ISOTech is a technology conference for insurance professionals that is put on by Insurance Services Office, Inc. I was invited to attend as part of a panel discussion, and was wowed by William M. Raichle's presentation.

Raichle is the assistant vice president of the Risk Decision Information division of ISO, and it is his job to seek efficiencies that save the insurance industry time, duplicated effort and money. Bill came up with a concept that is worth exploring - finding ways that insurers, Realtors and lenders can work more effectively together. His ideas are the beginning of a healthy dialog and could evolve into a new way for brokers and their MLSs to monetize the MLS database, save consumers and real estate professionals money, and bring efficiencies to the real estate transaction.

Raichle says that the valuable information collected by Realtors and aggregated in the MLS listings database is equally valuable to lenders and insurers, particularly if they can access this information as early in the transaction as possible. The possibilities generated by allowing other industries access to the MLS data are unlimited.

With one CMA/appraisal type document, days or weeks and hundreds of dollars can be shaved from closings.

According to Raichle, it's all a matter of identifying where the needs and synergies overlap and can be met among insurers, Realtors and lenders:

Insurers need:

Specific property information (photos, sq.footage,construction type, age, stories, special features, etc.)

Replacement cost valuation - geographic information, credit information, claims history information

"In other words, insurers need information about the structure and its location as well as information about the owners. Insurers want knowledge of their exposure to risk so they can create the capacity to insure at a competitive price," says Raichle.

Insurers offer:

Evidence of insurability and insurance

Rapid response to providing insurance

All the information they collect

"Insurers offer a key service - structurally and procedurally- that aids the real estate transaction," says Raichle. "In addition, insurers collect valuable information about properties and their insureds."

Lenders need:

Clear title

Insurance certificate

Credit information

Appraisal (specific property information)

Lenders offer:

Buyer prequalification

All the information they collect

Leads

Now look at what Realtors need and offer, and the inefficiencies are clear.

Realtors need:

Detailed (MLS-level) specific property information

Reasonable assurance that closing can take place

Efficient closing processes involving lenders and insurers

Realtors offer:

MLS-level information

Leads

Clearly overlaps in credit assessment, on-site specific property information, valuations and risk can be minimized with more cooperation between the three industries. Another synergy is that the industries can share their qualified leads. But these efficiencies can't be realized until MLSs allow lenders and insurers access to the listing data.

According to panelist Mark P. Sennett, president and CEO of Market Intelligence, a division of Fidelity National Financial, access to MLS information allows technology to create a true automated appraisal that can take 15 seconds instead of two weeks, and cost $15 instead of $250. He says that he would put his automated model against that of any appraisal for accuracy and add an unbeatable caveat - a triple-A guarantee.

And who would be the essential provider of this information? The Realtor (MLS.)

This possibility is even more intriguing when coupled with the fact that Fidelity has just spun off a unit called Fidelity National Information Solutions (FNIS) which is buying up the most powerful, populated MLS information management systems in the U.S. FNIS is also the aggregator of the largest database in the world for risk assessment, environmental disclosure, property records, and other data.

Another titillating possibility is what could happen in the insurance industry. Agents are finding that some insurers are not anxious to write policies in some states, and for first-time homebuyers, that can be a challenge. In Texas, a couple of months ago, Allstate, State Farm, and Farmer's Insurance all stopped writing policies in Texas on homes with recent water damage, due to the high number of mold claims. Many agents have complained of closings being delayed because borrowers didn't have their insurance in place in time. How wonderful would it be if insurers could prequalify buyers in the same way that lenders do, so that by the time a home is selected and ready to proceed to closing, the buyer and his/her agent has some degree of confidence that at least one insurer will cover the home.

While Raichle didn't have the answers yet, he is taking his ideas in the right direction, by throwing it open for discussion.

Published: November 19, 2001

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.