US Property and Casualty Insurance Exchanges: Promises and Perils
IntroductionInsurance exchanges are not a novel concept to the US property and casualty (P&C) insurance industry. However, the industry is littered with failure after failure of P&C insurance exchanges, specifically commercial P&C exchanges. This report delves into the challenges commercial P&C exchanges have to overcome to succeed in the US.
Features and benefits
* Discussion of exchanges from a general perspective.* Discussion of the five major participants and two critical flows of a commercial P&C insurance exchange.* The one critical attribute a commercial P&C insurance exchange must have to succeed in the US.* Discussion of what attracts brokers to commercial P&C insurance exchanges.* Discussion of the perils which commercial P&C insurers are concerned about and need to be resolved.
Highlights
This report discusses the high-level structure of commercial P&C insurance exchanges, briefly compares three P&C insurance exchanges, and provides recommendations for insurers, brokers, technology vendors, and the management of insurance exchanges.
Your key questions answered
* What do commercial P&C insurance exchanges have to do to succeed in the US?* What are the similarities and differences between three P&C insurance exchanges -the emerging CIAB/L-N exchange, the SeaPass Hub, and InsuranceNoodle?* What important lesson does the e-book/e-reader phenomena have for insurance exchanges, brokers and insurers?
US Property and Casualty Insurance Exchanges: Promises and Perils
US Property and Casualty Insurance Exchanges: Promises and Perils
TOC
SUMMARY
Catalyst
Ovum view
Key messages
EXCHANGES ENABLE EFFICIENT COMMERCE
Exchanges, including insurance exchanges, have existed for centuries
A CPC INEX has five major participants and two critical flows
A CPC INEX must be a risk matchmaker
A CPC INEX can bring true demand and supply into sharp relief
A snapshot of three CPC INEXs
CPC BROKERS ARE ATTRACTED TO A CPC INEX’S PROMISES
CPC Brokers’ success is entirely dependent on the health of the CPC insurance market
CPC brokers are looking for financial advantages
CPC brokers do not want to lose control of their clients
CPC INSURERS SEE AN INEX AS A GLASS HALF-FULL AT BEST
CPC insurers are concerned about an INEXs perils
RECOMMENDATIONS
Recommendations for CPC insurance companies
Recommendations for CPC insurance brokers
Recommendations for technology vendors
Recommendations for CPC INEXs
Encouraging the participation of CPC brokers and insurers
There are two major sources of revenue a CPC INEX should pursue
CPC INEXs can not forget the basics
Alternative views
APPENDIX
Further reading
Definitions
Methodology
Author
Ovum Consulting
Disclaimer
