Message for the Masses.

A system that wilt allow agents to input information once and receive multiple real-time quotes from various carriers is gaining support.

The movement to provide independent agents with multiple-company, real-time rate processing is building momentum. More insurers are climbing on the bandwagon, agents are mounting a grassroots effort to pressure other carriers to join in, and insurance organizations are forging new alliances aimed at consolidating the industry's communication infrastructure.

In the past few months alone, a growing number of insurers have signed on with agency-automation vendors to allow independent agents to submit a single application to multiple insurers and receive firm rates in seconds. Nevertheless, agents are concerned that insurers investing heavily in building proprietary interfaces on the Internet may become less receptive to open systems.

Agents have been clamoring for single-entry, multiple-company interface, or SEMCI, for more than two decades, and now many feel they are close to reaching their goal. SEMCI would allow agents to enter information into a system once, submit a coverage request to several insurers and receive quotes back quickly. It's a way to easily transfer data between disparate systems, allowing insurers and agents to transact business electronically, therefore increasing productivity while reducing cost. Proponents also say SEMCI's benefits can include streamlined and consistent workflow; increased profits; fewer errors when entering information; integration with commercial and personal lines; elimination of duplicate entries; and real-time or batch-mode transmission.

A Fortuitous Partnership

One of the biggest boosts toward achieving this uniform electronic format came in October when Ivans Inc., the industry network for conducting business electronically, teamed with Applied Systems Inc., a leading automation solutions provider for the property/casualty industry, to deliver a new industry communication infrastructure that is designed to link all the players in the insurance transaction.

"This brings a final missing piece to the puzzle," said Peter T. Anderson, president of Anderson Insurance Services Inc., Marshfield, Mass., and vice president of the Applied Systems Client Network, known as ASCNet. "Up to now, vendors were going off in their own directions. Now with a neutral, third-party source--and no one is more respected in the industry than Ivans--it's truly a winning situation. We're going to see a lot of exciting developments in the next several months."

Although this and other recent developments have bolstered agents' optimism, widespread acceptance of SEMCI is not yet a sure thing. Many point out that if this solution is to work, it must be embraced by multiple carriers.

"Companies have to play; they have to make an investment," said Joseph Gauches, who is responsible for e-business in the property/casualty companies at Hartford Financial Services Group Inc., Hartford, Conn. "We believe that this is the model of the future. Whether we get universal support for that is still unknown."

Getting Warped

Hartford has pioneered SFMCI processing for its agency partners since 1997, when it became the first insurer to introduce commercial SEMCI as a batch upload-download operation. Last summer, Hartford was one of four companies that began implementing Applied Systems' Warp Central, a translation engine that allows for real-time processing of insurance transactions. The other three companies that are "Warp-enabled" are Heritage Mutual Group, Sheboygan, Wis.; Safeco Insurance Cos., Seattle; and Travelers Property Casualty, Hartford, Conn.

Warp Central essentially translates information from agency-management systems into a universal language that can be translated into the language used by an insurance company's mainframe. Warp allows the agent to key in the applicant's information once, select the carriers to be quoted and receive real-time quotes directly from the carriers. Then agents can download the information into their agency-management system, and eventually the system would allow them to issue and print a policy.

Warp delivers firm rates--as opposed to changeable rate quotes-- in real time for business owners policies and commercial auto. The system uses XML standards developed by Acord, the insurance industry standards organization. XML, or extensible markup language, is a standard computer language that allows users to create tags for each piece of information on a Web page. It is the catalyst for single-entry, multiple-company interface.

Real-Time Quotes

Since May, Hartford has been conducting its SEMCI pilot program in small-commercial lines policies with The Mahoney Agency of Casa Grande, Ariz., the largest independent agency in that state. Mahoney's business is 80% commercial lines, and the rest is personal lines, benefits and financial services, said Zebra Keck, the agency's personal lines manager.

"We're able to see instant quotes right from the desktops, usually within 10 seconds," Keck said of the pilot program. "This is wonderful. It's pretty amazing to get quotes back that fast."

If there are errors in the application process, the system prompts the agent to go back and correct them, saving valuable time. Policies can be quoted with multiple carriers in a matter of seconds, Keck added, saving the agency considerable handling costs. "Once other carriers come on board," she said, "we'll have a comparative rating in our system, through one single entry."

Hartford is expanding this pilot to 15 more agencies. Still, the limited number of carriers able to process applications in real time means most agents are not yet seeing the major benefits of SEMCI, Gauches said. "There's a lot of research going on but not a lot of implementation," he said.

Hartford's executives have encouraged officials from other insurance companies to move in this direction for the good of the industry. Some, including Travelers, have "the same targets we do," Gauches added.

Travelers Insurance made SEMCI technology available to its agents using Applied System's Warp-enabled Win-TAM software beginning in the third quarter of this year, starting with its MasterPac business owners policy and workers' compensation. Plans are to roll out the software to the rest of its small-commercial lines business over the next several quarters.

Brian MacLean, head of the small-business insurance area for Travelers, noted that in recent months, Travelers has rolled out a new Web-enabled version of its proprietary system. The company piloted this with 100 agencies and is now implementing the system with 3,000 agents.

At the same time, Travelers has intensified its work this year with Applied Systems to introduce SEMCI technology. "Currently we're in a pilot with a few agents," MacLean said. "This is intended to be a small-commercial lines capability. While personal lines has had this with agents getting multiple quotes in real time, this has not been happening in the small-commercial world."

He added that some skeptics think the entire industry will never embrace SEMCI. "But the capability is now out there. There's huge advantage to the workflow in agencies," MacLean said. "It helps agents get out of the processing world and into the selling world. The feedback we're getting from agents is overwhelming.

"For us, the advantage is that we believe this is the way the industry is going to go," MacLean said.

The Tide Turns

While only a few carriers are currently SEMCI-enabled, MacLean feels the tide will soon turn. "As we demonstrate that this technology really works, more and more independent agents are really going to put pressure on insurance carriers."

That's already happening, said ASCNet's Anderson and Dana Nulty-Beals, of The Nulty Agency Inc., Kalamazoo, Mich., and ASCNet's new president.

"I know a number of agents now who are drawing a line in the sand with carriers," Anderson said. "They tell them they want a SEMCI solution or they'll move their book. It's a pretty brazen act, but these markets are important."

In his own case, Anderson said he has reworked his book of business, keeping in mind those companies that show him the future with SEMCI. In the case of one carrier that has not, he has told the company that he cannot continue dealing with its online proprietary system, he said.

"This is probably going to happen in my own office," said Nulty-Beals, who noted that carriers are still trying to force her to work with their proprietary systems. "I'm always protective of my book of business. By trying to force this, these companies are making me make a hard decision that otherwise I wouldn't make."

Taking SEMCI on Tour

To foster its stand, ASCNet is contemplating a bus tour of the New England states and New York early next year. Nulty-Beals, Anderson and other officers of ASCNet will visit companies to promote SEMCI. They also will encourage agents to tell the companies they represent that they don't like proprietary systems.

"You will see the ASCNet group continuing to focus on SEMCI, getting the message Out to more and more companies," Nulty-Beals said. "We're also trying to educate every agent, because there are lots of agents who don't understand this yet."

Meanwhile, the Independent Insurance Agents of America has been contacting 800 insurance CEOs through company-agent councils and is conducting a research project to quantify the savings associated with SEMCI. And user groups for AMS Services' agency-management system are talking with AMS about better ways of working together on product development, said Bev Coats, the group's president.

"Agents must also begin working directly with their carriers in determining future direction," Coats said in an Acord press release. "There are many carriers who are providing Internet solutions today but they are still proprietary. We need to work with carriers who are willing to involve agents in their business-planning process."

Coats' group as well as other user groups said they wanted to encourage consistent implementation of Acord standards by vendors and carriers alike and to avoid company-unique solutions that result in inefficient work flows for agencies. These user groups represent between 20,000 and 30,000 agencies, which in turn often represent a significant amount of written premium to a single carrier, the organization said.

With this groundswell of support from major insurers and agents' organizations, Gauches predicts that SEMCI will achieve industrywide acceptance within 18 months.

On one hand, he noted, many large insurers, including Hartford, have a huge amount of investment tied up in their legacy systems "and they all work," Gauches said. "Luckily, technology today allows us to modify the old systems to fit with the new ones, so companies don't have to toss them out. This opens up the gates for this model to catch on, because it can be done with lower costs than it would take to completely rebuild legacy systems.

"This is opening up and endorsing a new way to do business. The players that are not there are going to have some significant problems," he said.

Before long, Gauches expects Hartford and the other early adopters will have plenty of company. "I welcome it," Gauches said. "There are 2,000 insurance companies in the U.S., and early adopters will drive down this number because of the investment barriers, This is a huge growth opportunity without everyone attacking everyone else at this point." But once SEMCI is embraced by the entire industry, competitive reality will reassert itself, he said, Eventually, only four or five big winners are likely to be vying for the lion's share of the commercial lines market. "We're not going to have a whole lot of survivors," Gauches said.

The Year of SEMCI

The insurance industry moved closer this year to implementing a uniform electronic format that would allow independent agents to submit applications to multiple carriers. Currently, agents have to reenter data to fit the proprietary computer systems of many insurers.

Some of the developments on this front included:

* An "Elect SEMCI in November" campaign by the Independent Insurance Agents of America. The IIAA asked insurance carriers, technology vendors and others to adopt the Acord XML standards as developed by the industry. XML, short for "extensible markup language," is a standard computer language that allows users to create tags for each piece of information on a Web page. It's the catalyst for single-entry, multiple-company interface--or SFMCI--something long sought by agents who want to be able to enter policy information into a system once, submit a coverage request to several insurers and receive quotes back quickly

A variety of companies and vendors participated in the "election" or demonstration of Acord XML-standard SEMCI at IIAA's 104th annual convention in late October in Orlando, Fla. IIAA represents more than 300,000 agents and agency employees nationwide. Acord, based in Pearl River, N.Y, develops data standards for the financial-services industry in the United States. Its XML efforts include standards for several life and financial-services transactions, and property/casualty lines of business and surety.

* In September, Acord and Canada's Centre for Study of Insurance Operations announced a collaborative effort to reach a single standard for XML in the North American insurance market, thus simplifying cross-border interchange of data between trading partners. The two said that the first goal of the alliance was to develop standards for personal lines transactions. The project is scheduled to be completed in the first half of 2001.

* Also in September, the Agents Council for Technology, an industrywide group of agents, companies and technology providers created by the IIAA, reaffirmed its support for the development and adoption of the Acord XML standards and the SEMCI campaign. The council's reaffirmation came during meetings in Seattle hosted by property/casualty insurer Safeco and Microsoft Corp.

* In June, ASCNet--the only authorized users group for Applied Systems Inc.'s The Agency Manager software-- joined the IIAA to bolster the support for SEMCI. ASCNet, which has a membership of more than 60,000 insurance professionals, began hosting a Web site aimed at informing agents, companies, vendors and others on the advantages of SEMCI.

* That same month, Acord announced that its Large Commercial Accounts Working Group would develop XML-based standards for key lines of business: workers' compensation, business auto, general liability, commercial property and umbrella. Acord said it had called the two-day meeting that preceded the announcement in response to the industry's need for data standards support for large commercial accounts. Attendees included brokers, agents, risk managers, carriers, third-party administrators, reinsurers and insurance-litigation attorneys, as well as other standards organizations. All parties agreed on the importance of creating open standards that can be used by the middle market as well as large commercial accounts, Acord said.