eReinsure the Company

5.16.02

E-commerce - eReinsure nets giant Chubb in major deal

The Chubb Corporation has reached an agreement with eReinsure which will see the US giant place all of its facultative reinsurance transactions on eReinsure's online platform.

The Chubb deal is the first time that an insurance major has signed up to use a single e-platform for buying reinsurance, eReinsure believes.

The agreement provides for several hundred Chubb underwriters in more than 50 US offices to use the eReinsure platform.

The company hopes a roll-out to Chubb's global office network will follow.

Chubb is active in the US onshore energy market and is ranked 11th in the US for inland marine cargo coverage.

It provides casualty cover worldwide through affiliates in Europe, Asia, Latin America and Australia.

Chubb hopes the platform can contribute to cutting the costs of procuring reinsurance and senior vice president Bruce Thorne thinks the entire process can be better managed online.

"The ability to have this platform integrate with our other IT and processing systems is a good example of the way we see technology moving," he said.

"Now the dot.com smoke has cleared, we can see the real value is in consistency of process that delivers better management information," added eReinsure chief executive Igor Best-Devereux.

He said that the potential cost benefits were not about "saving $50 on fax costs but making sure you collect on a $1m placement."

In a hardening market, he claimed that a better view of data meant better decisions were possible.

"It's a sad fact that obtaining reinsurance has become a longer, more difficult, more expensive process. There's no point doing this without real value."

eReinsure has recently added to its stable of clients with Converium, Swiss Re and Wellington Underwriting joining the platform.

Founded as a pure technology company, eReinsure nominally competes with inreon, a platform established by Munich Re, Swiss Re and management consultant Accenture in 2000.

Mr Best-Devereux plays down suggestions of direct competition, pointing that inreon and eReinsure represent different constituents of the reinsurance market.

"We do different things and as such, we're fairly complementary but it's clear who the long-term players are now."

Though insurers and reinsurers are embracing internet-based procurement, its attitude has, until recently, been one of suspicion.

Converium's Andrei Chivvis said recently that though his company had long recognised the cost and efficiency benefits, a comprehensive solution addressing the complexity of established practices was elusive.

"It has certainly taken longer to get to adolescence and I'm impatient that things haven't changed more quickly," said Mr Best-Devereux.

But he said that Chubb's decision to join the platform sent a positive message to buyers of reinsurance.

"There is a definite acceleration, we're seeing that feedback now. This decision is a strong signal to the market."

Article sourced from Lloyd's List of May 16, 2002.

Article by Neville Smith.
Copyright 2002 by Lloyd's List.
Used with permission of Lloyd's List (www.lloydslist.com)