While Life Company Central (LCC) continues to find a common electronic interface system for life insurance, an Ottawa-based company says it already has the solution. However, the system is not without its criticisms.
A financial data exchange platform, WealthServ Systems Corp., has developed a system it says LCC is still trying to build. The system, called WealthServ, is a complete end-to-end electronic data exchange and management solution for the life insurance industry says Mehmet Baltacioglu, Vice-President of Research and Development for the company.
"It is LCC!" exclaims Mr. Baltacioglu. He adds that since the system was developed silently it may come as a surprise that the company has found a solution.
While LCC is seen as the main entity searching for a common electronic interface system between suppliers of insurance products and their distributors, the initiative has witnessed many hurdles during the last year. It began with seven insurers committed to the project, but National Life and Transamerica Canada left the initiative. It also saw IBM Canada, which was once helping with the project, back away.
Today LCC has five insurers committed to the project: Manulife, Sun Life, Canada Life, RBC Insurance, and Standard Life. WealthServ currently has only AIG Canada as a client. Mr. Baltacioglu reveals however, that WealthServ is currently speaking to four other insurers, which he does not yet want to name.
He explains the concept for the WealthServ system began in 1999, when he was President of another organization called Winfund Software Corp. Mr. Baltacioglu later brought about a development team and they formed their own company called LifeServ to develop the system. The company later changed names to WealthServ Systems.
WealthServ uses XML, which is the ACORD life standard programming language, and is fully functional and ready to use, says Mr. Baltacioglu.
"The system has all the capabilities of addressing all the needs of an agent and managing general agency (MGA), from a front-end, to running their day-to-day business and managing their customer relations. It also has the capability of producing electronic-applications," adds Mr. Baltacioglu.
So why have LCC insurers not jumped ship and gone to the WealthServ system? Mr. Baltacioglu stresses one of the reasons may be the insurers are waiting to see the success WeathServ will have. "Everyone seems to be waiting in the wings to see if we will be successful with the AIG initiative or not...we are a very viable entity, so we hope people will at least give us a try," Mr. Baltacioglu states.
However, a source wishing to remain anonymous told The Insurance Journal, that the problem WealthServ has run into is more a political one than anything else. "The company is not getting buy-in from the industry as a whole," says the source.
"The people they should have at the table talking to them just do not seem to be willing to talk to them," states the source. "WealthServ will only succeed if LCC is dead and buried. If they were the only game in town, it would have a chance... I'm still betting money that LCC will be ultimate industry solution," the source adds.
"When LCC asked vendors to present a solution, WealthServ did do a presentation...and that may have been where they ended up losing main participant companies," says the source. The comments the source heard was that WealthServ did not do a good job of presenting the concept and that it was not a viable vendor solution.
However, Sam Albanese, President of the MGA, Albanese Financial Group, notes both LCC and WeathServ are noble solutions but with different approaches. Mr. Albanese attended the Toronto-held launch of the WealthServ system last October. He says that while WealthServ is targeting the system to the distribution-channel, LCC is firstly concentrating on the carriers. However, he adds LCC is also incorporating the input of the distributors and explains his MGA was approached to comment on the system.
Tracey De Leeuw, Project Planner and E-business strategist for LCC agrees that the WealthServ approach to processing information is very different to LCC's.
"The emphasis on their model is to get brokers and distributors to use the system and therefore it forces carriers to adopt the system," she says. Rather, LCC's emphasis is first on the carriers and then it invites distributors to use the system, which is a fundamentally different approach, she explains.
However, she adds that though the approaches are different, the WealthServ system does have some good functionality and it does process insurance information.
As well, she does not discount the idea of one day working in conjunction with Wealthserv. "The LCC portal would certainly be open to connecting to its systems, so if WealthServ goes ahead, great! It is not a competition per se but rather LCC could connect it and then it would be up to the distributors and carrier to decide whether to use the functionality of WealthServ," she remarks.
Mr. Baltacioglu explains that WealthServ is also interested in working with LCC, but says it will carry on with or without it. "LCC is not necessarily an important entity as far as we are concerned. I think the more important entity is the carriers and whether they would be interested in using WealthServ or not," he notes.