Canadian Underwriter

The “Multi-Sport” Rack Option

February 1, 2004   by Kevin Campbell

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Insurance companies create business websites with one goal in mind – to increase productivity for themselves and their brokers. But are these sites using the latest technology to achieve that goal? The answer, at least for many commercial brokers, is “no”. And, the results may be far more damaging than most insurers realize.

Here is typically what happens when a company builds a proprietary website with quoting services for commercial lines. A broker clicks on to the website, punches in underwriting and coverage information, obtains a quote and then has to transfer that information to his/her own system. As brokers market risks to multiple companies, this same process is repeated several times, with multiple data entry. How is this progress? In fact, offering this kind of service raises the same training issues as setting up a dedicated mainframe terminal in the broker’s office – an experiment that most companies abandoned several years ago.

While a quick web quoting feature often makes less automated brokers happy, it does a disservice to progressive brokers who have invested in automating their commercial lines business, either by using their broker management system or by investing in a sophisticated commercial management system. This has become a growing problem for those brokers who are using advanced capabilities in their management systems to streamline their commercial operations. In short, insurers run the risk of alienating their most productive business partners.

However, there are proven technology solutions that can help insurers bridge this gap and meet the diverse needs of today’s brokers. “Web services” is the next evolution of business-to-business (B2B) technology. According to a Forrester Research survey done toward the end of last year, 57% of companies interviewed plan to use web services in 2004. While web services applications are prevalent in other industries, such as auto manufacturing, airline reservations and financial services (i.e., “e-trading”), they are just emerging in the property and casualty insurance industry.


The prime requirement of utilizing web services applications is that insurers have to change how they build and design their websites. This starts with one simple architectural decision – to use web services in conjunction with a well-structured XML document.

Most insurer websites are bound tightly to databases and business rules. These are known as “closed systems” because their only interface is a web browser. What if brokers want to send data directly from their own management systems? The short answer is they cannot. If companies properly use web services together with XML documents, the web browser becomes just one of several ways for brokers to interact with data and business rules.

Think of it like a vehicle roof rack for sports equipment. The traditional design for a website is like a “ski rack”. You can haul skis, but that is about it. If you want to bring along a bike or extra luggage, you are out of luck. A web services approach, however, is comparable to a multi-sport roof rack system. Some manufacturers have developed racks that allow you to mix and match skis, bikes, luggage carriers and so on. A properly designed website should do the same kind of thing – handle data requests or quote submissions irrespective of whether the broker wants to use a web browser or transfer data electronically from a management system.

Most insurers are not at this stage – at least not yet. Companies should be dedicating far more time and resources to the architecture of their websites. With web services and XML documents, the upfront development costs may be higher, but long-term maintenance expenses will be lower and the portal will be more amenable to future changes. This includes opening the door to data transfer to and from broker systems.

Another benefit of a properly designed web services application is the ability to stage implementation by automating manual processes one step at a time. And most companies right now need to take a step-by-step approach. The first step is to research developments in web services and XML documents, instead of simply creating a proprietary website “rating engine.” Then the layers of automation can be built around a company’s comfort level.


For insurers considering a move to web services, here are some tips:

Focus first on business integration. Much of the B2B technology of the late 1990s over-promised and under-delivered. In some cases, the technology simply was not ready. In the past four years, business integration technology has matured in the form of web services and XML documents. Many companies in other industries have used the technology successfully.

Solve clear business problems. Ask brokers what their biggest hassles are in dealing with your company. The higher a problem’s visibility, the greater the likelihood that brokers will use your web service, rather than a proprietary connection or existing manual.

Make your partners more productive. Insurers know who their best brokers are. Why not enhance their productivity (and your results)? The best web services will give time and flexibility back to brokers, creating convenient access and faster turnaround.

Allow for diversity of broker needs. Ensure your web services application can be used without modification by many partners. Instead of building a service to one broker’s requirements and then customizing it for every other broker, do the research upfront. Spend time with brokers from different sizes and levels of automation to understand the data and processes they need.

Master the art of the reusable business document. To build business web services, insurers should begin by asking what the broker needs – and then cross-check the data, process and workflows to create a service flexible enough to accommodate at least 80% of requests. Properly structured XML documents are a critical link in this chain. Companies have to ensure that the service is described in brokers’ business terms, carries the information needed to process a request or quote and is designed for exception handling.

Give your best brokers value added services. By giving your best broker partners power over an application query, quote or eligibility check, you encourage them to use this high-efficiency electronic channel. You can also find out quickly where any service logjams are or what services are most popular.

Following these steps will help insurers avoid the risks of broker frustration and misplaced investments. When insurers rush to build proprietary websites for commercial quoting, they inadvertently make life more difficult for their most progressive brokers. Web services and XML documents represent a more flexible and functional solution. It is time for insurers to now take a second look at how their web portals interact with their preferred broker partners. They can take advantage of the technology available to write the kind of business they want, or they can wait for competitors to capture the attention of their largest brokers.