Application for online trading of insurance policies, including centralized management and a system that can be accessed from anywhere in the world. The solution has been implemented in 14 countries and translated into 13 languages. It is accessed daily by some 8,000 users.

Marsh is the flagship operation of Marsh & McLennan Companies (MMC). MMC is a global risk and human capital services firm with annual revenues of close to €9.3 billion and some 55,000 employees in over one hundred countries. MMC companies help their clients identify, plan and respond to mission critical problems and risks for their businesses.

Marsh is the world’s leading risk and insurance services firm with 28,000 employees and annual revenues of around €3.8 billion. It provides global risk management services, risk consultancy, insurance broking, financial solutions and insurance program management for business, government agencies, associations, professional services organizations and private clients in over one hundred countries.

Background

Marsh helps its clients obtain the best possible insurance cover in view of their specific needs. To do this, the firm analyzes needs and defines the exact cover required. This information is then documented and sent to various insurers, who may respond with a quote for the policy (called the “product” in the industry jargon). Products would include, for example, civil liability, business loss and physical injury policies, or oil tanker hull insurance.

Where the client requires substantial, extensive cover, it may be that no single insurer is willing to underwrite the total, and Marsh negotiates the policies with various carriers simultaneously in order to diversify the risk. For example, the final cover might be provided by four carriers, each taking 25% of the total risk.

Negotiating the product right through from the initial submission to the cover note finally accepted or declined is a complex process, in which Marsh agents and executives must handle and exchange an enormous volume of data with insurance companies about prices, risks, contractual content, counterparties, and so on, in a process that brooks neither delay nor error.

Negotiation of products before EuroTrade

Before Marsh deployed EuroTrade, a business-to-business [B2B] application developed by Kynetia for the negotiation of insurance policies online, the product negotiation process was drawn-out and laborious, generating an enormous volume of documentation. Indeed, Marsh used to negotiate with carriers by telephone, fax and e-mail, keeping paper records of the process until the cover note was finally signed. This was slow, the likelihood of error was high, and the same data had to be rewritten over and again in the course of the process.

It had become clear that an application was needed to support this process and lighten the workload by allowing information to be recorded in an electronic format, stored and consulted quickly at any time without the duplication of data inputs.

In this context, Marsh Spain invited tenders and, after an evaluation of the proposals received, chose Kynetia to develop the application (initially called “ePlacement” but now rechristened “EuroTrade”), which was initially to be used only in Spain. As we shall see below, however, the application was a runaway success and was soon deployed and running live in almost all of Marsh’s European branches (14 countries).

The challenge

The challenge was to developed a B2B e-trade platform to allow online negotiation of insurance policies, centralizing management in a globally accessible system.

The non-functional requirements of the project were as follows:

• An open platform that would protect the IT investments already made by the client, minimizing the cost of the first version:
  • Microsoft Platform (MS Windows 2000 Server, with IIS).
  • Java 2EE (Weblogic) applications server
  • Sybase Anywhere database
  • E-mail channel
  • Generation of PDF documents in real time
• The main requirement for EuroTrade was that the application should offer a simple method for the definition of new insurance forms without the need to recode the software every time the client needed a new product. This Dynamic Forms concept was key, because it would guarantee the flexibility of the system and its capacity to adapt to the specific requirements of each policy.
• Response time was critical, because the aim was to keep the average workload of an account executive using the platform down to the minimum.
• The database was to have a very short response time for reading / writing data input in Dynamic Forms. It was also necessary to offer the option of migration from the Sybase database chosen by Marsh as its initial technology to any other data base server, in order to protect not only the client’s past but also its future IT investments.
• In the area of file storage, it was necessary to ensure that attached documents and PDF files could be saved and linked to contract (negotiation) projects, and that they would be available online.
• Another key point was that the new application should be capable of generating PDFs containing the Dynamic Forms and product definitions, keeping a digital record of the status of each policy over the course of the negotiation process. Meanwhile, it was necessary to design a solution that would not entail additional costs or software requirements, except for the (free) use of Adobe Acrobat Reader.
• Multi-language support for the application was also required, as this would permit Europe-wide use of the system. As a result, both the application and the Dynamic Forms (including PDFs) would display information in the language defined by the user profile.
• Security. A high level of privacy was required for the data handled by the system.
• Finally, Marsh had one fundamental development requirement: the application was to be deployed and running in record time. This meant a time constraint less than one year.

The solution

In line with the Client’s needs, the architecture designed focused on solutions to provide flexible forms and data capture, as well as ensuring high performance and short response times.

Kynetia designed a B2B application for Marsh allowing online quotes for business risks and centralized management of product negotiation in a system accessible from anywhere in the world.

The application’s structure allowed for permanent growth and rapid adaptation to the client’s emerging needs. EuroTrade offers the following functionalities.

• Online management of proposals, negotiation (including co-insurance and riders) and cover notes.
• Tracking and control of projects in progress and policies written.
• Status data on any quote
• Access to all stored versions of each negotiation in PDF format (which is widespread and compatible).
• Generation of statistics (for BI, etc.) by line of business and carrier.
• Generation of application use reports.
• Overview of the insurance market situation at all times.
• Notification of users via e-mail and generation of PDFs.
• Generation of policy reports (comparative schedules for proposals, modifications in different policy versions, etc.).
• Generation of audit reports to allow system use monitoring.
• User management for both insurance companies and brokers, allowing the administration of hierarchies, roles, etc.
• Policy transfer between application users.
• Management of attachments to policies (e.g. images or Excel files).

The application entered service in September 2002, achieving excellent results for Marsh and its clients and allowing the whole policy negotiation process to be carried out:

• More efficiently
• In a shorter time
• At lower cost (savings on personnel, error correction, paperwork, etc.)
• Securely, with optimum control over access to the information
• Easily and flexibly with regard to the generation of new products (lines of business)
• With the capability for monitoring and analysis through the generation of statistics and reports

In view of the success of the platform developed by Kynetia in Spain, Marsh decided in 2003 to extend the use of EuroTrade to other European countries.

Based on the original architecture design, the application is currently in use in 14 European countries and has been translated into 13 languages (English, Spanish, Portuguese, German, Dutch, Danish, Swedish, Polish, Finnish, Greek, Turkish, Italian and French). It is easily adapted to local requirements due to the parametization of lines of business for global management. EuroTrade currently provides support to some 8,000 users (500 concurrent users) and, given the rapid growth in the use of the platform, it is estimated that there will soon be around 20,000 and that there may be between 2,000 and 5,000 concurrent users.

The case of the United Kingdom is particularly illustrative of the use of EuroTrade:

• Over 600 employees have been trained in the application, and some 300 of them are frequent users.
• There are around 1,700 agents trained in the use of EuroTrade in insurance companies.
• Around 1,500 submissions are made to the market (carriers) each month.
• Business written online using the EuroTrade tool was worth around €180 million, and Marsh UK’s objective is to achieve an 80% share of sales for this segment.

In the United Kingdom, EuroTrade has attained a strong position in the middle market (i.e. firms contracting policies with a value of between €20,000 and €200,000), both from the business standpoint and as regards working methods, which have set the course for Marsh to begin commercializing other products in the future.

The use of EuroTrade in the United Kingdom has proved especially practical for the creation of reports on negotiations with carriers. These reports provide vital but hitherto unavailable information, such as the insurers and brokers quoting the best premiums for certain lines of business, and the time required to negotiate a product or line of business with each carrier, providing a clearer picture of operations.