Technology Communications

Technology experts talk about the need for greater industry automation and collaboration in Canadian Insurance Top Broker's special roundtable discussion

Daryl Angier: What carrier interactivity models are currently available to brokers who want to start and finish transactions in their BMS, and what are some of the strengths and weaknesses of each of these systems?

Patrick Vice: I don’t think all data must reside in the BMS—that it must be the only source for data that goes to the carrier, and that the carrier must be able to return it in such a way that it’s identical on the broker’s system. I can tell you right now that’s not going to happen in commercial lines. And it’s not going to happen for certain products in personal lines. This whole area of black box underwriting is going to grow. Carriers are going to look for ways to improve their underwriting and improve their own competitiveness, and they’re not going to reveal algorithms to a rating engine, whether it’s an industry rating engine or otherwise.

Jeff Roy: For policy inquiry, Applied systems (WARP), Brovada, The Broker’s Workstation (TBW) and Keal offer solutions to do billing, policy and claims inquiry with various insurance companies. These transactions start and end in the BMS. When you get into policy change and new business quote there are very few solutions that allow brokers to start and end in the BMS. At one point I didn’t support portals at all. My offices are using them now because brokers need to stay competitive against direct writers. The cost of entry has been shifted to the broker to help reduce the overall cost of the insurance product. It’s a necessary evil, the interim step. I don’t want our industry to get stuck using portals forever. I do not want vendors and companies to believe that portal entry is the end solution. We need to evolve, and as an industry we need to collaborate to get to that next level.

Doug Johnston: I want to mention that SEMCI [Single Entry Multiple Company Interface] gets beat up all the time, and you want to know something? SEMCI happened in the late ‘80s and it was very successful. The problem is the technology has changed and our needs have changed, and as an industry, we need to agree on how we evolve the model and the concept of SEMCI. In the US for personal lines, I can take an ACORD XML record, broadcast it to a couple dozen carriers, get accurate, real time rates back and then issue that policy in less than 120 seconds. In Canada, we use CSIO XML, but it is really up to the carriers to determine whether they can rate a policy off of that XML stream. And if they can’t, let’s solve that problem.

Mark Wai: If you look at the difference between ACORD and CSIO, CSIO obviously is more like a subset of ACORD. As easy as CSIO XML standard for document attachment is, the conclusion is we don’t have XML standardized and available in Canada yet. From CSIO’s perspective, we want to try and come up with standardization as quickly as possible, and make it broader as opposed to just having a few standards available.

Daryl Angier: What have been some of the barriers within insurance companies to affect a change in technology that serves broker’s interests? How successful have technology providers and brokers been in lobbying the IT departments of insurers?

Pat Durepos: I’m pleased to see that most companies now have appointed broker representatives on the business side to work with the IT department. There’s a better voice coming from brokers and it does have an influence for IT direction in insurance companies.

What we have elected to do at Keal, considering some of the reluctance that we had, is focus groups with our brokers and the insurance company, and we’re talking to them about what is possible so that they can bring that to their regional VPs.. We show the VPs what can be done, what brokers want, and all of a sudden we get tremendous cooperation from the regional VPs that oversee underwriting.

Gordon Alexander: There’s been an advancement in technologies that has made it less intimidating for business users to interact with these systems, and define their requirements in native business terms. So we’ve seen changes not only in integration technologies but also advancements in business process modeling, capturing the workflows as well as the business rules, and the use of analytics. These business-friendly tools are applicable across all insurance processes, such as claims and underwriting, and are improving the overall communication and collaboration between business and IT, leading to real competitive advantage.

Glen Piller: Years ago carriers built a portal, threw it at the broker and said there you go, use it. Many of those first generation portals were essentially web front ends to underwriting systems, or policy admin systems. It was not very well received and the uptake was forced. Now when we’re talking to carriers we find they’re deploying technology solutions that get much more involved with what the BMS can do, taking that information and integrating it, and pre-populating portals and systems to really make the broker’s life easier.

Doug Johnston: IT departments have become aligned with profit centres. So now we take a look at broker connectivity and efficiency projects, and suddenly IT is saying, ‘Where’s the ROI?’ But one of the things we need to step back and recognize is that over the past 25 to 30 years, by doing a lot of these broker-carrier projects, we’ve eliminated a tremendous amount of the underwriting expense ratios of companies. Download in itself has eliminated printing, mailing, paper shuffling. Moving forward, we need to work with IT departments and companies and look at opportunities to make combined or underwriting expense ratios even more effective.

Daryl Angier: Mark and Katherine, perhaps you can shed some light on the insurer perspective about how priorities are changing within your companies?

Katherine Evans: We recently changed our back-end (policy admin system) so it’s hard for us to put broker connectivity at the top of the list. The truth is that price and product are hugely important for companies to be competitive. We develop a product, we like it, we develop price, we like it, but in order to maintain the channel I think we’re going to have to look at how we can improve technology in order to encourage more new business.

Mark Wai: Since 2010, one of the two strategic priorities everyone across our organization knows is our commitment to the broker channel. We created a dedicated broker connectivity team with a dedicated budget. Also, historically we invested in different broker connectivity projects and one of the success measurements is to look at the take-up rate by brokers. The numbers we have seen are disappointing, so we question ourselves. We rolled out these great products and worked with our vendors and integrators, but why is the take-up rate so low? So we do a lot of analysis and invest millions of dollars, but how can we ensure this product justifies the cost, and the broker reaps the benefits they’re seeking? Everyone has to work together, insurer, broker, vendor, to review the solution and continue improve on it.

Jeff Roy: ORBiT is working on defining and developing a number of the best practices workflows. We are bringing companies, vendors, CSIO and brokers together to discuss how it should work. By doing this, companies can focus and develop the workflows brokers need. Brokers are now taking responsibility for their workflows and are part of the development. In the past we relied on companies and vendors to give us the best solution blindly without getting involved, and we saw what that has done for the industry. The best way to predict the future is to create it. The industry needs to work together to improve the interface between our BMS system and our companies system.

Daryl Angier: Put yourself in the shoes of a typical regional brokerage that is dealing largely in personal lines. What are the best options for brokers who want to minimize their technology workflows and provide the fastest response for their clients?

Doug Johnston: I would map out structured workflows for everything you’re going to do, and manage your employees to follow those workflows. Consistent and documented workflows not only provide a roadmap to your employees on how you want to sell and service your customers, they also help you dramatically reduce your operational expenses. If one or more of your carriers is not fitting into the workflows you’ve designed, work with the carrier to achieve the workflows that meet your needs. If the carrier won’t change, change the market.

Jamie Rodgers: A great option is to get involved in industry initiatives or committees such as ORBiT and work collaboratively to achieve a shared vision. Secondly, be involved in lobbying broker management system vendors and insurance companies to help achieve that future state, and lobby as effectively as brokers have lobbied the government on other issues in the past.

Glen Piller: Brokers that are on the advanced path know they have to move from a telephone centre that works 9 to 5 to contact centres that work 24/7. They need to have efficient workflows, and automate high manual processes through integrated BMS/front office systems like portals and back office systems like policy admin and rating systems, allowing them to focus on keeping that personal touch alive.

Pat Durepos: Too many brokers today are not paperless in personal lines and commercial lines, and this goes a long way to creating good workflows. Call recording is another technology that’s supportable for brokers today. It provides audio signatures, a good form of quality assurance and training.

Gordon Alexander: The challenges faced today by the broker channel are not technical in nature. We’ve all highlighted during today’s roundtable that we can make technology pretty much do anything. It’s about getting all the participants in the channel around the table to understand and agree what we’re going to work on and what is important in order to harness technology and focus everyone on the same goals.

Daryl Angier: Insurers, do you have advice on how brokers can compete better on the technology front? I’m sure the comments about switching carriers send shivers down your spine.

Katherine Evans: Well, no it doesn’t. I think in actual fact carriers treat technology as competitive advantage or disadvantage. That’s why carriers spend money—in order to gain that advantage. Brokers have to ask themselves, “In addition to everything else that a carrier may offer, which is product, price and good relationships, do they also fit my workflows? Do they make my life easier or harder? Do I have an opportunity to work better with this particular insurer versus somebody else?”

Mark Wai: Brokers have to look at how four key components relate to what their insurer partners are going to roll out in the next few years: new policy system, workflow, industry standards, and the BMS. If we don’t have a line of sight where the industry trend is going, we’ll always play the catch up game.

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Copyright 2012 Rogers Publishing Ltd. This article first appeared in the February 2012 edition of Canadian Insurance Top Broker magazine.

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Transcontinental Media G.P.