TABLE OF CONTENTS Feb 2013 - 0 comments

Commercially Viable

Where will technology take commercial insurance over the next 10 years? The pervasiveness of apps has clearly changed expectations of software, but what will be the effect on the broker distribution channel?

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By: Steve Pieroway, Vice President Marketing & Client Service, Policy Works Inc.
2013-02-01

Since 2009, the number of apps available on Apple's App store has grown by more than 2,000%. That is not a typo - 2,000%. As of this January, there were approximately 775,000 apps available to download.

Granted, many of these apps are for use in the consumer context. And many are games. But the pervasiveness of apps in our daily lives has forever changed our expectations and view of software. The question is: How will this change impact software's role in the independent broker distribution channel? What might the industry look like in 10 years from a technology standpoint?

Take a look at the technology that exists today and how it supports the established workflow. Most brokers use a broker management system (BMS) to manage their book of business. The modus operandi of software vendors in the old world order was to create all-in-one systems: policy management, abeyance, claims, accounting and customer relationship management functionality.

These systems entail the common "hunter-gatherer" broker workflow. Producers find the business out in the field; information is gathered, typically on paper documents; and that information is brought back to the account executives in the office who enter the information in the BMS and kick-start the processing workflow. Not only was the information entered into one system, it was only accessible inside the office's network.

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But things are changing. Anyone who follows the Canadian Insurance Broker Strategy Group on LinkedIn will see discussions around using desktop applications in the field, on mobile devices. It is possible to use desktop solutions on a tablet through an RDP connection. But the experience is so underwhelming and frustrating, a person is unlikely to ever want to do it again.

The desire to process this business in the field is an interesting development. It may even represent a watershed moment for the insurance industry - one where cloud computing, apps and mashups will shape the technology ecosystem.

Cloud computing is the delivery of computing resources over a network, such as the Internet. Cloud-hosted software, for example, is accessible from any place an Internet browser can be accessed. Salesforce.com is a good example. The advent of cloud computing, and cloud-related services, untethers the broker from his or her desktop. Data about customers and prospects can now be easily accessed at the point of sale.

The philosophical approach to how functionality is delivered through software has changed because of the introduction of apps. Apps, or applications, are those bite-sized pieces of software that a person can download and run on his or her smartphone or tablet.

These pieces of software are characterized as "bite-sized" because they are very narrow and specific in their functionality. Typically, apps do one or two things, but do them very well.

In the new world order, if someone wants to do five different things, that person looks for the five best apps. The apps are then strung together to match specific workflow needs.

Think of this as the software version of the assembly line. What is more efficient and effective: one person making an entire car, or 100 workers specializing on focused tasks, working together? It's pretty clear what Mr. Ford would say.

When apps are strung together, a mashup effect begins to form. Wikipedia reports that a mashup is a web-based application, "that uses and combines data, presentation or functionality from two or more sources to create new services. The term implies easy, fast integration, frequently using open application programming interfaces (APIs) and data sources to produce enriched results."

A simple, yet powerful, example of a mashup is Google Maps. At Policy Works, Google Maps was integrated into the company's iPad app. Users can search for an address of a prospect, and then import that address directly into the app. While Google did not develop its map service specifically for any one company, companies can nonetheless use its service to populate their apps with an address. Simple, yet effective and valuable.

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The exciting part of mashups is the potential to use currently disparate information in a meaningful manner (think "big data"). Information stored in BMS systems; information stored in insurer back-end systems; third-party data collectors; Google Maps; websites - the information is out there. The real value is putting it all together in a manner that is meaningful to the end-user. This is the goal of analytics.

The conversation around analytics has been growing, but is mostly focused on insurers. Brokers should consider the value they could bring to customers and prospects if they could slice and dice the data, in all of their current systems, any way they wanted to. Trends would emerge. Hidden opportunities would be revealed.

What is the result of the collision of cloud computing, mobile technology and mashup of data? A decentralized, untethered workflow, especially in commercial lines. Much of what has been traditionally done in the office will be pushed out to the field.

This decentralized workflow will become the commercial producer's greatest advantage: cultivating the customer relationship to be a much richer experience; reviewing policy details, and making changes; and sending the new risk to be endorsed, remarketed or renewed. This can all be done on site. Receiving back quotations - again, all on site.

For prospecting, the intelligence to be gleaned from mashups, and the agility of cloud computing, will mean the potential for far more effective lead generation. Perhaps the greatest benefit will be the insight into how qualified a lead is, so that time can be spent on only the best leads.

Will the desktop disappear? Absolutely not. The need for desktop solutions to do the "heavy lifting" will always be around. The change seen in desktop applications will be in the scope of what this software is expected to do.

Desktop versus mobile/cloud is not an either-or scenario. It is one of complementary technologies and workflows.

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Steve Pieroway, Vice President Marketing & Client Service, Policy Works Inc.
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