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Insurers Must Capitalize on Internet Boom

Lisa Ugur, Tax-news.com, London

14 June 2000

Last week the Bermuda Insurance Institute hosted a one day E-Insurance Conference in Hamilton at which insurers and reinsurers were told they would have to get on the Internet bandwagon or else risk their businesses and let Web insurance companies surge to the top of the the pack.

William Woods, CEO of the Bermuda Stock Exchange, spoke at the conference and warned of an "Internet trade explosion" in the next few years, likening trade between businesses on the Internet to an electronic mini stock exchange. He said that the business-to-business market was seeing a fantastic rise, with estimates that the market in the year 2003/4 would be worth $7.2 trillion.

Woods said 'Business to business exchanges change everything. There will be global multiple buyers and sellers from all over the world meeting in the electronic market space. There will be dynamic pricing. And cost will be reduced by up to 50 percent. Integration with a dominant business to business exchange can revolutionise a company's whole supply chain management.'

Whilst the conference included other talks from e-commerce and insurance professionals in Bermuda, the event was dominated by Mr Woods, who outlined seven secrets to success in insurance trading on the Internet, including staying focused and specialising in a vertical framework. Above all, he said he believed that companies had to have enough drive and determination to suceed in the increasingly Internet-focused market and that it was essential to maintain commercial neutrality whilst ensuring transparency and integrity.

Woods continued: 'Business to business exchanges are like stock exchanges - they have to have integrity, ie, be on an open, fair market. They need neutrality and have a need for regulations, membership and ownership structures. And they need transparency as well as confidentiality.'

Insurance and reinsurance is big business, and this is certainly true of Bermuda. With all the Caribbean offshore jurisdictions vying for the postion of top dog in the e-commerce stakes, getting insurance companies trading on the Internet must surely be a big priority. The insurers undoubtedly know this, it is just a question of who is quickest off the mark to capitalize on the predicted Internet trade boom.

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