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How brokerages can avoid the ‘single point of failure’ while workforce is at home


April 30, 2020   by Adam Malik


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Brokerages need to make sure they’re investing in technology that benefits the brokerage as a whole rather than promoting a silo-type of environment, Steve Whitelaw, vice president of industry and partner relations at Applied Systems, cautioned in a webinar recently.

Otherwise, cracks in business continuity may be exposed in a pandemic situation like now, when brokers are working remotely from home in isolation from their colleagues.

Specifically, Whitelaw highlighted the risks around ‘single points of failure’ during Canadian Underwriter’s webinar Business Continuity In The Digital Age on Apr. 22. What that means, he explained, is when one part of a system fails, the entire system falls with it.

Take, for example, a broker who texts with clients using their own personal cellphone. “And then that person can’t come to work for whatever reason, for whatever length of time,” Whitelaw said. “The business has lost that interaction, and is then at a loss to figure out how [to keep that relationship] going.”

Instead, if that text is integrated into a brokerage-wide solution such as a broker management system, then the communication is part of the records kept for the client. “It doesn’t matter if that person [who texted the client] can come to work, or if they’re in isolation for the next 14 or 28 days. That is part of the record that the broker can maintain,” Whitelaw said. “So from a business continuity perspective, it’s ideal to have all that information inside an environment that the rest of the organization can use and leverage, versus one-off solutions that risk that single point of failure.”

Whitelaw made his point during a follow-up to a discussion about going digital and how the COVID-19 pandemic has forced brokers to make quick changes to the way they do business, such as being more digital and less paper-focused.

In any process that involves such changes, there are two things to keep in mind, he said.

  • Ease of interaction from the consumer perspective.
  • Maintaining a high level of customer service and operations within the brokerage as a whole.

“Those have to be kept in mind,” Whitelaw said. “If one wins out over the other, then you end up with a less-than-ideal solution, despite all the sense of urgency or whatever else may come through.”

Webinar panellist Graham Haigh, vice president of broker distribution at Wawanesa Mutual Insurance Company, hopes that one of the biggest changes that happens out of the pandemic is a shift away from paper, repeating a company mantra that “Paper is stupid.” Between cheques and renewals, a lot of paper still gets moved around, as he observed. He feels digitizing efforts would create opportunities to allow easy access to records.

“There’s no point in us exchanging paper cheques,” Haigh said. “I don’t write cheques personally, but we make our brokers send us cheques continuously for their premium payments. So we have to move away from that.”

He suggested options such as software that allows payment processing or electronic funds transfers.

However, a full switch to a paperless brokerage isn’t realistic because some customers still want to deal with it, noted Joseph Carnevale, president of the Insurance Brokers Association of Ontario (IBAO), and managing director of sales and partner at Brokers Trust Insurance Group Inc.

“Paper may be stupid, but clients are always right,” Carnevale replied to Haigh, though noting his brokerage is mostly paperless. Still, it’s about being able to offer what the client wants.

“We believe strongly in going as much digital as possible, but we always leave open that some clients are going to ask for a paper copy of something, and we need a process that satisfies that,” Carnevale said. “We’re not in favour of any process that rules that out. We just want to make sure we have the availability of everything else.”