Net effects

In this e-enabled world of high-flying, high-speed commerce, the focus for many of the major insurance companies is on managing their core business activities so they can be accessed on the web, either by brokers or direct by customers, with the end goal of giving them competitive advantage.

To do this, insurers have had to adapt and modify their existing back office systems so that they are compatible with modern, web and other multi-channel applications. However, many brokers are non-technical and require a solution that can easily and quickly access insurers' data repositories.

The proposed i2i-Link, which was scrapped last year, would have allowed insurers' mainframe systems containing product information, policies and quotes to `talk' to brokers' systems. The beauty was that any insurer and any broker system could communicate.

Core activities
Of course, some insurers run full-cycle electronic data interchange systems (Groupama recently launched motor EDI). These allow broker systems to receive quotes from the insurers. But these are restricted, largely, to motor and, increasingly, household.

So full-cycle EDI is part of the solution. But what insurers want is for more core business activities to be accessed on the web. And the better able they are to do this, the more competitive advantage they will receive.

Before internet access and 24-hour business availability became commonplace, brokers searched for quotes and policies through an extensive list of insurance partners. Most large insurers had an IT system in place that contained customer information, policy details and any other data, which was important for the day-to-day running of the business. These systems are still run from legacy mainframe applications and are extremely reliable, having been designed to hold this type of information. Unfortunately, due to the changing nature of the IT industry, most of these mainframes are incompatible with web browsers and cannot deliver content on to multi-channels such as websites.

This causes a problem for an insurance company, which is looking for the extra customers and revenues associated with working over the web. Therefore, insurers have invested large sums of money into their back-office system, so that it does become web-compliant, meaning that brokers can access the system quickly and sell their policies.

Brokers have similar problems at the moment, but on a smaller scale. Since brokers are the gateway to policies for many members of the public and businesses, it makes sense for them to have quick access to insurer's databases over the internet, but without the added frustrations of difficult log-ins and incompatibility issues clouding the process. What brokers need to ensure, to steal competitive advantage, is that their service is quicker, easier and more comprehensive than the competition.

Brokers use various IT systems to access their databases of policies and customers. Not only this, but brokers are now building links with insurers' systems, such as with Norwich Union's IFA service, so they are able to search databases over the web, looking for the right policies for the customer; if the two can be integrated, so much the better. Many companies can significantly benefit from having one access point for all information, instead of having a range of systems dealing with different processes.

There are many possible options available to brokers. One way is to create an integrated package by building a system using a `down streaming' business package. This software sits between your server and the insurers' systems you'd like to access and allows one system to talk to another. One such system is NetDynamics Application Server.

Portals are also available, created by insurers for brokers to give them a central point of access to search for policies. Although some portals exist, such as Exchange, it is still early days, but uptake has been good for this low-cost option. An industry wide portal, which will be called Emarket, is being developed by IBM for Polaris.

Another option is to connect the two systems by web services from the insurers system, allowing you to implement online insurance claims and other documents using your existing back-end platform. The NU system has these functions. You can integrate these web services into your existing CRM solution, giving ease of use to agents, who can search their own database for internal queries, quickly and simply. By implementing such integration, your agents can also pull quotes from insurer's web-enabled portals.

Help desk
A big issue when deploying web services is availability. Most insurer websites are run on mainframe, AS400 or VT-based applications. Naturally they can be complex and things go wrong. That's when you need an IT help desk.

As far as HR issues are concerned, most modern software packages need little or no specialised training to use them. This means that the cost of deploying a new business process is minimal - for example, if you were to add home insurance to your business offering. It also gives your organisation the opportunity to maximise all revenue streams in its area of business.

The speed in which e-commerce is shaping the way we live is extraordinary, as are the changing dynamics of the insurance industry. The companies that provide quick and easy access to quotes for customers, whether those customers are searching via the phone or online will see great rewards. Financially it's a process of improvement that doesn't come cheap, but the rewards come in time from a growing customer database and increased simplicity when adding more customer offerings.