VSJ – September 2004 – Work in Progress

As we reported in July, Tony Grimes, a recent graduate at IAP Education Partner Lincoln University, has developed a new software system that will allow insurance brokers to eliminate paper cover notes. Here he begins a series of articles describing the scheme.

In August 2003 I was coming into the final year of a part-time computing degree at Lincoln University and needed to devise an appropriate Independent study piece. Independent study is the final assessment for a Degree student and can be in the form of a research project or a practical project.

A part-time student has the benefit over a full-time counterpart that there is a real opportunity to develop a project that can be used in the industry in which he or she works. This opportunity brings real benefits to the student, the employer and also the University. Students can use their industry knowledge to design the proposed system. Such knowledge will usually have been accumulated prior to their undergraduate studies and can allow them to view a potential project objectively and from a user’s perspective. Students may be pushed to greater limits by undertaking a ‘real world’ project but throughout the development process and beyond, the rewards are obvious in terms of experience and the beginning of a proven track record. The Employer should receive a working system, designed by a developer with working knowledge of the industry (which we all know is a significant benefit) at little or no cost. This presents an ideal opportunity for the student to prove their new skills to the employer who can then consider the future of the employee with the knowledge that their academic skills can be put to practical use. The University can show not only that their courses are delivering post-graduate students into the business community but also that those students have already begun contributing to that community and the courses are delivering tangible vocational skills.

In August 2003 I approached Terry Stanley, Broker Services Director, to see if the company could benefit from my Independent Study Project. I have worked for Broker Direct plc, an ‘Insurance Broker owned’ Insurance Management company in Bolton, for the past six years. Terry said that he had been thinking of a new system and was about to approach a software development company to begin discussions regarding feasibility and cost. The system in question was Terry’s vision of an electronic ‘Cover Note’ system.

Terry explained that the concept was a standalone application that would be distributed to 1200 UK based insurance brokers. The system would replace the paper cover note that has been used for as long as Car Insurance has existed.

An Overview of Cover Notes. Computerised systems produce most documentation in an insurance broker’s office but short-term requirements are not usually catered for. For instance, when a car is being repaired, the policyholder must insure any courtesy car. Since the inception of the Road Traffic Act in 1930, a motor vehicle can only be driven legally if a valid certificate of insurance has been issued. A cover note is a short-term insurance certificate.

Security surrounding the issuing and storage of cover notes has always caused the Insurance industry problems. A blank cover note can fetch £50 on the black market. The recipient can complete it fraudulently to provide proof of insurance for Road Tax purposes or to the Police. Cover notes must therefore be stored securely. It is illegal to produce a cover note whose inception date is in the past, otherwise a policyholder could be incur a loss and take out insurance after the event, which is clearly unethical and unworkable.

Next month, Tony will describe his solution to the problems outlined above.

[Interesting project or development? Let us know at eo@iap.org.uk!]

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