BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
GOLD COAST, Australia-Founders of the World Insurance Network hope the system will help bring more business to brokers around the world, and Australia's insurance industry will share in those opportunities after receiving access to WIN later this year.
Dennis Mahoney, WIN chairman and deputy chairman/chief executive officer of Aon Group Ltd. in London, told the Australian Reinsurance Forum last month that WIN is the only independent global network in which the world's then six largest brokers, now four, are taking part (BI, Jan. 27).
The network, formed by Alexander & Alexander Services Inc., Aon Group Inc., Johnson & Higgins, Marsh & McLennan Cos. Inc., Sedgwick Group P.L.C. and Willis Corroon Group P.L.C., allows electronic exchange of underwriting and claims information worldwide.
He said insurers and brokers are losing market share to alternative markets and that using WIN to cut costs and compete is a way to secure the industry's future.
"There's nothing new about it; we must give more for less," Mr. Mahoney said. "If we can lower the price, we ought to be able to sell more."
Reinsurance brokers are losing market share through "disintermediation," the trend to use intermediaries less. Reinsurers are "endeavoring to move closer to the original insureds" and to "bring the ultimate risk-taker into a more direct relationship with the risk buyer."
Six U.S. and U.K. insurers are testing WIN, and 12 have signed up to use it, Mr. Mahoney said. WIN allows electronic transfer of documents globally to any participant's computer. Documents can be modified and returned.
Although Mr. Mahoney would not disclose how much the system cost, he said savings of 30% to 40% in transaction costs are expected.
Outlining WIN's plans, Mr. Mahoney reassured those attending the forum that the system will not become obsolete as technology advances. "We're not heading into a technological cul de sac," he said.
But not all Australian reinsurers are praising the network. While they see its advantages for standard transactions-particularly for non-lead reinsurers on a slip, they say face-to-face negotiations still are necessary, particularly for specialized risks.
"The WIN concept will not have as big an impact here as in the London market" because the London market is much bigger and writes more coverage suitable to the network, said Paul L. Williams, deputy managing director of Sydney-based New Cap Reinsurance Corp. Ltd.
"It will clearly reduce the overhead load of reinsurance brokers and, unquestionably, the savings associated with that will be passed on to the clients," he noted, but he added it would not replace personal communications.
He agreed "disintermediation" is a future trend for the whole insurance industry and that the number of players in the process will drop.
"Yes, for commodity-like business that will happen, it will become a principal-to-principal transaction," he said. "But, for us, because of the kind of deals that we do, brokers are very important. They almost perform a backroom-type function for us, and it's on a variable rate cost, rather than a fixed rate cost."
Mr. Williams predicted brokers' business will split between those doing standard transactions and those who may even begin to put capital at risk in specialty transactions.
"Maybe if a reinsurance slip is only placed 90% overnight or over the holidays, the broker may use his balance sheet to hold it until he can off-load it, similar to an investment bank. The big houses will use their balance sheets to differentiate" themselves from other brokers, he noted.
Roger Burn, deputy chairman of Sydney-based Reinsurance Australia Corp. Ltd. and head of the Reinsurance Forum organizing committee, said ReAC is "very much driven by face-to-face negotiations because we lead so much business."
"WIN will have some impact, especially among younger brokers who are more computer-oriented. It will deliver business in greater quantities."
He said WIN is "a long-term tool" to improve efficiencies in the industry but will not become the dominant method of transacting reinsurance business.