Insurance policies factory: A technological step forward

For a distributor of insurance products, the use of their own IT system means primarily the ability to offer customers products from many companies, without the need to log into portals created by specific companies. In addition to the comfort of choice, which is undoubtedly extremely important for the customer, our own system significantly simplifies the distributor’s billing or reporting processes.

Recently, during business talks with the leasing industry in which I participated, the word webservice was mentioned every second sentence. It often constituted the core of the presentation, the axis of the discussion and the point of reference in designing technological changes in the distributor’s systems.

We can ask ourselves: why is this happening? Is it a fashion, a trend, or maybe the invisible hand of the market? Why is the use of webservice technology in the cooperation of an insurance multiagency with an insurance company so important? Before I try to answer this question, I am going to describe the traditional model of cooperation between the company and the distributor in a few sentences.

From the IT systems point of view, each of the aforementioned entities operates on its own independent software. Therefore, in the case of, for example, introducing product changes to the market, the insurance company must first carry out a number of system changes on its side. In the next step, it must provide its distributors with a tariff model and the necessary documents to be implemented in their systems.

The specificity of this process generates a significant need: time. From the moment a new insurance product is developed to the moment it appears in the distribution channel, quite a lot of time passes. Therefore, such an action is not only cost-effective, but also generates significant delays in the market debuts of new products or changes in tariffs expected by the customer. It also creates quite a significant possibility of making a mistake in the process of implementing the new tariff in the distributor’s system.

So, how does the use of webservice technology affect the known and cited above model of cooperation?

It turns out that it has a significant impact on it, and the added value is visible not only in the operational dimension, but also in the economic one.

Through the use of direct information exchange between IT systems (using the webservice technology), the distributor first of all obtains access to the always up-to-date tariff and the premium calculated on its basis.

This is because the premium is provided directly by the society’s quote service. The distributor does not have to waste effort or their resources to update the existing or implement new algorithms calculating the premium in his own system, as would be the case with the existing cooperation model. Thanks to this, he can concentrate on what is most important to him – achieving quantitative and qualitative goals.

It can therefore be concluded that from the point of view related to improving operational efficiency and reducing costs related to product updates in the distributor’s system, this is a technological step forward.

It is also part of a trend that has been observed on the Polish insurance market for some time. Insurers more and more often decide to integrate with distributors, using the webservice technology. They also provide access to further product lines that can be operated on-line – e.g. insurance dedicated to leasing companies or dealer packages.

Remember, however, that the multiagency offer is not limited to products calculated by using webservice. There is a whole range of products, such as GAP, flat-rate non-life products or legal protection insurance.

A modern IT system should support the distributor not only in selling insurance products in the on-line model but should also enable modelling of insurance products with an off-line tariff, for which – for various reasons – it is not possible to calculate the premium via webservice. In a word, the system should be flexible.

Only such a tool will ensure the distributor’s business development and allow him to gain a competitive advantage.

Paweł has been active on the financial market for over a dozen years. He has gained knowledge and experience both in business support departments and sales departments of financial institutions. In his professional career, he was associated with such companies as Bank Nordea, Bank BNP Paribas or ProService Finteco. At VSoft, he is involved in the development of the insurance area. A lover of traveling and aviation.