eReinsure the Company

10.1.01

Online Approach Seen to Cut Costs

Internet technology can allow reinsurers to "attack the very high costs of doing business" and enhance their results, according to online technology specialist eReinsure.

Igor Best-Devereux, the company's chief executive, noted that underwriters and brokers retained a number of concerns about conducting business electronically, including whether online systems would make buying reinsurance more efficient or would merely focus on selling capacity.

They were also concerned that the Internet would require them to participate in a public auction rather than negotiating privately with trusted partners, and that web-based platforms might not integrate fully with traditional methods of conducting business, he said.

"Only when you have addressed these issues can you begin to achieve the full cost and efficiency benefits of Internet technology in this industry", Mr Best-Devereux said.

He insisted that "the Internet has great potential for reducing costs and increasing productivity for insurers, reinsurers and brokers through process improvement, information management and decision support".

However, Mr Best-Devereux argued that Internet-enabled solutions for the reinsurance industry needed to operate alongside existing working practices, including decentralised procurement. "Any system that does not recognise and respect the way the market works will not succeed", he added.

Sourced from The Re Report
October 1, 2001

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