A type of SEMCI (single-entry, multiple-company interface) will become a minimum standard for insurers and independent agents, minimizing the ability of insurers to use their proprietary data collection differences as an advantage, the report said.

"Commercial insurers are spending lots of money trying to automate a system that for years has been dominated by trained underwriting professionals, and those ranks are thinning," said Michael Weinstein, director of research at Conning. "While insurers do not identify a pending underwriter shortage as reason for pursuing automation, we expect that the current workforce of front-line underwriters will have a much smaller number of replacements when they retire or otherwise leave these positions."

According to Conning, commercial underwriting will become more and more reliant on automation for the entire policy life-cycle. "Inevitably, an insurer's failure to respond to agents rapidly and reliably could soon disqualify it from the standard marketplace," the researcher said.

"Agents are under tremendous pressures to streamline services to the commercial insurance customers," said Mr. Weinstein. "While the insurer has experienced early success with front-end underwriting software to create a competitive advantage, in the future they will really need to focus on the speed and quality of their automated response to the standardizing of the underwriting process.

"The move to SEMCI will force an averaging of data requirements", he continued. "Product differentiation will no longer live at the front-end of the process. Success will be dependent upon information-gathering and back-end-supported analyses driving sophisticated pricing models."

The study is available from Conning Research & Consulting Inc. by calling (888) 707-1177 or (860) 520-1521. More information is available at the company's Web site at www.conningresearch.com.

Conning provides both public and proprietary research as well as consulting services to the financial services industry.