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Automation of non-financial updates major benefit of XML technology

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By Chris Whitside

Having successfully completed its phase two analysis, the Life Company Central (LCC) committee has announced its decision to discontinue the insurance portal and network project. LCC was created last year to consider the development and implementation of a common information exchange system for the life insurance industry.

FundSERV was approached in the early stages of the project because its existing network architecture, security features and support services made it a strong candidate to provide the technical backbone for LCC. Although the business case for LCC demonstrated cost savings and benefits, the final plan failed to convince each member company that they would see the savings they needed and expected.

"We were disappointed to hear the news," says Alan Hutton, president, FundSERV Inc. "While our interests had not yet aligned, we remained hopeful that a compatible business model could be developed and we could join forces to our mutual benefit. We still believe our infrastructure can play a valuable role in serving the insurance industry, as it has in the investment fund industry for the past ten years."

The portal and network needs of the insurance industry are similar to those of the investment fund industry. The challenge is to provide access through a secure multi-company portal enabling insurance carriers and distributors to process and administer business and exchange data. Even more challenging, prospective customers have a variety of existing systems; the need for open architecture and common standards must be addressed with any possible technology solution.

Some of the insurance companies and most of the distributors are already using FundSERV's network to conduct investment fund business, so they are accustomed to standardized information and managed workflow. The insurance business has typically fewer, but higher value, transactions. The time from application to contract is often weeks and sometimes months. A FundSERV-like facility could provide wider and more efficient distribution for the carriers and more choice for the distributors. Network connectivity and workflow management could reduce the time, cost and risk of insurance transactions, similar to those benefits enjoyed by the investment fund industry.

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