April 05, 2001, 3:15 PM — Several insurance industry powerhouses are stepping up efforts to cut paper from their operations with a range of Web-based projects that are also designed to cut costs.
The St. Paul Cos. in St. Paul, Minn., and American International Group Inc. (AIG) in New York have both gone live with a Web-based XML application process developed by one of their insurance brokers, InsureHiTech.com in Princeton, N.J. InsureHiTech was inspired to automate the previous time-consuming paper-based process after catching the technology bug from its high-tech business customers, said Rick Maloy, the company's president and CEO.
Customers, their insurance agents or both fill out an electronic form that InsureHiTech's back-end system sends as an XML e-mail to the carrier's server, according to Maloy.
"No humans have to touch it," Maloy said. "It drops directly into their rating and policy management system, so there's no rekeying."
The technology will make quote preparation and delivery more efficient and increase customer satisfaction, said Christopher Sparro, president of the middle market and commercial units at National Union Fire Insurance Co. in Pittsburgh, an AIG member company. However, he was unable to provide any specifics about expected cost or time savings because the process is so new.
In addition to the XML-based system that InsureHiTech has pioneered, AIG has implemented a Web-based interface for agents.
"It allows us to generate quote letters, to qualify our accounts, quote and bind policies, all online," Sparro said.
St. Paul is using the technology for property, general liability, errors and omissions, biotechnology product liability and clinical trial coverage policies.
It took only a couple of months for St. Paul Cos. to tie into the InsureHiTech system, said Jon Farber, underwriting director at St. Paul Technology, a division of St. Paul Cos. But despite the progress InsureHiTech is making, the average broker won't be fully automated for at least five more years, said Eduard Cecere, an analyst at TowerGroup in Needham, Mass.