July 18, 2018 by Brooke Smith
There’s no doubt Canadians want on-demand information through digital channels.
According to Accenture’s 2017 Global Distribution & Marketing Consumer Study: Insurance Report, in 2016, 68% of consumers preferred to search for insurance information digitally. That’s up from 54% in 2013.
Clearly, the digital game is well underway. But are brokers ready to play?
Much has been made of the potential for chatbots to modernize the way brokers do business.
“There are various free platforms available online,” says John McLelland, founder of Toronto-based brokerage miBroker. “We’re testing what kind of information people are willing to give to a chatbot. How far in that process are they willing to go before they get frustrated?”
Right now, he notes, many brokers have an online-quoting process, and more traditional brokerages have a simple web form that customers fill in to get quotes.
“Those aren’t necessarily great user experiences today,” he says. “I think the chatbot has the ability to make that an even more natural, conversational type of process. As the AI grows, [the chatbot] will be able to answer questions and give [consumers] feedback or connect them with a broker if they need help to understand their coverage.”
E-signatures are another way brokers can create a more user-friendly experience for customers. But surprisingly, not all brokers are providing the digital John Hancock option to their clients.
Just under half (48%) of Canadian brokerages offer e-signatures, according to Applied Systems’ Annual Applied Digital Brokerage Report.
Catherine Smola, president and CEO of the Centre for Study of Insurance Operations (CSIO), noted that the organization’s survey on e-signatures saw less than 1% adoption several years ago.
“The latest results I remember seeing, it was up to 14% in some provinces,” Smola says.
“Change management is just so critically important. It’s more important, in some cases, than the platform change.”
For McLelland, the last statistic he saw was for 7% in Ontario.
“I found that to be incredibly low,” he says, noting that without digital signatures, consumers have to print and scan a document or take a photo of the signature. “That’s great, but not best from a regulation standpoint, where you’ve just got a picture of a signature and not the whole document.”
E-signatures not only save brokers time—they also save them money.
According to a CSIO report, spending just three hours a week on getting a wet signature (i.e., preparing documents, sending reminders, filing) could cost a broker $3,000 annually, compared to $300 with e-signatures.
E-signatures can also help raise the profile of smaller brokerages by showcasing the fact that they’re keeping current with technological trends.
“It’s one of those really slick digital interactions, and it doesn’t matter the size of the broker,” says Smola. “A small [brokerage] of 10 people in a rural town sending a document to sign electronically would have the same appearance as being a 100-person Toronto-based brokerage.”
The seamless integration of broker and insurer technology remains among the biggest challenges the industry will face in the immediate future.
“You have legacy systems on the insurance company side and legacy systems on the broker side and they can’t really talk to each other easily yet,” says Tanya Eyram, vice-president of business solutions with RSA. “If you’re a broker that’s been in the industry for 25 years or longer, you’ve got to adapt and pivot and replace your systems. Then you can leverage some of the funky tools once you get your legacy systems up to speed and integrating.”
Smola agrees, adding that sometimes it’s simply about who’s willing to invest in a new system.
“A lot of the carriers currently are on legacy systems—they don’t want to invest and move to new platforms,” she says. “That can cause friction between brokers and carriers. I hear all the time about brokers having to go into carrier portal systems to rate commercial business. That’s time-consuming and it’s an irritant for brokers.”
Of course, technology is expensive, especially if it’s brand-new or something that’s not produced in-house.
“Any time you’re dealing with, say, software developers, it’s almost like building a house, where you have the contractor,” says McLelland. “You get the timeline, and then you get the real timeline. It’s double that or more. It can be difficult to coordinate all those timelines.”
That’s why managing the transition to new technology is key to a broker’s success.
“Change management is just so critically important,” says Jeff Purdy, senior vice-president of international operations with Applied Systems. “It’s more important, in some cases, than the platform change. If you manage change well, then you will reap the benefits of the change.”
Another challenge is to convince brokers to get the basics first and keep the bells and whistles for later. Smola says she’s seeing many brokers play and experiment in the chatbot space.
“I think that’s terrific, but one shouldn’t underestimate the work and time it takes to develop something like this,” she says.
For instance, she knows of brokers who talk publicly about developing chatbots. However, when customers go to use them on the broker’s portal, they receive a message saying it’s in a “beta test phase.”
“Personally, I’m concerned that customers may not have a great experience,” Smola says. “Maybe the messaging has to be a bit stronger, that this is a start-up tool versus announcing they actually have a chatbot to service customers.”
“You have legacy systems on the insurance company side and legacy systems on the broker side and they can’t really talk to each other easily yet.”
Joseph D’Souza, founder and CEO of ProNavigator, agrees.
“With any emerging technologies, typically the first applications are built in silos and not integrated with your existing systems,” he says, noting that this often leads to a suboptimal user experience.
Still, he’s optimistic about the strides brokers are making.
“In 2018, I hope, we should see much better integration with databases and analytics,” he says. “The next generation of conversational agents will be much better at handling a conversation instead of simple answers to questions.”
Copyright © 2018 Transcontinental Media G.P. This article first appeared in the April edition of Canadian Insurance Top Broker magazine
This story was originally published by Canadian Insurance Top Broker.