March 9, 2012 by Suzanne Sharma
Direct writers continue to take broker market share, and there is a 40/60% split between the directs and the broker distribution channel respectively, it was revealed by SGI Canada at the Insurance-Canada.ca Technology Conference March 5.
While brokers still hold the majority share, they cannot afford to ignore the use of technology in their business any longer, it was stated.
“Direct writers seem to have taken advantage of technology, not only the Internet but also call center technology,” said Andrew Cartmell, president of SGI Canada. “They seem to have gotten a head start with predictive modeling. They recognized the importance of a customer from an insurance company perspective sooner than most broker distribution companies. And as a result they’ve been much better at targeting the markets they want to go after.”
The challenge for brokers remains finding ways to compete with direct writers. However, Rick Orr, president of the Insurance Brokers Association of Ontario (IBAO), stated there are already several tools available for brokers to use.
1) Transport Layer Security (TLS)
“We need to work together, both brokers and carriers,” said Orr. “Neither one of us can deliver solutions without the other buying in.”
TLS allows the transmission of secure email between brokers and carriers. All it requires is installing a security certificate on your email server and enabling TLS.
“Suddenly you can deliver secure email to any other TLS-enabled email server,” he said. “It might not sound like a big deal, but if we can secure our email and secure the transmission with CSIO [Centre for Studies in Insurance Operations], we’re truly building a platform for the future to give us some technology advantages.”
The paper savings of shutting down broker copy is $30,000…per month, according to Orr. E-Docs is both inexpensive and a valuable fix. Further, on March 1, CSIO released the much-anticipated XML standard, a huge opportunity for all companies to now deliver E-Docs.
“This is an amazing opportunity for the industry to step up and create a win for both sides,” he said. “We need to demonstrate that we can actually implement an industry-wide solution. If it’s that easy and inexpensive to do and we can’t pull this off, we haven’t got a chance in pulling off any complicated solutions.”
3) Mobile Apps
While many insurers now offer mobile apps, this is one tool that Orr felt still needed some tweaking.
“A number of companies are delivering mobile apps for consumers, but as a broker, I want one and only one application to promote and I want it to be mine,” he said. “Once you’re in my application you can access any of my companies, like coming into my office. It’s one-stop shopping.”
Orr revealed that IBAO would be releasing a mobile app that fits this criteria in the next 60 days.
To view photos from the 2012 Insurance-Canada.ca Technology Conference, click here.
This story was originally published by Canadian Insurance Top Broker.