“Voets Toets”

The term “voets toets” originated from the early Dutch farm settlers in the “Cape of Good Hope”, and today is a recognized legal term in contracts within South Africa. After some extensive but mostly unrewarding “Internet research” by myself to try tie down the origin of the term’s use, the best I could establish is that in days past it referred to the purchase of second-hand farming equipment, namely a wood ox/horse driven cart/wagon. Essentially, the term translates as “foot tested” and arose whereby the prospective “buyer” would physically investigate the item for sale and literally “kick it” to test the sturdiness of the frame. If satisfied, the transaction went ahead, and there was no liability on part of the seller in the event the goods proved faulty. Needless to say, there were no doubt a lot of unhappy buyers who wished that they had gone with the goods that came with a warranty.

The point behind this otherwise “obscure trivia” is that it struck me as being appropriate in summing up the sense of uncertainty which has been expressed by many within the insurance industry toward the development of the Centre for Study of Insurance Operations’ (CSIO) real-time broker-to-company Internet portal. Following an announcement by the CSIO earlier this year that the first phase of the portal will likely be up and running before the year’s end, I wrote an editorial (see February 2001 issue of CU) expressing some concerns over the technological approach that has been taken in the project’s development.

Subsequently, and much to my surprise, I received several letters from parties likely to be affected by the portal expressing grave concern with regard to the direction being taken with the Internet initiative. I have also been approached at industry events and telephonically by a far greater number of individuals voicing the same doubts, some with real technical and cost-related objections – the real surprise to me being that usually trying to get any feedback from the industry on the contents of articles is equivalent to “pulling teeth”. Clearly, there are serious concerns within the industry, from brokers, technology vendors to insurers, over the manner in which the portal is being constructed. And, if nothing else, the negative feedback definitely suggests that the CSIO faces a formidable task in getting out “real information” to the industry in terms of why certain development decisions were taken in the portal’s construction, as well as the costs associated with doing so.

Also, being a believer in the adage “where there’s smoke there’s usually a fire”, I have done further digging into some of the negative issues raised over the portal’s development. As one source who preferred not be named notes, “for the more technology advanced brokerages, the first phase of the portal will basically mean learning to do backstroke”.

Many of the criticisms concerning the portal relate to the CSIO’s attempt to design the portal to meet the needs of the widest number of users. Mainly, there is suspicion the project is being driven by politics rather than common sense, and that the real “low-end” user applies to the insurance companies funding the CSIO. It is no secret that many insurers are still trying to integrate basic on-line communication such as e-mail with their antiquated legacy-driven systems. The unnamed source also points out that, to his knowledge, none of the CSIO company members supporting the Internet initiative have actually moved beyond their “voiced intent” to actually taking steps to upgrade their systems to accommodate the launch of the portal. “We’re not talking about minor adjustments to these systems, the time-frame given for the portal’s launch would seem impossible,” he adds.

Another factor seeming to have weakened support for the portal is the ambiguity to costs – to both its development and future user application. At the recent CSIO AGM, president Klaas Westera was asked whether the portal’s further development would require “over and above” budget funding from insurers. Westera conceded that further funding would be required from members, but was not able to put a price-tag to what this may be (see MarketWatch of this issue for further details). As an observer, my comment would be that greater transparency regarding the objectives, benefits and costs of the portal need to be communicated broadly within the industry as a first priority. Without true support, the long-term advantages presumably represented by the portal in concept could be lost – or run the risk of facing dismal financial failure similar to that of the industry’s ill-fated Synchron Project.