LexisNexis and CIAB said the insurance exchange will initially concentrate on commercial lines. All sizes and lines of property and casualty insurance will eventually be supported as will, potentially, other non-property and casualty implementations–citing group benefits as an example.

The exchange will “heavily leverage the industry standards” built by ACORD, the groups noted.

The exchange plans to start pilot programs for selected lines beginning in the summer of 2010, with full production scheduled for early 2011.

The insurance exchange will be supported by a broker-controlled and operated entity called The Insurance Exchange Trust. The purpose of the IET will be to provide a vehicle for agents and brokers to ensure the exchange operates according to its founding principles of fairness, neutrality and protection of data, according to the partners. It also will serve as an advisory board to LexisNexis on exchange issues.

“While this exchange was spearheaded by Council members, make no mistake, it is for the entire industry. Every size and shape firm will benefit from participating,” said CIAB Chair Markham McKnight, president of BancorpSouth.

LexisNexis Risk Solutions worked with CIAB to develop the plan for the new Web-based system, with the goal of “enabling agents and brokers to submit insurance applications in a one-step, real-time process.”

The new exchange solution, CIAB and LexisNexis said, also allows brokers to see insurance product availability, pricing and coverage differences from multiple insurance carriers, enabling them to place business that best matches client needs.

CIAB and LexisNexis said prior to this new exchange, intermediaries had to separately interface with the computer systems of insurance companies, causing a significant amount of redundant work.

They added that the exchange will also provide a single-entry gateway to wholesalers to broaden and provide more efficient access to additional markets.

It was explained that LexisNexis, in creating the system, drew on more than three decades of database and analytics modeling experience.

The technology platform that has been developed, the organizations said, will allow insurance carriers and brokers to track recent trends in insurance product pricing and coverage, in turn helping the industry align itself more rapidly to customer needs.

LexisNexis will also provide risk-related data on a secure basis into the exchange workflows, which will improve underwriting and reduce broker data-entry time, the partners said.

“Our agent/broker members see this exchange as vital to addressing inefficiencies inherent in the multicarrier distribution system that otherwise has worked so well for our industry,” according to CIAB President Ken A. Crerar.

He added that CIAB “worked very closely with LexisNexis to ensure that openness and objectivity were the cornerstones of the exchange. The key to the success of the exchange is trust. Together, we have strived to ensure the new exchange serves the insurance industry as a whole.”

James M. Peck, chief executive officer for LexisNexis Risk Solutions, said, “The enthusiasm of the broker community and the clear opportunity to improve their day-to-day processes made this a compelling business case for us. Our technology behind the insurance exchange is a great fit for helping this industry overcome some of its current challenges.”

“Our expertise in commercial lines rating and policy processing has positioned us to address this important commercial lines automation priority for the exchange,” said Jeffrey Glazer, LexisNexis senior vice president and general manager for insurance solutions. “We have also been able to bring together some very strong, relevant technology partners to accelerate our product launch timing.”

Wade Reece, chair and CEO at BB&T Insurance Services as well as CIAB's vice chair, said that “we, as brokers, have created a powerful partnership with LexisNexis that portends well for our combined ability to serve our customers. Now we need to move rapidly forward together to build something that really makes a difference on our daily workloads and get it in the hands of our agents and brokers who have been wanting it for so long.”