because agents, brokers, and carriers will be collaborating, they’ll have information about the timeliness and response effectiveness of both agent/broker participants and carrier participants. For example, we can measure response times, submit and success rates based on multiple criteria, such as appetite profiles, information requirements, and or responsiveness.

“We believe that these three benefits, coupled with the fact that agents and brokers will be on this platform using it as their preferred means of submitting business, will encourage carriers to join.”

AG: “What are the key benefits to Agents and Brokers of the Exchange, in addition to reducing data entry workload?”

FS: “The most important thing obviously from the agent/broker perspective is getting business written. We believe a combination of data scrubbing, streamlined workflow, improved collaboration, faster turnaround on everyone’s behalf, and better targeted submissions is going to result in more new business and increased retention for those on the Exchange. Agents will have additional time to spend doing more sophisticated analysis for their clients.

“What’s more, agents and brokers will have a system in place that facilitates the creation of a stewardship or compliance report in the event they need to produce one. Today agents and brokers have information history on submissions made in various formats: in their email systems, in their agency management systems, on their network, in an imaging system, and sprinkled throughout the carrier website portals they’re required to use. If they’re called upon to produce a stewardship or compliance report indicating everything they’ve done to place a piece of business, the forensic requirements of reconstructing what was performed are nearly impossible. The Exchange will facilitate the process and provide a central location where the history of a submission can be easily reproduced.”

AG: What is the launch plan for the Exchange?

FS: “LexisNexis® has implemented an Early Adopter Program in which, during the first year, between 16-20 large brokers and agencies will be using the system. They’re limiting the users on the Exchange for each of those brokers to ensure that they can adequately respond during the Early Adopter phase. They want to give the Early Adopters their total attention and support to guarantee success. We want the Early Adopters to say, ‘this is ready for prime time’.

“Based on feedback they have received from the Early Adopter Brokers, LexisNexis® has begun to invite a select group of carriers as Early Adopters as well. As previously noted, brokers can send their submissions via the exchange to all of their markets on day one.”

The Early Adopter Program is set to begin its launch in October of this year. The brokers that have already signed up include: Brown & Brown, BB&T, John L. Wortham & Sons, BancorpSouth Insurance, Rutherfoord, Edgewood Partners, Van Gilder Insurance, McQueary Henry Bowles & Troy, RCM&D, Sterling & Sterling, M3 Insurance, Early Cassidy & Schilling, and Roach Howard Smith & Barton.”

“We’re talking to all the major brokers,” says Frank. “We will have 30-40 ‘Second Wave’ brokers who will be ready for launch in 2011.”

For more information about the LexisNexis® Insurance Exchange, please visit:

About Frank Sentner

Frank has been a consultant to the insurance industry since 1976. In 1996, he founded his current company, Soulware, Ltd., to specialize in technology solutions that improve business process integration between insurance carriers, brokers and agencies. Frank began his insurance technology career working for Insurnet, Inc., as a senior consultant. He founded CISCO Technologies, Inc., in 1984 where he designed and developed the agency management system now known as Sagitta. In 1992, CISCO Technologies merged with the Gemini division of Aetna to form CISGEM, which was acquired by AMS Services in 1995, where Frank was senior vice president of technology.