Proponents of a planned online insurance exchange say the platform isn't meant to be a new way of conducting insurance business, but rather an up-to-date tool to conduct insurance business more effectively.

“This is not an effort to change distribution. This is an effort to enhance distribution,” said Ken A. Crerar, president of the Washington-based Council of Insurance Agents & Brokers, which is partnering with LexisNexis Risk Solutions to create the Web-based exchange.

The exchange will serve as “a platform that helps facilitate the workflow and efficiency” of business between agents and brokers and insurers, said Peter Lynch, senior vp at LexisNexis.

Mr. Crerar said the move comes from an industry need to move data more effectively, efficiently and accurately. “The need's been there for years,” he said. He acknowledged, though, that the CIAB/LexisNexis effort isn't the first attempt to create such a vehicle.

“There have been numerous attempts over the last 15 years to sort of look at an exchange system, which is nothing more than streamlining the existing business process,” Mr. Crerar said.

Much of that technology will be provided by Bedford, Mass.-based insurance software solutions provider FirstBest Systems Inc. “At the heart of what we'll be bringing to the story is bringing the collaborative approach to this entire process,” said FirstBest CEO John Belizaire.

Among the exchange's key principles are neutrality—that it be open to all participants—transparency and a commitment to using Assn. for Cooperative Operations Research and Development standards. A new Insurance Exchange Trust will be charged with holding the exchange to its core principles and protecting its data.

“The Insurance Exchange Trust is really what will make this all happen,” Mr. Crerar said, noting that trustees will be “representative of the industry” and include broker and insurer representatives, as well as outside members.

Mr. Lynch said the exchange's developers are meeting with insurers and brokers as they gather requirements and develop software. “We've gotten tremendous interest from them,” he said.

“We don't view this as just a broker benefit. There's significant benefit to the carrier,” Mr. Lynch said, citing improved submission efficiency and accuracy as well as the market and exposure data that can be gathered.

“That type of data isn't available anywhere right now,” Mr. Lynch said. “By putting this type of workflow through an exchange, we'll be able to capture a lot of that data.”

“This is an effort that has been a collaborative effort in the industry,” Mr. Crerar said. “We want the involvement of all the players in the industry and we would think they would be supportive.”

The effort is intended to reduce the amount of time agents and brokers must devote to executing insurance transactions. “What this effort will do is make brokers better brokers. It will let them spend more of their time doing what brokers should do,” Mr. Crerar said.

“I think it will make the carriers better carriers” by giving them better information, he added. “And ultimately, the customer is better covered.”

Eric Andersen, CEO U.S. retail at Aon Risk Services in New York, said efficiency will be critical to the exchange's success.

Though large companies' insurance programs often involve heavily manuscripted contracts, such an exchange could appeal to small- and middle-market business, he said. “An ability to drive more consistency, the ability to use single applications, more standardized language I think is a big benefit,” Mr. Andersen said.

“Anything that makes the transaction more efficient we are hugely in favor of,” he said. “The more efficient you could make it, the more we can invest in data and the things we're really providing.”

Mr. Andersen noted that several insurers already are creating their own online platforms, though that has its own issues for brokers. “The reality is, many of the markets are trying to build out online access,” he said. “But they don't necessarily talk. So if you're a broker, you have to go through five platforms.” An exchange potentially could address that issue.

Greg Ricker, chief information officer of Strickland Insurance Group in Goldsboro, N.C., and co-chair of the American Assn. of Managing General Agents' automation and technology committee, said his group is trying to learn more about the CIAB/LexisNexis plan.

He noted the AAMGA has been working with the National Assn. of Professional Surplus Lines Offices Ltd. and the Agents Council for Technology of the Independent Insurance Agents & Brokers of America on their automation efforts. “Several years ago, we all decided let's not splinter our efforts,” Mr. Ricker said.

The AAMGA's annual Automation Conference this month will include a presentation on the CIAB/LexisNexis exchange so both sides can learn whether and how they might work together.

“They're looking forward to learning about what we're doing, what some of our goals are and what some of our deliverables are; and, at the same time, we're looking forward to hearing the same thing from them,” Mr. Ricker said. “It ought to be some good discussion.”

He said the CIAB has offered to include NAPSLO, the Big I and the AAMGA on the Insurance Exchange Trust board.

LexisNexis' Mr. Lynch described the timeline for the insurance exchange as “pretty aggressive,” with plans for an “early adapter” program running by October, with a full launch by January 2011.

FirstBest's Mr. Belizaire noted that pilot efforts will focus on lines of business and types of customers “that we really feel will get the most return. We don't want to throw a lot at them all at once.”

“We'll be coming out with the midmarket commercial lines out of the gate,” Mr. Lynch said. “But we're targeting all the commercial lines, even personal lines and benefits, ultimately.”