Brokers should not hold their breath waiting for a common, industry-wide technology solution to help resolve the ongoing conundrum of broker-carrier connectivity, a panel of insurance company CEOs suggested at the 91st Annual Convention of the Insurance Brokers Association of Ontario (IBAO) in Toronto on Oct. 20.
Brokers have long called for some form of standardized, industry-wide, single-entry, multiple-company interface (SEMCI) tech solution that would allow brokers to connect to all of their insurance company markets through a single interface and within their broker management systems (BMS).
For the past several years, brokers have been critical of insurers for adopting individual "portal" technology solutions that allow brokers to connect with individual carriers in real-time, but complicate the broker's workflow since brokers have to deal with various different company technologies and passwords.
Asked whether a common, industry-wide tool would be preferable to individual portal solutions, insurance company CEOs expressed skepticism about the realization of such a project.
George Cooke, president and CEO of The Dominion, said insurers and brokers all want a tool that makes carriers' interactions with the broker channel more efficient. But he expressed reservation about undertaking such a project because of the failure of previous industry-wide tech development projects such as SYNCRON and the CSIO Portal, the latter of which cost millions of dollars in development.
"Any time you try to work on these industry-wide initiatives, they fail miserably," Cooke observed.
Alister Campbell, president and CEO of Zurich Canada, likened the search for a common, industry-wide tech solution to the ongoing quest by physicists for a theory that would unite Einstein's general theory of relativity with the seemingly mutually exclusive principles of quantum mechanics.
"The constant aspiration to get to a simple system is like physicists trying to get their ‘unified field' theory working out," Campbell said. "It's likely to happen some day, but it's not likely to happen in our lifetime."
In the meantime, Campbell said, the industry has taken a step forward with the Centre for the Study of Insurance Operation (CSIO)'s creation of XML standards. The project facilitates a standard data exchange between brokers and carriers through the broker BMS.
Maurice Tulloch, president and CEO of Aviva Canada, agreed chasing a single tool is somewhat like chasing after a "utopia." In the meantime, he said, the industry has taken some "good interim steps."
For example, Tulloch cited the ongoing progress of the data exchange project launched by the Insurance Brokers Association of Canada (IBAC). IBAC is currently working with insurers and vendors to create a basic framework for data exchanges between brokers and insurance companies through the broker BMS.
Like many other panelists, Jean-Francois Blais, president of Intact Insurance, said the fact that different brokers and insurers have different technological systems and needs necessarily slows down the development of a common solution.
"Obviously, when we build internally, it goes faster," he said. "When we try to build a common solution, and bridging it with all of the members out there, we need their support and we need to synchronize all of it and it's more time-consuming."
One CEO observed that when the CSIO Portal project stopped in December 2005, the failure actually expedited the development and creation of portal solutions between brokers and individual carriers.
Karen Gavan, president and CEO of The Economical Insurance Group, cautioned that if the success of an industry-wide tech solution meant companies must all follow the same underwriting rules, the differentiation between property and casualty companies would disappear.
"The key differentiation between our products [in the P&C industry] is the product design, the underwriting rules," she said. "And based on that level of complexity, you are trying to say [by employing a common tool], ‘Make everyone the same.'
"But we might as well all give our business to the direct writers now if we don't want to differentiate on that basis."