Electronic transaction initiative takes next stepBy Donna Glasgow | February 12 2010 04:26PM
A transitional bridge group has been formed with the goal of moving forward an initiative to establish a common electronic transaction solution for the life and health insurance industry. This group was created following a summit meeting on Jan. 26 in Toronto that attracted 130 participants from all sectors of the industry.
The summit was attended by 33 executives from insurance companies, 53 distributors and 44 industry technology suppliers. It was organized by CLIEDIS (the Canadian Life Insurance Electronic Data Interchange Standards association).
Scott Sinclair, Chief Operating Officer of Transamerica Life Canada is part of the new bridge group. "We need to fundamentally modernize this industry," said Mr. Sinclair in a media conference call following the summit meeting.
At press time, 19 bridge group members were listed on the CLIEDIS website. They included representatives of insurance carriers, distributors, paramedical services suppliers, technology vendors and CLIEDIS.
Among other objectives, the group will prepare a proposal for presentation to the industry that will clarify the purpose, costs, benefits, constraints and assumptions related to a potential e-transaction system and consult with stakeholders to build industry engagement for the initiative.
"The BG (bridge group) will leverage their expertise, experience and contacts to get commitment to move forward with the initiative...and be an advocate for broad support for the outcomes being pursued in the project," says a statement from the group's charter. The bridge group is expected to work together for the next one to three months.
Over the years, other technology projects for the life insurance industry did not result in a common solution. But there is a difference this time in that consumer demand for more efficient service is now driving the need for an e-transaction system, say the leaders of this initiative.
Bridge group member, Tim Fitzpatrick, President of technology vendor VirtGroup, commented in a CLIEDIS press statement that the life industry is late in adopting such technology. "It is 2010 and yet on average it takes 36 days to process and issue an average insurance policy. Aside from the time required for medical testing, for some insurance applications, this timeline could be cut to as little as 24 hours [with electronic processing]."
He said he believes there is now consensus in the life industry to create an electronic system similar to the one that the investment industry has enjoyed for several years.
Asked how far off an e-transaction solution could be, Mr. Sinclair answered that the technology is already available, so building a system could be done in just a couple of years. However, the politics or mechanics of getting many disparate industry players on board will be the challenge in achieving a common e-transaction solution.