Brokers, insurers and underwriters need to work together to realise
Internet-enabled business benefits

London, UK, July 11, 2001 – A research report
commissioned by SilverStream Software (Nasdaq:SSSW), provides strong evidence that the
London insurance market is set for significant change in the way that it conducts business.

The new report, A Survey of the London Insurance Market,
compiled from research carried out among Lloyds brokers, underwriting agencies and
insurance companies, points to technological advances and deployment of Web-based
applications as the prime forces driving change. But the degree to which these
technology-enabled opportunities are being exploited varies considerably.

Despite relatively limited use of e-business at this moment
in time, 71% of brokers, 87% of underwriting agencies and 87% of insurers expect to have
an integrated website within two years and acknowledge that significant improvements to
their business can be achieved through the Internet. For instance, when asked about the
average percentage increase in efficiency that is anticipated by implementing a Web-based
solution, brokers expect product development, marketing and sales to be
improved by an average of between 34% and 40% and are just as bullish about activities
such as logistics (41%), human resources (33%) and broking (33%).

The insurers do expect some significant improvements in training
(26%), marketing (22%) and underwriting (22%), but they are more sceptical
about product development and sales, where they anticipate efficiency
improvements of only 12% and 18%, respectively. Underwriting agencies are also more
enthusiastic about Internet solutions than insurers generally. This is especially the case
for marketing and product development, where they expect to see average
percentage increases in efficiency of 32% and 21%, respectively.

The general conclusion is that brokers recognise the
opportunities provided by Internet solutions and are particularly aware of the benefits
they may be missing. All organisations interviewed recognise similar priorities and the
need to develop their Internet capabilities, but insurance companies are by far the most
reluctant to commit themselves. In particular, it is generally accepted that little is
going to change drastically until the market as a whole is prepared to make the transition
to greater use of technology.

The research showed that respondents felt there was a pain
threshold to accept before e-business and the World Wide Web could be fully embraced. In
particular, they highlighted acceptance of a new role for brokers; the requirement for a
culture of change in what is a conservative marketplace with very traditional practices
based largely on personal relationships; overcoming perceived technical barriers to bringing products
and services online; and cash flow issues as business processes become more streamlined.

The traditional nature of the marketplace was described by
one broker in an in-depth interview carried out for the research. He said: “I could
go to an underwriter and find five brokers there and each broker will have a bundle of
slips. I could sit there and wait the whole morning. It is a very ancient [filtering]
system. An Internet system says we guarantee you will get a quote in 24 hours.”

The research identified that the impetus for change would
happen when the market feels more threatened by competitors than by technological change.
This is already being acknowledged – the research also identified that the driver
behind greater efficiency is the need to improve profitability. The vast majority of
brokers (84%) and all of the agencies and underwriters interviewed said improved
profitability would be the greatest driver for change, while increased competitiveness was
also highlighted by 76% of brokers, 74% of insurers and 100% of underwriters.

In addition, underwriting agencies were most concerned
about the fact that relationships between insurance companies and brokers will have to
change significantly
. Eighty seven percent (87%) felt this to be so; a much stronger
feeling than with insurers or brokers, although some 58% and 63% of these, respectively,
also clearly thought that this was important. Part of this change will undoubtedly see new
roles replacing traditional ones. Forty two percent (42%) of insurers felt that a lack of
technology in broking companies could delay any transition in their role and just under a
third of insurers (29%) said they would have considerable concern over their relationship
with brokers if they made changes themselves that were to the broker’s disadvantage.

One insurer said: “The general culture in
brokers’ firms is contra-technology but they’ll have to come on board and match
up to the electronic solutions we are offering them and modernise their business
processes. They have to get admin out of their workload and get back to sales.”

Brokers tended to agree that they could not hold onto the traditional ways of doing business.

One admitted: “In our market at the moment the
relationship between a broker and underwriter is extremely old-fashioned and the insurance
market is renowned for being backward in IT solutions. Our relationship will have to
change dramatically. Many of our cases are physically negotiated – face-to-face – when
they could just as effectively be handled on the Internet.”

Despite these issues, there is little doubt that the
majority of the companies interviewed “have the commitment to exploit the new
opportunities that are being created by new technologies and the Internet”, with 63%
of underwriting agencies, 68% of brokers and 79% of insurers agreeing with this statement.

Commenting of the research findings, Martin Kett,
SilverStream’s Development Manager for the insurance market, says: “The London
market is a very traditional environment based largely on face-to-face meetings. While
this is still invaluable, the research shows that change is inevitable and that the
companies within the market are perhaps not as conservative but are more progressive than
might at first be thought. Currently, there is a lot of time wasted with brokers queuing
to see underwriters and a lot of unnecessary duplication, which in turn could increase the
risk of error. Much of this work could be undertaken in a fraction of the time using the Internet.

“Change is always difficult but there appears to be an
acceptance that it is inevitable and that it is essential if the market is to remain
competitive and profitable. Other financial institutions such as banking and stock trading
have already made the technological transition. It’s now time for the insurance industry
as a whole to face up to the challenges of change or risk being left behind.”

Carried out by independent research company, Metrica
Research, the survey was based on a combination of quantitative telephone-based and
qualitative in-depth interviews focused on key decision-makers in broking, insurance and
underwriting companies that are part of the London insurance market. Eighty-four companies
in total were interviewed. Copies of the report are available free of charge from
SilverStream by contacting Katharine Rayner on +44 (0) 1442 860591 or by e-mailing her at
[email protected].

About SilverStream Software, Inc.

SilverStream Software, Inc. (Nasdaq: SSSW) delivers the
first complete and integrated services environment to simplify and accelerate the
development of eBusiness applications. SilverStream’s proven technology is based on
the best of Java, XML, and Web Services, and enables businesses to unlock the potential of
existing systems and rapidly deliver business applications to the Web. SilverStream powers
business operations for more than 1,500 customers worldwide including ADC
Telecommunications, Amerisure Insurance, Home Depot, the Chicago Stock Exchange, Samsung
Electronics, Sears, Qwest Communications, US Cellular PIC Wisconsin, Chubb, Transamerica
and Swiss Life. SilverStream’s worldwide partner network includes system integrators,
independent software vendors, application service providers and other strategic partners
such as Cap Gemini Ernst & Young, Compaq, Deloitte & Touche, Hewlett Packard, IBM,
Intel, Mercury Interactive, Microsoft, Oracle and Sun Microsystems.

Headquartered in Billerica, Mass. with offices throughout
the world, SilverStream delivers software and services to help Global 2000 organisations
extend their business to the Web. For more information, please visit

SilverStream is a registered trademark of SilverStream Software, Inc. All other
names are trademarks or registered trademarks of their respective owners.

This press release contains forward-looking statements for
purposes of the safe harbor provisions under The Private Securities Litigation Reform Act
of 1995. Forward-looking statements include, but are not limited to, statements regarding
the Company’s expectations, beliefs, hopes, intentions or strategies regarding the future.
These statements involve risks and uncertainties that may cause the Company’s actual
results to differ materially from those expressed or implied by such forward-looking
statements. Factors that could cause or contribute to such differences include, but are
not limited to: continued widespread adoption by businesses of Internet business
solutions; market acceptance of our products and services and enhancements thereto; our
ability to expand our eBusiness solutions and services customer base and to provide
customers with solutions and services; our ability to develop and expand our sales and
marketing capabilities; development of the marketplace for our products; technological
changes; our ability to grow our customer base or generate repeat business; our ability to
develop and enhance our products and services; our ability to continue using third party
software in our products; protection of our intellectual property; and other risk factors
that are discussed in the Company’s reports and registration statements filed from time to
time with the SEC including, but not limited to, the Company’s 10-Q for the quarter ended
March 31, 2001. All forward looking statements included in this press release are based
upon information available to the Company as of the date hereof, and the Company does not
assume any obligation to update such statements or the reasons why actual results could
differ materially from those projected in such statements.


Katharine Rayner
SilverStream Software
Tel: 01442 860591
Email: [email protected]
Caroline Middleton/Caroline Sweeney
Portfolio Communications
Tel: 0207 240 6959
Email: [email protected]