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Tech Talk Conference Coverage

The 2010 P&C Insurance Technology Conference challenges all stakeholders to adapt their view of technology from competitive edge to necessity.

The California insurance broker had a clear message for potential clients: “We’re not a faceless 800 number or a call centre located on the other side of the world.” Shaking a toy rubber lizard–representing U.S. direct insurer GEICO–the broker promised: “We offer better service than the lizard.”

This appeal, shared with attendees at the 2010 P&C Insurance Technology Conference, is familiar to brokers, but the medium–a YouTube video–probably isn’t. And that, according to conference speakers and panellists, is a big problem for brokers and insurers trying to adapt their businesses for a new breed of consumer.

The conference, which took place in Toronto February 22, had a message of its own: as the industry grapples with longtime problems like SEMCI and real-time data, social technology has allowed insurance consumers to control how they learn about and buy insurance.

Today’s consumer wants community-based and interactive services, which the industry isn’t offering. “They [also] have a different view of risk,” said keynote speaker Kimberly Harris-Ferrante, vice president and analyst at Gartner Insurance Industry Advisory Services. “Insurers must become a product factory for next generation demands.”

To do so, they should invest in the future, instead of using most of their IT budget “just to keep the lights on.” Rather than focusing on legacy systems, carriers and brokers need to look to modern claims and policy management systems, web services, business intelligence and analytics, predictive modelling, advanced fraud detection, Web 2.0 and social networking tools, along with product development solutions, portals and Internet technology and mobile devices. “These are sustainable tools that will change business models,” she said.

Give Them What They Want
Focusing on customer needs also yields rewards for brokers. Denny Edwards, president of the Edwards Insurance Group, had one question: “How do we get to someone we don’t know?” The answer was to launch Carinsurance.ca, he told the attendees during his session on the value of websites. The site, he said, “was a sales tool.”

The key to making a website pay off is to “address what the customer wants,” he said. After figuring out that most potential customers would go to the Internet looking for car insurance quotes, his group offered just that. But they also had to think ahead on handling the leads the site generated. “The average consumer has selective memory,” he pointed out, noting that when filling out their driving history, they tend to leave out tickets or accidents. “A lot of people who get a quote, then contact you, were not accurate.”

“Brokers need data, not just PDFs.” Cal Durland, program manager, ACORD.

Creating an online presence opens the door to more customers and prospects, but it can also make any complaints about your business more public–and that’s an even bigger reason to be online, says Edwards.

“You can be bad-mouthed even if you aren’t online,” he noted. “It’s up to customers to decide how they want to communicate and it’s our job to be ready.”

New Tools, Better Efficiency, 21 Days
How can the industry make the shift to better efficiency and “real time” workflow? The same way they make other changes in their lives, according to Doug Johnston, vice president at Applied Systems Inc. Drawing from research that shows it takes 21 days for people to adopt new habits or stop bad ones, he urged insurers and brokers to cast aside common excuses–too busy, fear of failure, fear of change–to improve their businesses.

First, brokers should figure out what they want to accomplish, keeping in mind that their goal should help three people–the customer, the shareholder and employees–as they seek to grow their business, retain business and lower operating expenses, he said.

One way to help brokerages move forward with their own BMS goals is to “hire people with an interest in technology,” advised Karen Gale, the IT manager at Allen Insurance Group. “Their life will be tech day in and day out,” she said. “Without experience it’s a training nightmare.”

Real Time, Now!
Brokers in different jurisdictions are making strides in their efforts to untangle varied standards in their quest for real-time data. ACORD (Association for Cooperative Operations Research and Development), a U.S. and U.K.-based organization, is working towards global data standards and standard forms for the insurance industry and its partners. “Paper is going away,” noted Cal Durland, program manager and Augie facilitator at ACORD. Those standards are crucial for brokers, she said, since “brokers have the life cycle of a policy–they want efficiency.”

A group of agents, brokers, carriers and vendors in the U.S. are behind Get Real Time Now, a campaign advocating real-time and download interface applications. The group wants to get carriers using real-time applications, expand real time to more applications and lines, and promote the campaign to all agents and brokers. “Brokers need data, not just PDFs,” Durland said. “They need proposals, reports, remarketing, and maintenance [that] is easier with standards.”

“I’m seeing more brokers engaged in tech. Without that, there’s no success.” Steve Kaukinen, president, CSIO.

Similar objectives are driving efforts at CSIO, Steve Kaukinen, the centre’s president, told the attendees during an afternoon session. Some of their latest proposals include a new standard that would let brokers maintain workflow in broker management systems (BMS), he said. The centre has already made progress on a new CSIOnet utility that allows attachments to EDI, and is in the midst of developing a work group for attachment standards. “I’m seeing more brokers engaged in tech,” he noted. “Without that, there’s no success.”

A key challenge: brokers and carriers use systems differently. “Companies recognize that we need to kill the gap [one created by supplementary screens and portals],” said Axa’s Jackie Selby, manager of personal lines development. A long-term solution would get data in BMS in a transferable way, she said. To get there, the industry has to identify what’s missing, enlist partnership with the CSIO and be more flexible in its approach.

A Changing View
Industry players must also align their goals, noted members of the conference’s afternoon broker/insurer panel. “We’re all working at cross-purposes sometimes,” said Rick Orr, vice president of the Insurance Brokers Association of Ontario (IBAO). The ongoing connectivity issues point to one solution for brokers and consumers–real time. A lot of effort goes into giving consumers information, said Colin Smith, senior vice president and CIO of The Economical Insurance Group. “What we need to do is push that further so you’re enabled to give consumers the option to dive into that info themselves in real time.”

This technological push from carrier to broker to consumer also points to the need for a different mindset, the speakers agreed. “Tech isn’t a competitive edge,” Orr pointed out. “It’s what we need to provide our product.”