NEW YORK—Establishing an online insurance exchange will aid risk managers by increasing efficiency and quality of data, according to people involved in the project.

Sixteen insurance brokerages have joined the LexisNexis Insurance Exchange, LexisNexis Risk Solutions said last week. The exchange, which was announced earlier this year, is designed to enhance the flow of application data among insurance agents, brokers and insurers (BI, March 1). The exchange was established by an alliance of LexisNexis Risk Solutions, the Council of Insurance Agents & Brokers and intellectual property development company Marketcore Inc.

The brokers are part of an early adopter program that is to launch Oct. 11. An industrywide launch is slated for the second quarter of next year.

The online exchange is designed to enhance efficiency and reduce errors and redundancy in placing insurance, said Peter Lynch, president of the New York-based LexisNexis Insurance Exchange. “Brokers will be better brokers,” he said.

“We're not trying to change the world,” said Mr. Lynch. “We're creating efficiency in a system that already worked.” Greater efficiency will allow brokers to “spend more time with risk managers and understand the risks,” he said.

“Probably the most important thing for the buyers: I think there will be significant improvement in quality over the long haul,” said Ken Crerar, president of the CIAB. “That's the critical piece for this. One of the quality challenges the industry has is the number of handoffs that happen because of the lack of technology and a single entry system.”

Mr. Crerar noted that the industry has struggled for decades to set up such a system, and the new exchange will build on accomplishments of previous years.

“It's taking some of the noise out of the system,” Mr. Crerar said. “It's a utility platform. Your name isn't going to get misspelled. The system is going to work more quickly. It's intended to change the work flow in the backroom to ensure quality.”

According to the exchange, brokerages participating in the early adopter program are AmWINS Group Inc.; Brown & Brown Inc.; BB&T Insurance Services Inc.; John L. Wortham & Son L.P.; BancorpSouth Insurance Services Inc.; Rutherfoord/Marsh & McLennan Agency L.L.C.; Edgewood Partners Insurance Center; Van Gilder Insurance Corp.; McQueary Henry Bowles Troy L.L.P.; Riggs, Counselman, Michaels & Downes Inc.; Sterling & Sterling Inc.; M3 Insurance Solutions Inc.; Early, Cassidy & Schilling Inc.; Roach Howard Smith & Barton; Oswald Cos.; and Cook, Hall & Hyde Inc.